RE: my  company has sponsored a 401(k) Plan for a long time, and in recent years I have downsized my company by subbing work out and reducing employees.  Now, I'm down to only 1 part time employee, less than 1,00 hours per year.  But, the part time employee and one ex-employee have never moved their account balances somewhere else. 

Can I start filing a 5500EZ?   It would be so much EZer.    

https://www.irs.gov/pub/irs-drop/n-17-64.pdf

Highlights:

DB 415 limit increases from $215,000 to $220,000

DC 415 limit increases from $54,000 to $55,000

Elective deferral limit increases from $18,000 to $18,500

Annual compensation limit increases from $270,000 to $275,000

Key employee remains unchanged at $175,000

HCE remains unchanged at $120,000

457 deferral limit increased from $18,000 to $18,500

Is a QDIA notice required for a non ERISA Plan?  Please provide the regulations that address this question. Thanks.

Now that 5500 season is over

If you have never run a report globally, follow notes above.

This will produce a report for every plan that has (or might need) a minimum distribution (I ended up with 110 of them - each report will be labeled min distribution report followed by the plan ID).  works only on DC plans (and possibly cash balance plans because they have an account balance)

Report should work every year until they change the min distribution factors.

of course it's a use at your own risk, but I haven't found any differences between the results and the "standard" Relius report. (well, ok, sometimes you have to 'set trade date field' to enable the Relius standard report to pull the actual balance.)

reminder: adjustments may be needed for non-calendar year plans.

Min Distributions Report.rpt

I own a small business. The only employees are me and my wife.

In 2016, I set up a SIMPLE IRA which we have maxed out in 2016 and 2017, making the first deposits in March 2016.

I recently came to believe that a Solo 401(k) would be a better option for our circumstances. I would like to establish it and start contributing to the Solo 401(k) as soon as possible.

I understand the funds in the SIMPLE cannot be transferred before April 2018 without significant penalty.

I don't think I can contribute in 2017, per the "one plan requirement". However, can I have an effective date for the Solo 401(k) of Jan 1 2017 or now or do I have to wait until Jan 1, 2018 or Jan 1, 2019?  In other words, does the one plan requirement mandate only having one plan or only contributing to one plan?

What is the earliest I can contribute to the Solo 401(k)? I think I can start Jan 1, 2018, if I don't contribute to the SIMPLE in 2018, but I'm not sure. Do I need to terminate the SIMPLE (announce to myself and my wife before November 2nd) before I contribute (same as my previous question)? Can I terminate the SIMPLE this year, or do I have to wait until March 2018 (the two year anniversary of the first deposit)?

Thanks!

HH

Is there a regulation that defines "base salary" for purposes of a 409A elective account balance plan? I typically use a definition in my plan docs that describes what is versus what is not considered base salary, but I'm working with a takeover plan where the doc does not define base salary. The client continues to have fluctuations in contribution amounts due to PTO donations. They have always considered PTO as part of base salary. Is there any 409A standard definition or some other basis for me to look to? Thanks.

I have an extremely weird scenario that I'm absolutely stuck on.

I have a pre-ERISA irrevocable trust that, for some reason, is being litigated to get it under ERISA coverage.  

Important facts are as follows:

• Trust covers employees of let's say 20 individuals, all within one family.  When a family member dies, the plan automatically covers the next of kin's employees.  So the hypothetical 20 individuals is over a course of years; they weren't all involved at the same time.
• The trust was originally created by one individual, with a few others serving as trustees.  Trustees changed over the years, but suffice to say that most owner individuals never actively participated in the plan; it automatically covered their employees.
• The trust was originally funded with stock; there have since been no other contributions what so ever.  The trust would terminate when it ran out of money or beneficiaries.  Critical, to me, is the fact that no one can amend or terminate the plan, and the trustees' job was limited to directing payouts.  This plan literally has to run its course, and the end is not in sight.  

