I am proposing on a plan with St. Thomas Employees.  The client is a control group with 1 Company in the US and 2 companies in St. Thomas.  They have a 401(k)/SHBM plan and have allowed the St. Thomas employees to adopt the plan.  In order to receive certain tax deductions the client must provide a Contribution to the St. Thomas employees and would treat this as a PS contribution.  My thought is to separate the plans as long as coverage tests pass as the owner wants to max out his contribution.  Any thoughts?  Has anyone worked on a plan with St. Thomas employees? 

I am recalling an ASPPA workshop of a few years ago, where it was advised not to give any HCEs the safe harbor non-elective contribution.

I was not an attendee.  My client maintains a safe harbor 401K/PSP new comp allocations.  After 3 years, now he wants to know why he or any of the family members did not receive the "safe harbor" 3% contribution.

Besides that language in the plan document, as well as the fact that the general test stands a greater chance of being blown, what are some other good reasons???

I was working as a regular employee for a huge company A for many years.

I was recently laid off. I found another job with a small consulting firm B (which just puts people on its the pay roll, the actual work is for another big client C who I found myself).

The company B is just a pass through, it takes it cut from the hourly rate offered by C and runs the payroll, etc. It does a Health insurance plan (with 2 different options) but does not subsidize it at all.

Now I am considering my best options for Health Insurance.

- Option one, I can sign up for Cobra offered by A (good for 18 months) but I pay the full prize now and not the employer A subsidized price. or

- Option two, I can select one of the options offered by B.

Looking at the prices and deductibles etc, I like the Cobra option from A (as it was a much bigger company than B).

Is there any way I can pay for that option using pre tax dollars from employer B (they do provide HSA if it helps in any way)?

If yes, then how?

If no, then should I compare the Options one and two, using post tax dollars for one and pre tax dollars for two, taking into account their actual costs to me?

thanks.

Pardon me, if I am making any wrong assumptions here. I have never dealt with this stuff before.

Can an employer amend their tiered-vesting match to give immediate 100% vesting to only actively employed participants' balances?  Put another way, can an employer make all match balances for only active employees 100% vested, while keeping termed participants on the existing tiered vesting schedule?  Note this full vesting would be on existing balances as well as future match contributions for active employees.  I'm a bit rusty on protected benefits but don't immediately see where any accrued non-forfeitable benefits are being reduced in any way.  Any insights and guidance are most appreciated, as always!!  Thanks! 

Company acquires sub of seller via an asset purchase transaction and decides to employ certain of the sub's employees following close of the transaction.  Buyer is an ALE.  There will be a lag time until Buyer gets plans in place for the acquired employees (it's putting separate plan in place for the acquired employees).  Buyer is considering paying for acquired employees' COBRA under Seller's plan on a tax-free basis.  Any thoughts as to whether this will work, or what issues it may raise?  What about the ACA concerns?  Thanks in advance.  

Just saw the new article that ASPPA now wants us to Save our Savings:

https://www.saveoursavings.org/

I thought we were still saving our 401k and protecting our piggy.  I can't save everything - I'm not Melissa McCarthy. :)

A small plan just discovered an error in which they did not make their 2015 safe harbor and profit sharing contribution. They took the deduction and tried to process the contribution but the submission never went fully through so the money was never withdrawn from their account. They obviously already filed their 2015 tax return and may have already filed 2016. Is the only way to fix this amend the tax returns and not take the 2015 deduction or can they document the attempted the submission?

Maybe someone has experience with guild plans, this is specifically the Directors Guild but probably applies to similar situations.  (Not my client but CPA called me about it.)

A partnership has a studio and makes commercials.  One partner (I think it is just one of them) is in the Directors Guild.  Participants in the guild pay into the guild pension plan(s) based on their income, which is reported to the guild, but otherwise not passed through the guild.  In prior years, these payments were small and buried on the partnership return as pension expense.  An internal audit of some sort resulted in substantial additional pension (and health insurance) costs for 2016, based on prior years' under-reported income (under-reported to the guild). The partnership paid the guild the amount due and called them guaranteed payments to the partner.  The amounts are, let's say, $52,000.  CPA intends to deduct them on the 1040 as Keogh contributions.  To make it interesting, the partnership has a SEP, and partners have typically maxed contributions at $53K.  CPA wanted to know if this partner would be limited to $1,000, or could do $53,000, or...?  (Interestingly, one of the guild plans is a DB, and one is a DC, and the reported DC contributions were split into "employee" and "employer" and exceeded $53,000.)

