Seeking to purchase smaller medical TPA 

Under Appendix A.05(8) of EPCRS, if we correct timely within the 9-1/2 months, it says we are not required to make QNECs.  Are we nonetheless required to calculate earnings on what would have been the QNECs but for the relief in .05(8)?  I seem to read EPCRS as saying you have to make up lost matches, and adjust that earnings, but I don't see that you have to make any corrective contribution for the missed deferral opportunity: not the principal and not any earnings.  Is that correct? 

Our plan document allows us to set the threshold for automatic rollovers below $1,000. We are considering lowering the amount to reduce the number of cash-outs, which sometimes become unclaimed checks. 

Anyone else using a lower number? Results?

Is there any number considered too low?

I need help thinking this through:

Safe harbor 401(k) plan:  3% non-elective contribution to all eligible participants.

One of the 5% owners will be selling her interest in the company.  She’s over 70 and will still be working and receiving commissions paid as W2 comp.

Once her ownership is sold, the plan sponsor/remaining owners do not want to give her any more contributions.

One way to do this is to change from NEC to s/h match (prospectively) and hope she doesn’t defer.  (This is going to “hurt” the NHCEs.  Very few of them are deferring.  They will perceive that a benefit is being taken away from them.)

If we determine that the former owner will continue to be an HCE based on compensation, here is what I’m thinking:

Amend the document to exclude HCEs from receiving the SHNEC.  Change PS formula to new comparability – each in own class.

Give all of the HCEs (except for the one former owner) a 3% profit sharing.  Plan passes ratio % portion of the general test based on allocation rates.  (It fails miserably under benefits basis….most of the non HCEs are older than the HCEs). Theoretically everyone except the former owner is receiving the same contribution as before.

However, if the former owner fails to be an HCE in the future, this theory won’t work since all NHCEs must receive the SH contribution.

Does this sound correct and reasonable?

ok, modified my indexed limit spreadsheet to now include a calculation of soc sec.

all you have to do is enter your DOB and the most recent comp entered. then enter your comp history.

after that, the spreadsheet needs to be updated each year with the most recent avg wage (govt releases every year late oct) , the latest taxable wage base, and you latest comp.

I've tried some different scenarios and have been able to

produce the same results found at https://www.ssa.gov/planners/retire/AnypiaApplet.html

well, ok, since I am not rounding, my results might be a $1 more or so. and once you have your historical comps entered you never have to do that again. they used to send you an annual statement listing all your comp, now you have to go out to the website to get this every year.

found this quite interesting how it is actually calculated. and it is not: have soc sec taken out and then never see again. at least not yet. ok, if you are really young I might not have extended my fields far enough.

indexed limits and soc sec.xlsx

The IRS instructions for calculating an Required Minimum Distribution from an IRA state that you use the age that the participant will turn on his birthday in the current year. I assume that this applies to any DC plan RMD. I've been told that one could use attained age as of the last day of the prior plan year (as long your consistent year to year). Is there any basis for this?

Thanks for any responses!

Is anyone relying on Technical Release 2011-03R to deliver annual fee disclosures or any other disclosures?  I don't see any advantage to using that release over the safe harbor in the regulations that covers consent to electronic delivery.  Are there any?

back to basics and apologies for the simplicity of the question!

If a plan has six months of service, can they also have an hours requirement (i.e. 500 hours in six months)?

I thought I remembered from WAY back that if you had less than 1 YOS for eligibility that you could not have an hours of service requirement.

However VS Plan Doc "seems" to allow it under the eligibility section but I had a client years back that had six consecutive month for eligibility and under IRS audit had employees that were required to participate that we thought could be excluded.  the service spanning rules were cited, which I think might tie in to all this, but am really spinning wheels now.

thanks in advance.

Hello, Has anyone seen any release information on the 2017 Form 5500. Ideally the release would be from the DOL and/or the IRS. As far as I can surmise, there are to be small changes. I found one article from ASPPA, a creditable source; however the article was written in April, 2017. I hoped to have information that is more recent. Link to article: https://www.asppa.org/News/Article/ArticleID/8532

Many thanks for your help and input!

I would be truly grateful if someone could confirm that the following are affiliated service groups.

Hospital Company has agreed to hire as employees, all the members of Doctors Company who will primarily/exclusively perform services for Hospital Company and will be highly compensated by Hospital Company. There is no common ownership between Hospital Company and Doctors Company.

Hospital Company is a FSO and Doctors Company is a B-Org, despite the lack of common ownership, correct?

I really appreciate any help provided!

We have a 401(k) with matching.  Participants must work for 18 months before being eligible for matching, and vesting is immediate.

