Got a quick one -

Doctor has had a DB plan for his one-man consulting business since 1/1/2008, and he earns well over any limits to worry about.

So 2017 is going to be his tenth year of participation (nominally defined as 1000 hours), and so once he gets his full 415 limit, the idea is to terminate and have him roll over a lump sum.

The 415 regulations define a year of participation as calculated to fractions of a year.  But they also say the year is credited if the hours are worked.

Should I be interpreting that to say it's a full tenth year of participation as of the moment he gets to 1000 hours?  Or does it mean he has to actually have the twelve months in the bank?  He might get to 1000 hours in June, but if we terminate the plan right at that point, I don't want the surprise that he would only get 9.5/10ths of the $215,000 limit. 

He'd obviously rather go for the full limit, and so if it's legitimate to count 2017 as a full year 10 before the end of the year, he could terminate and distribute before December 31, thus avoiding any 2018 plan year with its additional costs.

Thanks...

--Brian Gordon

Is there any way to retrieve more than 10 digits stored in my BA II plus calculator?

We have a plan that will be terminating and has about 10 terminated participants with remaining balances.  A few of these have been gone so long their unvested money has already been forfeited.

What happens to these participants upon PLAN termination?  Do they become fully vested and get their forfeitures back in their accounts?  Recognize that these forfeitures have already been allocated to other participants.

Have a new 401(k) plan and am doing enrollments.  This question came up twice: Both employee are separated from spouse (not a legal separation), they have not spoken in 4 years, one only knows the general where abouts, the other knows the spouse is in prison (domestic violence, etc).  Neither wants to contact with ex.

Suggestions on how to name someone else as primary beneficiary?

I have a scenario I found rather odd.  I have a small business that wishes to cover insurance premiums for one NHCE, excluding all others and all HCEs.  I feel as though I could get away with an HRA not integrated with group insurance/QSEHRA, but I'm just not sure if excluding everyone else will qualify it as a "one employee" plan.  The sponsor doesn't want the employee to be taxed, hence looking into a 105 plan.

Thanks for any help in advance!  

To avoid the independent qualified public auditor opinion requirement for the Form 5500, does the fidelity bond need to cover 100% of an employer's non-publicly traded stock held within the plan, or can such stock be considered as a qualifying plan asset?

SH Match formula is 100% up to 6% of pay.  Is this okay?

Is it just a discretionary match that is capped at 4% of pay?

The plan document states the employer makes the match on a payroll basis.  A Partner taking draws makes their deferral contribution one time at year-end.  Is the Partner's match calculated on their full year's Schedule C compensation?

Profit sharing plan assets are trustee directed and held in a pooled account. Terminated participant requests a distribution of his vested balance.  Participant completes application for distribution and sends it directly to the investment house.   Investment Company makes full payment to the participant.  What is the penalty, if any, to the plan sponsor for the failure to withhold the mandatory 20% tax from a lump sum distribution to a participant?

Quick question: We reconcile our plans on an accrual basis for Form 5500 SF reporting. Because of this we end up with receivable contributions from one year to another, typically due to pending payrolls. We have had a question come up because of this. Our sponsors will mark a payroll file (for example) as the payroll period 12/01/15 to 12/31/15, with a pay date of 01/15/16. The payroll is then processed when given to us, say 01/16/16. Would you mark this payroll as a receivable contribution for 2015 because of the pay period OR would you leave it off of the 2015 plan year because of the actual pay date to ppts of 01/15/16? Advice is appreciated, thanks!

Per the 408(k) IRS rules, less restrictive rules may be established to include employees and owners in this retirement plan (see below). Assuming that I start the 408(k) for my company on January 1st, 2017, and we just started a new company on the same date, can one of the less restrictive eligibility requirements be the following?:

Employees do not have to fulfill the requirement of the 3 out of 5 year working at the company and may qualify for the 408(k) regardless of the number of years they have worked for the company if they are part of the executive staff. The executive staff includes the following positions: CEO, CTO, CFO, President, Vice President, Director. All other employees qualify for the 408(k) once they meet the 3 out of 5 year requirement.

This seems like a less restrictive requirement that we can set up and allows us to fund the SEP IRA's for owners and/or executive staff as an incentive to attract people at those positions, while also not mandating that we fund everyone's SEP IRA immediately.