I have some solid arguments based around establishing/maintaining the plan, so I'm not worried about arguing that element.  The argument I can't substantiate beyond my gut feeling is that basically no entity having autonomy over the plan is OK under ERISA.  In the same breath, I have employers not "maintaining" a plan that they're also forced to participate in in perpetuity, which is bizarre to me.  None of these employers have taken active steps to adopt the plan (barring it's inception), nor have they had any hand in administration.  The whole thing just doesn't sit well with me.

Any insight would be much appreciated; thank you.

I know this may sound ignorant, but we'd like to import financial activity into admin software on a cash basis for top heavy, refunds, RMD's, 5500's, etc, but still want to run coverage and nondiscrimination tests only on census and calculated annual additions.  How do the various softwares handle cash basis accounting?

Told an advisor that I would ask around about software that people are using to be able to provide their clients with rates of return on their model portfolios.  I assume there must be software out there where this can be tracked?  Tracked on the basis of $1,000 invested (for example) with out adjustment for any participant activity (xfers in/out, etc.).  just how well did the funds the RIA picked perform.

Line 7 instruction to 5500 clearly says: "For pension benefit plans, “alternate payees” entitled to benefits under a qualified domestic relations order are not to be counted as participants for this line." (emphasis mine).

What about Schedule SB Line 3 Column (1): Funding Target/Participant Count Breakdown—Enter the number of participants, including beneficiaries of deceased participants, who are or who will be entitled to benefits under the plan? There are no mentioning of "alternate payees" here. Do you include them in the count?

Hello. I am new to 457 and hoping for some guidance. A tax exempt entity matches 457(b) deferrals. There is a vesting schedule causing the matching to vest and excess deferrals in years subsequent to the initial deferral. If the plan distributes the excess deferral after April 15, does this cause double taxation in a manner similar to the 401(k) plan treatment? My reading of the regulations and secondary materials suggest not. I can find nothing other than discussion relating to failure of the plan generally after April 15 and taxation of deferred amounts that are not subject to forfeiture. But if excess match is taxable in year vested and then distributed in subsequent year, how is it reported and is it taxable at distribution? Is there basis under sec. 72?

A previous discussion and example were helpful but did not address matching and did not address specifics as to what is the effect of plan failure given late correction.

Can someone provide an example with authority of reporting on W2 for an excess deferral caused by match vesting where distribution of excess is made in subsequent year after April 15?

Thanks for any help you can provide.

Forfeitures at end of year = $99.13  (WOW!) 

Could be used for plan expenses or allocated as Match or PS. - (no QNEC allowed)

Issues:  

1) There are no plan expenses

2) Match:  No prior match for ACP.  Match allocation does not exclude HCEs therefore ACP would fail and HCE refund of <$6 would occur (fee for refund is $100).

3) PS:  2 participants who otherwise do not have accounts would each receive an allocation of $2

Any suggestions for how to otherwise dispose of the forfeitures?  

Employer did not use the plan definiution of compensation correctly and excluded bonus payments for 2 now former employees. Sef-correction is being performed after severance from employment. 

Would the 50% employer corrective contribution count towards the employee's $18,000 annual contribution limit for 2017?

Thank you!

I have a question regarding the IRS 2017 Transit/Parking limit of $255/ month. We have some clients who have set up pretax transit/parking and also after tax parking/transit employee deductions. From an IRS limit perspective under the cafeteria plans, do I also include EE after tax transit/parking payroll deductions combined with the EE pretax transit/parking deduction limit of $255/ month?

Or is the limit of $255 just for pretax transit/parking ee payroll deductions and the employee can contribute more than $255/ month for aftertax transit/parking to their account?

I work for a payroll software company and we want to put a WARNING message on the employee's payroll when they exceed the $255/month limit...but I am not sure if the limit includes after tax transit/parking EE contributions so that is why I am asking.

Thank you,

Linda Adams

I work for a Wealth Management firm, and I have dealt a bit with SIMPLE IRA's, SEP's, and Solo 401(k)'s.

I have read alot of the IRS Materials on these plans and have executed these plans, but I would like some formal education/guidance on these plans.  Are there any educational webinars or exams I could take that would deepen my knowledge of the issues surrounding these plans?

