Employment agreement plainly says "Executive gets $50,000 a year for 5 years credited to a book account with no money actually set aside.  The Executive only gets the money if he is actively employed all the way trhough the 5 year anniversary date and is paid immediately thereafter."

We all agree I think that neither 409A nor 457f applies because there is no deferral of income beyond when the substantial risk of forfeiture lapses. 

Do I need a document beyond the employment agreement?

I guess I need a top-hat filing to avoid a 5500 filing requirement.  Is there anything else like that?

Are pre-approved plan document vendors generally providing sample sponsor amendments to permit rollovers from a qualified plan to a SIMPLE IRA (i.e. PATH  Act of 2015)?

Is this permissible not to apply the 20% mandatory tax withholding to a Non-qualified Roth Deferrals Distribution when the earning is below $200?

Who would be best to make the determination whether or not we could test two plans of a controlled group under a separate lines of business?   Same ownership- separate companies located 150 miles apart.

Erisa Attorney or clients CPA?

Does that allow you to have one SH plan and one non Safe Harbor plan and what testing would have to be combined?

Pat

Here is my fact pattern:

• Company A and Company B are in the same controlled group of companies.
• Company A and Company B each maintain separate 401k plans.
• A group of employees are transferred from Company B to Company A.
• Company B's 401k plan treats these employees as being terminated and allows them to take distributions and/or rollover their accounts.  Rollovers wind up going both to IRAs and Company A's 401k plan.

I believe this is a plan operational error.  Because the employees remained in the same controlled group, I don't believe there was a termination of employment that would have triggered a distribution event under Company B's 401k plan.  If I am correct, there are a few issues here.  One of which is Company A's 401k plan accepting a rollover that turns out not to be an eligible rollover distribution.

Is there any authority for asking the IRS, as part of a VCP application, to treat this as a plan-to-plan transfer for the affected employees?  Both Company A's and Company B's 401k plans would need to be retroactively amended to permit this transfer, but it strikes me as the "best" or "most reasonable" fix here.  Any helpful thoughts would be appreciated.

Company A and Company B are a controlled group by a recent purchase. 

Company A has about 10 HCE  52 NHCE and is a SH nonelective Plan. (12/31/16)

Company B has 2 HCE and 112 NHCE and is not a Safe Harbor Plan (12/31/16)

I think there are two options since I cannot aggregate a Safe Harbor Plan and an nonsafeharbor plan.  Plan A fails the Ration % test.

1.  Company A has to drop Safe Harbor.  Then ADP/ACP Test, Coverage Tests,  Top Heavy Test would include all employees of both companies.

2.  Company B must adopt Mirror plan of Company A - SH nonelective.  

3.  Combine into one plan - but plan would require an audit.

Am I missing Anything?

Thanks

Imagine an independent qualified public accountant in its audit of a retirement plan's financial statements discovers an operational error, one that if not corrected could result in the plan's tax disqualification.

May the same accounting firm act as the plan sponsor's representative before the IRS for a correction procedure?  (Assume the firm desires to continue as the IQPA auditor.)

Is there an independence problem?

Are there conditions under which there would not be an independence problem?

If an individual takes multiple distributions from a single IRA within a 12-month period & redeposits all the funds back into the IRA within the 60-day deadline, can the individual designate which redeposited funds are treated as an IRA rollover & which funds are considered excess contributions to be withdrawn?

My initial response is that the funds redeposited first are treated as a rollover & each subsequent deposits are treated as excess contributions. What if the individual doesn't designate the first deposit as a rollover but rather designates the largest deposit as a rollover?

There exists a control group of a staff plan who receive safe harbor contributions and individual Partner plans who contribute on an xtested basis, but do not receive a safe harbor; all plans tested together.

There is a new Partner. She would like to start her own plan on 11/1.  Although her plan will not have a safe harbor feature, does the staff plan limit her ability to start 401(k) for herself on 11/1? She has never been a participant of any of the involved plans.

Edit after receiving 2 responses below - this is not a control group, but an affiliated service group.

Company files its 5500s appropriately for 5 different benefits on separate 5500's. They are consolidating and creating a wrap plan document effective beginning of current year, with brand new plan number.

None of the current 'plans' have an existing ERISA plan document.

In addition to the resolution adopting the new plan and wrap plan document, do other plans which will be filing 'Final' 5500's need plan termination resolutions, given that there has never been a plan document to begin with?

We have a (calendar yr) client who failed the ADP and ACP tests for 2016.  Unfortunately, we didn't know until we finally received his census on 10/12/17.  It is a small plan with just 6 people; in 2015 the owner deferred a little under 6% and the testing easily passed.  He decided to max out deferrals for 2017 and so deferring at almost 14% both his ADP and ACP tests failed.  WE are trying to figure out if there is some way around the give-back and forfeiting match.