Employee terminated in 2010.  Employee will turn 70.5 in September 2017.  Employee contacted us, the TPA,  today to initiate a rollover of her account.  Since she is not yet 70.5 can she roll her entire account balance or is she subject to an RMD?  We cannot agree on the answer.

Any guidance you can provide would be helpful.

I recently drafted a standard QDRO splitting H's 401(k) plan 50/50 as of the date of the divorce (4/04/16) plus earnings through the date account segregation. H also owes W $24,000 to cover his 1/2 of the family debt and the attorneys want to take it from the 401(k) as he doesn't have the money anywhere else. The divorce judgement has been amended to reflect this. I figure I have 3 revision options:

1) Reflect a percentage greater than 50% that will approximately amount to 50% + $24,000 (i.e. 59/41, etc.)

2) Use #1 to come up with an agreed dollar amount and award a flat dollar amount.

3) Keep the current formula noted above (50/50 plus earnings) plus $24,000. 

I don't see a problem with any of the options, but wonder if a plan administrator will accept #3 even though it seems the most accurate. Any thoughts.

A plan participant retired on his normal retirement date with a $650 monthly benefit. 3 years later it was discovered that the benefit was calculated incorrectly and the corrected monthly benefit amount should have been $700. There are obviously a number of different factors that could lead to this (incorrect compensation used, incorrect service calculations, etc).

The plan sponsor wants to self-correct this failure and follow the EPCRS correction principles in which a full correction will be made, restoring the plan to the position it would have been in had the failure not occurred.

However the plan sponsor is looking for guidance on exactly *how* to correct the failure. They are struggling with whether they just provide a lump sum (with interest) for the $50 per month that was missed over the last 3 years, and then correct the benefit going forward - or whether they actuarially adjust the benefit going forward to make up for the missed payments. They are also wondering if they should allow the participant to elect a new form of payment for the $50 (this doesn't seem necessary). I imagine there are many methods of correcting this failure.

Does anyone know if there is any guidance or a preferred method?

Anyone ever created a spreadsheet to mimic the DOL calculator that one could just copy/paste the information into the spreadsheet?  Sure would be easier than doing them one by one on the DOL page. 

Why is it that every President since Bush wants to get rid of 401ks?

First it was Bush with his LSA, RSA, and ERSA Plan. Then Obama and his Retirement Annuities.

Now its Trump who wants tax S Corporations, REITs, RICs and small business limited liability corporations at a 15% tax. However retirement plan distributions would be taxed at 35%.

Making sure I can wrap my head around early eligibility. If calendar year plan is setup for 83 hours a month in first three months, consecutive months, enter monthly - with 1 year and 1,000 hours (plan year) as subsequent - if someone is hired 5/8/17 and doesn't work 83 hours each month by 8/7/17, then they have to work 1,000 in plan year 2017 to enter 1/1/18. If not, they have plan year 2018 to get 1,000 hours and enter 1/1/19, correct? Or am I missing something? 

Hello,

For retirees living abroad, may their international or government provided health insurance premiums and insurance out of pocket expenses be reimbursed by an USA HRA (former employer lumpsum awarded at retirement for medical expenses)?  I would think no to other government premium insurance cost, but yes to private international medical polices and OOP. ?

Carrie

Co. A acquires in Co. B in 2016.  Co. A's plan grants predecessor service with Co. B for eligibility purposes.  Co. B had a plan that was into Co. A's plan at acquisition. 

John Doe worked for Co. B from 2001 through 2005 and participated in Co. B' s plan.  John Doe is rehired in 2017.  We are trying to determine whether he is immediately eligible.  Co. A's plan document provides that after five consecutive one year breaks in service, rehired participants are immediately eligible if they had any nonforfeitable interest in the Plan to employer money.

Would "Plan" generally include Co. B's plan which at this point has gone away.  My inclination is yes because it was merged into Co. A's plan, but I'm not 100% sure about that. 

Thanks in advance for any guidance. 

client formed their own 401K after deciding to leave ADP MEP, December 1st, 2016.

Effective date of plan 12/1/2016, plan is a SHNE with the 3% non-elective contribution.

Wouldn't the safe harbor contribution be due for only 1 month?

Plan Year and limitation year both calendar year.