Non-profit organization, non-governmental (a private college). They have a qualified plan (money purchase)  where, as a condition of employment, the employee MUST contribute 5% of pay. Employer then matches anywhere from 5 to 10 % of pay, depending upon service, etc. So far, so good.

The baffling part is that the SPD, and the plan audit notes on the 5500 form clearly indicate that these mandatory employee contributions are PRE-TAX. We’re under the impression, and the EOB seems to confirm, that such mandatory contributions are AFTER-TAX.

Am I missing something? Are mandatory employee contributions (non-governmental plan) allowed to be pre-tax? Or is it perhaps poor drafting in SPD?

I've got a participant who died at age 69 and one month back in December 2016.  Her beneficiary designation form says to pay her account balance to some charitable NFP (she was not married at time of death).  Is there any withholding taken from the payment?  Thanks.

If an employer begins to pay the related 403(b) fees, does that employer involvement cause the plan to fall under ERISA status to shift the plan from non-ERSIA 403(b) to ERISA 403(b)?

Hello everyone,

I just wanted to know if anyone here sat for ASPPA's DC-1 exam recently? I'd like to discuss few things.

Thanks.

With some recent threads regarding the fiduciary rule (is X a fiduciary under the new rule?), I wanted to revisit how people are handling their 408b-2 notices.

Is the fact that the fiduciary rule is now in effect changing your approach to your 408b-2 disclosures (or lack of 408b-2 disclosures)?  Or do you do 408b-2 disclosures for all clients regardless of covered service provider status?

Are there brokers that specialize in the sale of TPA Firms?  If so, who are they?  Thanks in advance for your help.  

I've tried searching for an answer to this and cannot find a direct source for a response.  Also, my plan document is eerily quiet on the issue so I thought I'd look for some ideas here.

I have a plan that was effective 1/1/2013 and frozen 1/1/2016.  The formula is 10% of comp per year of service and 3 year average comp of $260,000.

As of the freeze date, the monthly accrued benefit is $6,500, but is limited to the 415 dollar limit of $5,250 (due to the limit of 3 years plan participation).

As of 1/1/2017, the plan formula is still $6,500, but does the 415 dollar limit increase to $7,000 due to another year of plan participation?

Suppose you have a small employer with 7 employees. All are full time and have been with the company for years.

They sponsor a defined benefit plan and a profit sharing plan.

The 100% owner and two other employees are covered under the DB. three other employees are covered under the profit sharing plan. The owners son is excluded from both plans. Therefore, no employee participates in both plans.

The profit sharing plan has no HCEs benefiting. Therefore, it passes 401(b) and all of its participants receive the same profit sharing allocation so no other testing issues.

The DB passes 410(b) but NHCEs receive slightly less than the business owner so they run 401(a)4 and it passes. In completing the 401(a)4 test, I believe the employees who are excluded need to be included in the test with $0's correct? And if so, don't those being excluded need to receive a minimum gateway?

Thanks.

We have a SH 401(k) that is terminating.  One of the owners (more than 5%) is over 70 !/2 and will need to take his 2017 RMD.  This participant has an outstanding loan balance.  If he decides to default on the loan can the outstanding value of the loan be used to satisfy the RMD?  The plan's assets also include some real estate.  If this same participant wants to retain ownership could the value of the property be used as part of the RMD?   Thank you for your responses

if a safe harbor nonelective plan allows after-tax but does not have a match, does it have to pass the ACP test?

On the new Form 5300, Line 12 asks if interested parties have been given the required notice and then says "attach statement". As opposed to all the other lines that say attach statement, the instructions for line 12 say nothing about attaching a statement or what it is supposed to say. If they want a copy of the Notice to Interested Parties, is it too much to ask that the instructions say so? Maybe this is a carryover from the old line 12 which asked a different question but had the attach statement requirement which was then explained in the old instructions? How are people handling this line?

Okay I am going to make this easy as I swear I've read something, somewhere on this topic:

Person does not qualify to make the Roth IRA contribution due to income.  They open a traditional (back door) IRA and convert to Roth.

Question:  Can they do that regardless of any other rules?  For example, I swore I read somewhere that if the person had any other traditional IRA established, there would be taxation on the back door contribution other than conversion.  Am I losing it?  I've talked to a few IRA custodians and they no worries, I can do make the contribution without any regard to whether I have any other IRA(s) established.  True?

