Wording has changed a little bit in the Revenue Procedure 2016-51 from prior Rev. Proc. - it is a bit less explicit regarding the following.

So, let's say you have a SIMPLE-IRA to which you have contributed during 2017, then you established a 401(k) and contributed to that as well. Whoops. So, when it comes to correcting, can you file VCP and count the SIMPLE as an "Excess Contribution" and refund it? Can you still have the option under the VCP to retain it in the SIMPLE, but pay the 10% excise tax on the retained amounts (but apparently get no deduction for it, so probably not a savory option anyway?) Other wonderful options?

I tend to favor refunding, particularly when fairly early in the year where participant can have time to make it up anyway under the 401(k).

Appreciate any opinions/thoughts. P.S. - anyone recently submitted one one way or the other, and if so, with what results?

For someone with no experience getting into TPA service, what would you recommend as educational sources? Specifically on designing 401k plans and obtaining approved safe harbor agreements?.

Defined benefit plan has a provision that says that if a participant dies before retirement, his/her beneficiary can elect an alternate death benefit instead of a Qualified Pre-Retirement Survivor Annuity.  The alternate death benefit is a lump sum payment of 100% of the contributions made to the Plan on the participant's behalf.

If a beneficiary chooses the alternate death benefit, is the plan's administrator required to withhold any taxes on the payment?  If so, how much?

Thanks.

Client thought employee Y was not eligible to participate in plan because they considered her a part-time employee.  Entry is immediate for deferrals (and 1 YOS for match with semi-annual entry dates) but Plan does have a part-time employee exclusion, but that exclusion no longer applies once an employee works 1000 hours in the computation period.

Employee Y was hired on 2/11/11 as a part-time employee.  At the end of the 2011 plan year, we learned that she had worked 1000 hours.  What would you consider her entry date into the plan?

Since the plan has an automatic 2% contribution rate, should we be calculating the missed deferral opportunity at 2% or do we rely on the ADP test results and use the average rate of the NHECs?

Please advise.

Controlled groups give me a headache; anyone have an opinion on this (BTW, I think it is a controlled group)?

Individual A owns 100% of X LLC which has no employees. X owns 50% of Company B which has employees. The other 50% of Company B is owned by another individual.

Can Individual A make contributions to a 401k which is under X LLC without any obligation to employees of Company B?
 

An owner takes out a loan in Oct 2016 with monthly scheduled payments.  He doesn't make a payment by the time we notice in May 2017.  Is there anything that can be done to make it so the loan is not in default?

After all, if he had taken out the loan with quarterly scheduled payments, the first missed payment wouldn't have occurred until Jan, and the loan wouldn't have defaulted until June 30th. 

But there is a catch here.  It is the fiancée's house.  She lives with the fiancée but the mortgage is not in her name.

The distribution at the most broad level is to prevent the eviction.

"(4) Payments necessary to prevent the eviction of the employee from the employee's principal residence or foreclosure on the mortgage on that residence;"

Based on a literal interpretation of the regs it seems to me she would qualify.

We are instructing our new solo k clients that they should file a Form 5500-SF instead of the Form 5500-EZ.  Do the same rules apply for the asset level that requires a filing? In order words, is it correct that even a Form 5500-SF is not required for a solo k until the assets exceed $250,000?

I have a participant wanting a hardship withdrawal to purchase a primary residence.  I have been looking for what is not allowed in the closing cost.  For example can they be reimbursed for the down payment they already made or for the amount going into escrow for property tax and homeowners insurance which would be part of the monthly mortgage payments.  My thought is that these are not "immediate and heavy financial needs"  is there something in writing that I can send other than "immediate and heavy financial needs"

An employee that was eligible for the plan sends the employer a note stating that she wants to start having $20 deducted from her pay for the 401k plan. He never givers her an enrollment form to complete.He sets up the deduction on payroll. The first deduction went into the plan. After that, for some reason, the deductions got stopped on the payroll system.

Now she has terminated her employment and wants to take her money out. Her account balance shows $20. She thinks that she has at least $400 because she thinks the $20 had been coming out of her account each week. There's a $75 processing fee so she can't even get her $20 out.

What can/should be done?

My client has received a letter from her former employer requesting a payment of excess match contribution related to 2007 and 2008 plus interest thereon. The 401K had been rolled over in to her IRA about 4 years ago. Is she required to pay this amount given it was an error by her old employer made many years ago? If she has to make this payment, can it be taken out of her IRA tax free? Thank you for your help. 