For testing purposes, we want to allow non-HCEs to be immediately eligible in their first 18 months with 3 year cliff vesting and we want to make this effective as of 1/1/17.  Can we do this?

Three dentists share office space and some of the employees.  Each sponsor a retirement plan, all of the same type, which were established about 10 years ago.

At that time we were advised by a retirement plan consulting firm that these are “shared employees” that would have to be included in the plan of the particular employer if they worked an aggregate of 1000 hours between the different employers; and would have to receive contribution from each plan based on W-2 received from each of different employers.They quoted an old RevRule from 1973 as the only guidance IRS has issued on the subject of “shared employees.”

About a year ago, one of the dentists left the group, moved his office to another location but within the same city.  He continues to employee maybe 1-2 employes of the original group, but only for 1-2 days per week, which is really irrelevant at this point.

Even if one employee is no longer a “shared employee” for the original group who share the office space as well as the employees, we believe that since one of the employees is a participant in this one dentist’s plan and regardless of the number of hours she works for this one particular dentist of whom I am speaking, she must continue as participant in this plan and can not be excluded if she works less than 1,000 hours or employed on the last day any plan year as the plan is definitely TH.

Any employee this dentist hires that works solely for him, there is no doubt, this employee is subject only to this one dentist’s plan eligibilty.

Concurrance?

provisions,etc.

Can I simply transfer the deceased spouse's account to the surviving spouse's account in the Plan? Would it be a rollover?  Should I separately account for it to ensure the 10% penalty applies.

Perhaps more importantly must the balance leave the Plan within 5 years due to RMD rules (participant was under 70.5 when she died).

403b covers HCEs and 401k covers NHCE's.  Do people agree that I cannot include the special 403b catch-up rule in the 403b plan because that would be a discriminatory benfit, right, feature?

I'm pretty sure it would be but thought I would check.

We have a solo-k plan with plan sponsor Y.  Sole-proprietor decided to end his business, Y, this year and establishes a new business Z in the same year.  Sole-proprietor would like to establish a plan for business Z.  Is this ok?  In my gut, I say 'yes',  as an owner of multiple companies can sponsor plans for each company if they want within the regulations.  It is the sole-proprietor that is throwing me.

Essentially have a father/son medical practice.  Father owns 100% and is taxed as a sole proprietor.  Son has been practicing at the business for years as an employee.  Multiple CPAs have advised them that the son should incorporate and work for the father as a contractor.  They have advised them that one of the benefits  is that the son  can set up his own 401(k).

Am Is missing something?  Even if they could assert that the son is no longer an employee I don't see how they get around the related group issues.

Thanks for any guidance.

Hello,

Found this site while googling for my scenario and seems people here know what they're talking about.

Had a Self-Employed Plan for my LLC (no employees) with Vanguard for past 4 years, over 50, making max contributions.

While talking to Fidelity after opening plan with Vanguard, they suggested I open another plan with them to take advantage of "brokerage' feature in their plan (Vanguard did not provide that). So I opened another plan with them - 002, Vanguard was 001.

Now, I'm told that with the 002 plan assets exceeding the limit I need to file 5500 next year. Do I need to file 5500 for both 001 and 002 or just 002 where assets have exceeded the limit?

In order to make my life simple, I'd like to close the 001-Vanguard plan, move everything to Fidelity since after an initial contribution to vanguard when I first opened the plan I've been making contributions only to Fidelity-002 plan.

Could someone please let me know what is the best way to do this and what paperwork other than 5500 (termination of plan) do I need since there are no employees, just myself?

Thanks for the assistance.

Hi,

A current payroll client had expressed interest in setting up a 401k plan. On the way out of the meeting, they casually mentioned to the salesperson that they currently have a 403(b) plan. They are a church organization. They said that they had no plan document, etc. I have never worked on a 403(b) plan so don;t know too much about them. I do know after checking on the payroll system that there is an ER contribution.

Can they have a 401k plan as well? What happens with the 403(b) plan? 

I am totally in need of guidance!

Employer A merges with employer B. Employer B gives stock in B to A in exchange for all of the stock in A.  (i would say this is treated like a stock sale).  Employer A never terminated its plan. A wants to terminate its plan so the owner can do a rollover. Typically since B now owns the stock in A it would decide what to do with A’s Plan. However, our plan has a provision which says that if the employer is acquired and the new employer doesn’t continue to the plan then the plan terminates automatically.  B would eventually want to start a new plan (maybe next year) but they haven’t done so yet leaving A’s plan alone for the moment. 

Can the owners of A rely on that provision in their plan to pay their plan out rather than be forced to merge it with B’s future Plan or relinquish control of its plan to B? 

QSLOB company -  do we count hours for satisfying the 1,000 hour requirement for discretionary non-elective after he transferred to main company during the plan year?