I don't believe there is any advance notice requirement, even if ERISA applies, correct? Yes, any eligible expense incurred prior to the amendment date would need to be covered, but still no legal/regulatory requirement for advance notice, similar to a 204(h) notice in the qualified plan world?

Thanks.

Hello out there,

Our TPA firm is considering switching from Datair's PE WIN admin software to FT William's admin software.  We do not use document software from either Datair or FT Williams and will not be our doc system.

Has anyone made this switch that could offer opinions on whether or not they are happy with the switch, ease of use between the two platforms, support, preferences, etc.

We are not familiar with FT Williams so do not know if we would be trading for something more difficult to learn and use than Datair.  

Thank you in advance for any input offered.

We have a calendar year PS with Y/E requirement for contribution.  Owner is selling his (veterinary) practice to another larger company - probably by mid-October; he intends to keep his corporation active and he and his wife will remain on payroll.  All other employees will be moving to new company and probably rolling their money into the new company's 401(k) plan.   He wants to make a 2017 contribution and has already deposited most of that money.  What we want to do is a mid-year valuation in which we allocate Profit Sharing and earnings.  This would probably be 09/30/17 or whatever they select as official termination date for participants.

I need to determine what documentation we need in order to accomplish this.  We need to address partial termination as well as mid-year valuation ignoring year-end employment requirement.

Announcement 2017-13 states provides certain loan and distribution relief for "employees or former employees whose principal residence on September 4, 2017 was located in one of the Florida counties identified for individual assistance" by FEMA caused by Hurricane Irma.

However, FEMA announced on September 15, 2017 that 3 counties in Georgia (Camden, Chatham and Glynn) are now areas designated by FEMA for individual assistance. 

Should we assume that employees in these 3  Georgia counties are now eligible for the Announcement 2017-13 relief even though the literal reading of Announcement 2017-13 states it the relief is for employees in "Florida" counties?  My gut is telling me the 3 Georgia counties are now permissible, and that the IRS just rushed to get Announcement 2017-13 out the door and incorrectly put in Florida counties. Other thoughts? It should be noted that the above sentence is the only sentence in Announcement 2017-13 that mentions "Florida" counties. 

I am working on a plan with the following situations:

A new 401(k) in place effective 5/1/16 with

1. 3 months eligibility for EE deferrals
2. 6 months eligibility for employer match
3. ER matching 100% up to 6% of compensation
4. 415 Limit Compensation definition that includes EE deferrals
5. true up contributions after year end

A hypothetical employee -

• Date of Hire = 1/1/2016
• Monthly compensation in 2016= $10,000
• 2016 annual compensation = $120,000
• Made10% deferral contributions only for 2 months (10/2016 & 11/2016)

At the end of 2016 plan year, the total deferrals = $10,000 x 2 x 10% = $2,000

Questions:

1. What is the compensation amount that should be used to calculate the deferral rate for purposes of ADP testing and true up contribution?  Is it $120,000 (annual gross comp.) or $80,000 (comp. since plan effective date 5/1/16) or $20,000 (comp. for the months in which the participant made deferral contributions)?
2. What is the compensation amount that should be used to run the true up calculation and ACP testing?  $120,000, $80,000, $60,000 or $20,000?
3. The plan has a class exclusion and fails the Ratio Percentage Test for 2016.  What is the compensation amount that should be used to run the next step - Average Benefits Test?

Thank you!

Assume that a 401(k) plan with matching and/or profit sharing subject to vesting has a cash-out and buyback provision and language in the plan document that says that forfeiture of nonvested portion of account occurs immediately following the participant's taking a lump sum distribution of vested portion. Assume plan document also says that forfeitures can be used to pay admin expenses and that any amount not used to pay admin expenses may be used to offset "any payments that the employer would otherwise be required to make to the plan." Could the employer not transfer to the plan amounts withheld from employees' pay as elective 401(k) contributions and loan repayments and credit to the accounts of the affected employees instead amounts pulled from current forfeitures? Assume that the crediting of the previously forfeited amounts would be at least as rapid as if the withheld amounts were transferred to the plan and credited to the affected employees' accounts and that the time period would pass the DOL's requirements.

We have an owner that is selling his shares to the ESOP, but the shares will be voted under a "voting trust" where the trustee votes based on the selling owner's interests (the selling owner is the beneficiary of the voting trust).  As the shares are paid off, the voting trust stops applying to the paid-off shares.

Is the selling owner still considered an owner for purposes of 409(p) testing.  The selling owner doesn't participate in the ESOP, but is relatives with someone who does and whether or not the selling owner is still considered an owner could have a big effect on the test.

Thank you!

So if an employee is part of a Long Term Incentive Plan, and they are now terminating after 20 years, they are eligible to receive their payments from the LTIP for the next 5 years, based on the plan.   The question is reporting it - my understanding is that the Current Present Value of the total amount being paid over 5 years is to be reported on the this years W2 as an employee but for FICA purposes only as it has not been paid yet.  I've heard this was done to benefit the EE as well as the company for FICA purposes, because the HCE has probably met the SS Maximum for the current year, so truly it's only reported for Medicare purposes.   I also know that the total amount being added to Medicare earnings for this year must be reported under Box 12 Code Y for this current year.

