I have a client who is taking Stock out of a previous employer's 401(k) plan. The data given to us from the distributing plan was broken down between Prior to 2016 and After 2016 amounts and cost basis data. The sources of money are after tax and company matching. Why would the 2016 before and after be significant?  Any ideas? 

Quick question:

When filing the Form 5500 for a plan AND when paying taxes for the plan; are both instances paid under the company's EIN # or the Plan's EIN #?

TIA! :)

I have a scenario that I need help with.  My parents divorced back in 1996 and as a part of the Divorce Decree there was a Consent Order stating that my father in these exact terms quoted: "shall pay the legal fees for and cause to be drafted as part of the decree a QDRO directing the Federal Office of Personnel Management to pay to the wife, son the husbands retirement, one half of the marital portion of the Husbands net annuity and, further, in the event of the Husband's death, to pay to the Wife a survivor's annuity based on the marital portion of the Husband's annuity."  It then goes on to give a formula for how the "marital portion" is to be calculated.

In 2003 my mother died unexpectedly and I settled her estate.  I never knew that there was a divorce decree until last month when I had to search for the file because my father tried to claim her retirement benefits from her previous employer and I had to send it in to show that they were divorced and at that time after receiving the divorce decree info I ended up also finding out  that he also waived any right he had to her retirement benefits in the same divorce decree.  After seeing this divorce decree and the Consent Order within it I have a few questions that I am hoping that someone here can give me some direction on:

1)  How can I find out if a QDRO was ever completed?

2)  Under these circumstances, would I, as my mothers only child and heir, inherit the benefits from the QDRO?

3)  Based on the Wording in the Decree it was my fathers responsibility to get the QDRO completed and paid for.  If he never did can it still be required of him to be done post my mothers death by her estate and how would I go about doing this?

Other possible pertinent information:

My father is a federal government employee

He has not retired yet but may be doing so within the next few months

The divorce and everything pertaining to it was done in Washington DC

My mother died in North Carolina and my father is a Maryland Resident.

If you have any additional questions that could be helpful to giving some direction please let me know.

Any Direction that can be given here would be of great help.  Thank you in advance.

Let's assume the following:

1. We have a 401(k) plan participant that has $25,000 in his account which is all 100% vested.

2. He decides to take a $5,000 loan.

3. Assume no additional contributions and/or earning to this account.

4. He fails to make the repayments and is issued a 1099-R for the deemed distribution in the amount of $5,000.

5. The loan amount of $5,000 will stay in his account until he either repays it, in which case he will have basis, or the loan is offset by his accrued benefit, in this this case $20,000 once he is eligible to receive a plan distribution. 

He now terminates from the plan with a $20,000 cash balance and a $5,000 participant loan receivable. At this point, his loan balance is offset by his accrued benefit. How much does he get? $20,000? $15,000? Also how is the final 1099-R handled? How would this offset be reflected on the 5500? 

Client has 2 plans.

Thought he efiled both plans for 2014 in 2015. We recorded both as filed also

Definitely efiled both plans for 2015 in 2016 and we recorded same

Filed 2 plans in Oct 2017. We noted one plan still wasn't filed. Told him to go back and file 002 which he did

He just got a IRS penalty notice for 001 for 2014 for $15,000

System now says 2014 5500 for 001 was not filed in 2015. First filing he made in 2017 was the 2014 form that was still in the system

2 questions

Is it worth it to try for reasonable cause or system or human error, he filed the other and thought he filed both etc

If DFVC is the best way to go, should it be filed again with just the DFVC checked?

I know this has been kicked around but i couldn't find concensus on either question

https://www.aicpa.org/interestareas/tax/resources/compliance/downloadabledocuments/due-dates-summary-chart.pdf

What did they do?? This is so complicated... Does anyone know of a website where you can etner the details (entity type/fiscal year end) and the system will spit out the due dates??

We have some deferred compensation awards, subject to 409A, that were granted in 2016 and we've discovered they violate 409A.  The errors are such that they cannot be corrected, so several participant are in violation of 409A and subject to the 20% penalty.

Now we  have corrected the plan errors going forward and would like to award some of these participants similar awards for 2018.  If we do that, will the 2016 and 2018 awards be aggregated, such that if the 2016 awards violate 409A, so will the 2018 awards, and ALL that deferred comp is subject to the 20% penalty?

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Over a year ago, someone posted the below message.  There were no responses, but I am hoping to get some feedback for this exact scenario. Please let me know if you have any thoughts. 

Company A (surviving plan) acquires Company B and the plans will be merged effective 1/1/2017. For the company match, Company A (surviving plan) has a 1-5 year graded vesting schedule and Company B has a 4 year graded schedule.

Can Company B increase the existing matching vesting schedule to 100% vesting for existing participants and then be on the same vesting schedule as Company A (surviving plan) for any new matching contributions effective 1/1/2017?

Or does the merged plan need to keep the Company B employees who were eligible before 1/1/2017 on the more favorable 4 year graded vesting schedule

In a profit sharing plan that had reallocated forfeitures, three of the participants were allocated one cent in forfeitures. Does anyone have experience making a check payable to the participant for one cent? I see another participant has a balance of thirteen cents and while it is small, that isn't as bad as one cent. The small reallocation came from a relatively new participant who received their share of reallocated forfeitures, was not fully vested, and then terminated their employment, thus creating a forfeiture of that small amount. We are lucky there was no loss in the plan or their one cent could have dropped lower.

Hello, 

A participant is demanding a copy of the Adoption Agreement. She was provided will all the other required notices. Here is her email response. I have researched and all parties I have spoken to state that the employer has discretionary choice to provide the Adoption Agreement. Has anyone encountered this and what was the response? 

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!