I plan on taking the QKA next year at some point, not sure if that material is covered.

I know its a small topic but my worst feeling is when I tell a client something and I end up not painting a full picture or making them aware of issues or simply being wrong.

I did look at the recorded presentations here and could not find anything - let me know if i missed something.

Husband and wife each sign up for family HDHP coverage, creating a double HDHP coverage situation. Each signs up separately for HSA plan for the individual (not family) limit. So far so good, it seems, as neither has coverage that is not a Qualified HDHP.

The wrinkle: carrier reports coordinating benefits for the double HDHP coverage so that all plan deductibles and/or co-payments are waived, resulting in no-cost medical services being received.

This seems a bit problematic in that, while the employees seem to have done everything right, the carrier's action seems to negate the intent of the law. We are wondering how the IRS might view this situation.

Your thoughts and opinions would be most appreciated.

Company has an IRS Model SEP and wants to start a new CB plan. Can they start the CB plan for 2017? Does it matter if any SEP contributions have been made yet for 2017? If they cannot start the CB plan under the current situation, can they terminate the SEP before year end and then adopt the CB plan before 12/31/17. Is there any way that they can start the CB plan for 2017 and be in compliance?

I was under the belief that if the IRS Model SEP existed at any time during 2017 then they cannot start a qualified plan, but I have never faced this situation in actual practice.

Issue 1:  Do you believe that a plan administrator MUST reject a DRO if it contains tax language that is inconsistent with tax law?  For example, a DRO provision that distributions to a spouse or former spouse AP shall be taxed to the Participant or, conversely, that distributions to a child or other dependent AP shall be taxed to the AP.  Although most would say both provisions are inconsistent with federal tax law, can the plan administrator approve a DRO that contains one of them, then ignore the DRO tax provision and report/withhold based on applicable tax law?  If your answer is no, would it change your mind if the plan's QDRO procedures provide (1) the plan administrator will not reject a DRO based on any tax language in it, but (2) the plan administrator will report/withhold taxes as required by law, regardless of any inconsistent provisions in the DRO?

Issue 2:  Although it is clear that a Participant is taxed on distributions to a child or other dependent AP, there is no consensus on tax withholding from such payments.  Some TPA's do not withhold taxes from such distributions even without a withholding waiver on Form W-4P.  Some TPA's do withhold in this situation unless the Participant waives withholding on Form W-4P.  Earlier threads on this forum also don't produce agreement on this.  If you believe tax withholding is appropriate (absent a waiver), and if you received a DRO that directed the plan administrator not to withhold taxes from the distribution, would you (1) reject the DRO as inconsistent with tax law, (2) approve the DRO, but still withhold because the DRO is not an effective waiver, or (3) approve the DRO and not withhold taxes, treating the DRO as an effective waiver?  Does your answer change if the DRO also contained a provision, in the event the plan administrator requires a withholding waiver, that orders the Participant to fill out and return the appropriate tax waiver to the plan administrator?

I am a financial advisor who dabbles in 401(k) so I dont know a ton. 

I have a client who owns a business and has a Solo 401(K) custodied at Fidelity. So no real recordkeeper.

She put $18k in as an "employee contribution" in April.  She filed taxes yesterday and mistakenly tried to put in $27K as Employee and employer contribution ($9k employer contribution) and Fidelity rejected it because she didn't have enough cash in her account. She should have just requested $9k, but she forgot about her earlier $18k deposit.

Because she already filed taxes $9k this year is listed as Employer dollars.  Because Fidelity doesnt track Employee/Employer dollar differences in these type of accounts can I just basically say the half of the $18k deposit in April was employer dollars and request $9k be pulled today for another employee deposit? Would that cause any problems?

There is a multiple employer plan that has several adopting employers. One of the adopting employers has been operating under the plan without an adoption agreement since the spring of 2017. Can this be corrected with an amendment because it's still within that plan year or does it need to go through a correction program? 

Also, one of the adopting employers has merged into another adopting employer, does the merged plan need to sign a new participation agreement or should it be terminated?