My father in law passed away, leaving his IRA to the 4 children. Three of them have taken it and it is in their name. The remaing sibling did not take theirs, it was left in my father in laws name. My question is are the other siblings entitled to dividends that have been earned since the disbursement? thanks 

I ran across a new term today and am puzzled as to what it is. What is a "TEFRA CARD" and how does it apply to plans?

Thanks 

On of my client administers  a small plan and files From 5500-SF.

Therefore, a check mark was put for the last section of Part II - Section 6(b) of the Form 5500-SF that asks whether the plan calims small plan audit waiver.

On the SAR and AFN, there is a similar question about whether the plan claims a small plan audit waiver. 

One of my co-worker is telling me it is not required to list the names and amounts of the publicly traded mutual funds that the plan asset is invested in those regulated financial institution.

Don't I have to list the names of the regulated financial institution , for instance WellsFargo Government Securities, and the amount were the plan asset is invested on the SAR and AFN?

Hi -

I have a cash balance plan that has terminated, and most of the distribution has been completed (95% or so of the plan participants either took their balance or elected to start an annuity). There are, however, some participants remaining who have either not responded or who have actively elected to defer commencement. They are not missing participants.

The facts are as follows:

* the benefits are cash balance based, with some grandfathered annuity benefits payable if more valuable than the accumulated balance. Unfortunately, the prior actuary and their legal counsel amended the plan so that participants may elect to receive their benefits earned before a certain date in a different form than benefits earned after that date, so participants could potentially elect two different annuity forms, or elect to take part of the balance as a lump sum and part as an annuity, etc. - that is rare in practice, though. 

* the remaining balances are about $2 million for the group of non-responders and participants deferring. Grandfathered benefits make the actual total lump sum value slightly higher than that, but not much.

* the interest crediting rate is treasury-based with a floor (the floor applies and has for five years prior to termination, presumably it would apply indefinitely since the regulations don't state that the rate ever goes back to the index base - at least not that I've read)

* the annuity broker has not been able to find someone who is willing to quote for the remaining deferred participants

* Legal counsel has determined that every aspect of the plan is protected and must be provided for in the annuity contract

My questions are this:

1) Has anyone had any luck transferring benefits similar to the above (or any cash balance benefits where all plan options stay intact) to an insurer. If so, can you let me know who the insurer was so that we can direct the broker to them?

2) Can anyone confirm that the 5-year average interest rate applies in perpetuity now? This seems like a given, but just checking.

3) I have heard others claim that legal counsel has allowed them to water down plan options for participants who refuse to respond when it makes the benefits unattractive to an insurer. The client probably doesn't want to do anything like that given the opinion they've already received, but I'm curious if anyone has experienced that in practice.

So I work for an RIA - we are the investment advisor on retirement plans. We have created risk-based models for our clients to invest in (Conservative, Moderate, Aggressive, Etc.)  Every time we present to employees on education or do trustee meetings, we present a sheet showing those models performance the last 1,3,5,10 years.

We have begun changing how those models are constructed, for example like 10% of our models is in US Small Cap Funds, we are moving from a Fidelity Fund to a Vanguard Fund.

For the investment performance presentations we give EE/Trustee, it would be easiest for me to just show the 1,3,5,10 year performance of the updated model allocation, disregarding the old models.  My boss claims that according to ERISA - we need to show how the plan models actually performed, so I need to track when each plan switches their funds within the model, and calculate the actual performance. (Much like how GIPS would require past performance to be presented).

I'm new to retirement plans - this sounds crazy to me - does ERISA require actual historical performance of models to be shown, or can I show the returns of our models once their plan switches?

A client for whom we are the advisor, but not the TPA, claims they were not told that they would be top heavy for 2016. They now say there is no way that they can afford to make the top heavy minimum contribution. We have explained repeatedly that they don't have a choice. In response we are being asked to describe the consequences of not making it. They are apparently willing to accept the risk of being caught because they believe it is unlikely. Beyond disqualification, what are the consequences?

In the past, I satisfied my requirements with McKay Hochman's annual Retirement Insights class (15 hrs CE) supplemented with some recorded webinars from ASC.

ASC webinars mostly repeat and update each year, and McKay Hochman is no longer (2016 was last class).

I need ideas on where to look for CE and especially a source for several hours credit at a reasonable cost (like I got from McKay Hochman).

What are the RMD rules for non-spouse (child) rollover to inherited IRA?  His father died at about age 62, but would turn 70 1/2 in a few years.  Son and daughter are trying to get money out of plan now and this would be a consideration in the rollover.