Thanks in advance.

A Lead Employer no longer has participating employees and will be terminating from a multiple employer plan. The plan provides for amendments, but is silent on changing the Lead Employer (named fiduciary) to another participating employer (to be determined).

Does anyone have general guidance to offer on the necessary documentation/paper trail to accomplish this?

All guidance will be greatly appreciated..... I'm not finding anything on point in my research.

Thank you

Took over a plan without knowing there was a life insurance asset. Prior bundle provider did not disclose this asset on their statements/reporting. We discovered the asset while trying to prepare the 2016 5500 and realized we were short over $1M in plan assets.  Concluded that the life insurance asset was rolled into the plan in 2015, and it appears to be an owner's life insurance policy, it is in the name of the plan and appears to have a $90,000 loan against it (not being repaid). Prior document had no indication that life insurance was allowed as a plan investment. Trying to decide if we want to keep the plan admin business or let it go since we don't have experience with life insurance as a plan asset.  We can learn, but do we want to? Is the $90,000 loan an issue? Any guidance is much appreciated.

If correct by filing the Form 5330 and paying the excise tax, can the DOL calculator be used to determine the earnings?  A VFCP filing will not be done.  I have seen where some people use the DOL calculator even when the VFCP filing will not be done.  I have also seen where it is indicated that the DOL calculator cannot be used if not filing under VFCP.  What are people actually using to determine earnings on the late deposits?

401(k) and Profit Sharing Plans with life insurance filing a 5500-SF. Are the insurance premiums reported as an expense? If yes, on which line? Or is it netted out of the gains on line 8b?

Forgive me if this is addressed elsewhere as I was unable to find.  

Client has an executive with SERP type benefit that will vest upon his upcoming retirement.  As a result, he will recognize significant Medicare taxes on the present value of the future SERP benefits in 2017.  (Executive is already maxed out on SS taxes for 2017 so no amount owed there.)  Question is how best to collect those taxes from the executive.  In the month he retirees, he will only work a short portion of the month and will not net enough regular wages to cover the significant Medicare taxes due.  

Can executive simply write check to employer to cover the remaining FICA taxes due?

Would it be possible / preferrable to withhold the full amount needed from pay for the month prior to the retirement month (even though benefits not technically recognized / vested then) since executive will net more than enough to cover during the full month of work preceding retirement?

Can employer take advantage of rule of administrative convenience and wait until 12/31/17 to recognize FICA amount then employ lag rule for withholding and collect from the SERP payments made during the first quarter of 2018?

Ideally I think everyone would just have executive pay the amount due into the employer upon retirement (out of personal funds) but that amount is not already in the employer's payroll system, etc. so question becomes how to get that added in or credited if that is possible.

I have a plan that is terminating as of 8/31/2017.  It's a 12/31 PYE. It was top heavy for the 12/31/2016 determination date so they have to make a top heavy contribution based on comp as  of 8/31/2017, correct? However, do I need to do a top heavy test for the 8/3/2017 short plan year determination date since the company and plan will no longer exist in 2018?

Thank you in advance

I have several decades of experience in the TPA industry and have developed numerous relationships with financial advisers and plan sponsors throughout the years.  A few of my colleagues and I feel the time has come for us to look into acquiring an existing book of business to jump-start building our own firm.  We are primarily looking at NJ, PA, MD, DC, and VA but anywhere down the east coast through FL is desirable.  We all have extensive 401(k)/403(b)/457(b)/457(f) experience and have also worked with actuaries on DB/Cash Balance plans.

Does anyone out there know of a resource, whether it's a search firm or a listing, that can assist in finding a small TPA (or two) that would like to sell their book of business?  I have read through multiple forums and there has been a lot of great information posted by those of you that have already gone through what we are attempting.  Any insight would be appreciated - and if you just so happen to want to sell a book of business, please let me know.

We have a client with pooled assets. The client's CPA 'manages' the items that need to be done annually. The CPA forgot to get the annual RMD for the owner processed (after several reminders). The RMD came out of the account on 1/20/17 and should have been out 12/31/16. Is the remedy a 5330? Suggestions?