My question, over the next 5 years, the terminated EE will receive a payment from the LTIP, which is to be reported on a W2 for Federal Income Tax purposes only.  What entry is necessary to reflected on Box 12?

Client accidentally deposited payroll contributions twice for the same effective date. Instead of reversing second transaction, can employer leave the funds deposited alone, and change the effective date of the second deposit to match with the next pay date? The funds would have been deposited before they were withheld from participants' paychecks, but isn't the risk entirely on the employer? There is no harm to participants - in fact, they benefit. 

A small business with a 401k becomes unprofitable. It terminates all employees, the business and the 401k.

However, the business will receive payments for billed services for several months. This leads to a few questions:

1. Does the successor plan rule apply even though the business stopped operations and the employees received all contributions due them?
2. If the above answer is yes, can the owner adopt a 5305-SEP IRA (which is an exception) in the same plan year or must they adopt a prototype SEP IRA plan?
3. Or is there no way to make employer retirement plan contributions on this residual income?

We received notice that a FT employee was terminating after they had terminated. This resulted us in only receiving one-half of their premiums for their health, dental and vision payments. Amazingly, they wrote us a check for the half that we paid.

Just trying to think this through,

1. Would i add this to their yearly totals of deductions. It would show on their w-2. (I'm thinking yes)

2. Do i deduct it from their taxable gross? (Drawing a blank on this one)

3. If it's part of their taxable gross, do i owe them some Medicare deduction amount?

4. Anything else i'm not thinking of?

Thank you,

Good day,

I hope this is not a ridiculous question. Are deceased participants included in the 8955-SSA filing? The instructions are not clear to me. For example, if a participant dies while active, there is a benefit owed to the estate/beneficiary, but at this point is not owed to them, the SSN on the form. The same is true of those who termed in the past and were reported on an SSA, but died in the plan year. Their estate/beneficiary is paid out at this point, so should they be a D on the form with their SSN?

Two questions:

Are TPAs preparing Form 990-T for the retirement plans of their clients, or are they deferring to the client's CPA?  and

If a K-1 (1065) has an attachment for Part III, Item 20 (Other Information), letter 'V" (UBTI), does the figure on the attachment reflect the net UBTI or the gross UBTI?  

Thank you in advance for any assistance!

PS plan terminating with merged MPP assets subject to J&S.  If MPP portion is >5K and participant is missing or unresponsive, can we roll their funds to an IRA or must we purchase an annuity?  

if you have a controlled group.  plan a has no service requirements immediate eligibility deferral and safe harbor match.  Group b has 1 year of service and monthly entry.

The plans must be aggregated to pass coverage and we have to test on statutory exclusions

The plans are not top heavy single or aggregated

Is the plan really satisfying safe harbor?  it seems like there would be a problem if one group is immediately eligible to defer and receive shmc when the other group has to wait 1 year and dual entry

Are there any additional testing requirements that are needed when you have a controlled group and vastly different eligibility requirements?

I just got off phone with an IRS agent in the Enrolled Agent department and I want to check the information I received with other ERPAs.

This concerns the requirement that you earn 72 hrs in 3 yr cycle with a minimum of 16 hrs each year (including 2 hrs ethics).  She told me that actually there is no 16 hour requirement as long as you get all the credits you need in the 3 years.

My current cycle is 04/01/16-04/01/19.  So I plan on going to a conference in November that will actually give me over 72 hours credit meaning all I need for 2018-2019 is a few hrs of ethics.  This is okay.

Does anyone disagree with this?  Does anyone have experience to the contrary?

And speaking of Ethics, does anyone know a good source for Ethics hours?

I have a plan that uses prior year testing method for deferrals and match.  Client did not make a matching contribution in 2015.  So, is it correct to say that the match percentage applied to the HCEs for the 2016 year is 0%, so that any HCE who receives a match in 2016, must forfeit the entire match amount?

Hi all, 

Does anyone have recent (i.e., post-2013 M-1 regulations) experience with late filing penalties for the M-1? Assuming there's no fraud involved, and an employer unintentionally created a MEWA, does the DOL actually assess the $1,500/day penalty? There does not appear to be a DFVCP-like program to self-report and mitigate the penalties, and we are struggling to figure out how the DOL handles this in practice. We've tried the DOL number in the M-1 preamble multiple times, with no luck. 

Does anyone have any experience with this, or a contact within the DOL we could reach? Thanks much!

Can people share success rats for a VCP for an owner's loan (owns 50% of the business)? Suffice it to say, the participant did not make the majority of payments in the first year, so "way behind."

Hi,

My situation is a little complicated and really appreciate your help -

I have been contributing 13% pre tax and 50% after tax to my 401k for a while. Suddenly, my employer failed to withhold my 401k pre and after tax amount on 9/7 payday. Also I lost 6% pre tax employer match. I let my HR know 9/7 immediately; they admitted that it was their error but are still working on the solution.

The next payday is 9/21. The pay statement showed up in ADP account 9/19. They withheld 13% pre tax but did not withhold 50% after tax.

I am pretty sure that I haven't reached any IRS annual limit for 401k contribution this year.

I have questions as below -

Because of the high contribution %, especially after tax contribution, it will be hard for employer to withhold more in my future paycheck this year to correct the errors. What can they do?

Is there any IRS regulation about employer failing to withhold after tax 401k contribution?

Thank you.