You see the NHCEs deferrals averaged 5.31%, which in our experience is not bad.  But the employer matches a straight 25%, which is almost unheard of.  His argument is that he is being far more generous than most employers, and yet he is penalized for the failed tests.

Can anyone think of a way around this?  QNEC is way too high, and yes, we are discussing SH for 2018.

I work with a recordkeeper whose calculated loan payment never seems to match the one that I calculate. I generally use a standard loan amortization schedule (a spreadsheet and I also coded one in Python), and have cross-checked it on multiple online calculators (those calculators almost always match the one I get, perhaps off by a penny).

I asked the recordkeeper about it and got a very vague answer - that it depends on the interest rate and on the time period.

Has anyone else experienced this, and if so, have you gotten an answer to the discrepancies?

Part of the reason I am asking is because I like to generate my own amortization schedule and when a payment is off by even $.10, it adds up over 5 years and makes my schedule wonky even if I try to override the payment amount. I really want to know what is going on with their calculator.

We recently discovered an error in previous software that resulted in a few participants not being recognized as eligible for defined benefit plan benefits.   They were never reported on SSA or 8955-SSA.   Should we report them in this years 8955-SSA???   And is there anything else we should do?    

If I work .6 FTE, for example, can an employer limit my HRA reimbursement to .6 of what a full-time employee would receive?

P.S. - I've seen several third party sources that say you can provide different levels of HRA benefits for, say, full-time vs. part-time employees, but have not seen any citation to official guidance.

If Adoption Agreement has 3% SH NEC to all participants checked, and no one defers - not HCE or NHCEs, must the sponsor still pay the 3% SH NEC?

We have a partnership profit sharing plan effective 2013.

Using trade date, less than $250K in plan as of 1/1/2014, using payroll date, $260K in plan with only 2013 contributions.

Trade date was basis for 2015 5500s as the first return filed.

For 2015, both partners contributed $53K each, but for 2016, only one partner contributed.

To be consistent,  if we used payroll date for the 2016 5500s, the trust report shows $159K in contributions.made during 2016.

Won't the fact that there are two participants in the plan and the contribution made during the year, cause a red flag to either or both DOL and IRS???

I came across a scenario where a company is willing to either provide an employee a matching contribution in the 401k plan, or student loan payoff assistance outside the 401k plan. 

On the surface, I'm struggling to understand how this wouldn't violate the assignment regulations of 401-13. Any thoughts on how this could be acceptable/written in a plan document? I've asked for a document to see how it's written but haven't received it yet. 

I represent a company that has an HDHP and HSA  for employees. Due to a TPA error, several HDHP and HSA participants who had not yet reached their HDHP deductible were designated as though they had. Because of this designation, said participants began receiving reimbursements from the HDHP. Obviously, this would make said participants ineligible for an HSA since they are being covered by another medical plan before reaching their deductible. Is there a way for the affected participants to pay back the reimbursement monies paid by the HDHP so they could once again become HSA eligible? To further clarify, this has all happened within the 2017 calendar year. 

Does anyone have advice about how to determine the market value of limited partnership investments?

Case:  A profit sharing plan with pooled assets (no individual direction) of a law firm with 3 partners and 10 rank and file employees has investments in real estate limited partnerships among other assets.  Taking one of the limited partnerships as an example:

The plan paid $250,000 four years ago for an 11% interest in a group of limited partners who bought a shopping center.  The center has tenants who pay rent, the partners incur expenses, etc. etc. and a K-1 is issued each year.  My research has indicated that K-1s are great as a snapshot of cash flow but do not have any information regarding market value at the end of the year of the limited partnership.  

The underlying asset has been appraised at $36,000,000.  But the market value of the limited partnership itself is nowhere near 11% of $36,000,000.  In fact, one of the other partners who also paid $250,000 for their share recently wanted to sell out.  They offered their share to the other partners.  Nobody wanted it except one, who offered 10% less than the original purchase price, and the seller declined and kept it.  However, the seller would have let it go for the full $250,000 he paid for it originally.

We have to have something provided to us that we can "hang our hat on" when we produce an annual report with account values as of December 31st.  The client has tried to push the broker who sold them the limited partnership into providing a market value, but all he can come up with is the appraisal of the real estate parcel as a whole.

All this is to say that my client is completely baffled at how to come up with a reasonable value for this type of asset.  I wondered if anyone else has had this problem and how you resolved it?

Thank you.