So...are those guild payments properly deducted on the 1040?  Something about that part doesn't seem right, but I can't put my finger on it.  I think the SEP contribution could be $53,000.  I guess it boils down to "Who's the Employer" for the guild contributions.

I can't think of any reason not to commingle a 457b and 457f investments? OK, there are different vesting rules, but it's no different than a 401k FBO account with PS and 401k.  Let me know what others are doing.

Also, it would be one single Rabbi Trust for both plans.

Good afternoon everyone!  I'm hoping one of the bright minds on here can shine some light on the following topic and proposed solution:

Company A has a 401k plan with it's assets in participant directed accounts with a recordkeeper. Company B  became part of an affiliated service group with Company A however previously participated in a MEP.  They ceased participation in the MEP and want to move their assets in that plan to Merrill Lynch.  To do this there are a few options:

1. Sponsor their own plan with the assets in a trustee directed brokerage account (pooled account with both HCE and non-HCE assets) with Merrill Lynch and transfer the assets from the MEP into it. Company A is much larger than Company B and since BRF testing would be needed due to different investment options, by using a trustee directed brokerage account, BRF testing on the benefit of having participant directed accounts would pass.

2. Sponsor their own plan and transfer the assets from the MEP into it, terminate it and rollover their assets into IRAs at Merrill Lynch and then wait a year to participate in Company A's plan.

3. Transfer the MEP assets into a trustee directed brokerage account with Merrill Lynch that is considered part of Company A's plan.

Question 1: Is option 3 permissible?  I have never seen a plan that has both participant directed accounts and a trustee directed brokerage account.  Company B would be the only one with assets in the brokerage account but both Company A and B will have participant directed accounts under Company A's plan

Question 2: Would the BRF testing be done again only on the right to have participant directed accounts or is there a concern that only Company B has the right to have assets in a trustee directed brokerage account?

I have a 401(k) Safe Harbor Match Plan that excludes Bonuses. It fails 414(s) for 2016. The Plan is a McKay Hochman non-standardized prototype using Basic Document #03. The plan allows for exclusion of bonuses as long as compensation is tested under 414(s), but I can't find where it addresses what to do if 414(s) fails. If anyone know where fail safe language is to permit full comp, can you point it out for me? If there is none, can I amend the plan or is it just no longer a Safe Harbor Plan? I know the topic has been addressed before, but there seems to be no definitive answer.  

I have been in a debate with a TPA firm over whether or not a Form 5500 should be filed in the following scenario. They are telling me a filing is not required. I asked them to show me documentation as to why not and their answer is that it is "industry standard" not to file. I would like to ask the Benefitslink experts if this really is "industry standard". Their argument is no assets therefore no filing since they choose to file on a cash basis. The EOB has an example almost identical to this which says to file. I called the Office of Chief Accountant they say file and they referenced page 2 of the 5500 instructions.

Situation:

Traditional 401k plan was effective December 1, 2016. Plan year ending December 31, 2016. Document was signed and the first payroll withholding happened on December 31, 2016. Deposit of the funds was made first week in January 2017. 

File Form 5500 for 2016? Yes or No? If you respond with "no" will you please share documentation as to why? Is it industry standard not to file with $0 assets when you have participants and withholding? We are not changing the effective date of the plan to 2017, deferrals were clearly withheld in 2016 and there were participants on December 1, 2016.

Thank you

A safe harbor plan distributes a hardship under IRS safe harbor hardship rules, to a participant. We know this is an operational failure. What is the correction and consequence? I can see it being treated under the overpayment rules and ask for the distribution to be returned (lets assume there are no other sources that can fulfill the amount of the hardship need).  Does this distribution blow the safe harbor status of the plan by any chance, and are there any other consequences?

Thanks!

One company, 2 plans.  The plans used to satisfy coverage separately using ratio test.

Now they don't.  Can I apply the ABT for coverage separately (considering those in other plan as zeroes)?  Or must the populations be aggregated?

And if they are aggregated thusly, will I lose my ability to perform nondiscrimination testing separately?

I have a client that implemented a Profit Sharing Plan at the end of 2016.  The plan document was drafted with the addition of a 401(k) and Safe Harbor feature, to be effective February 10, 2017, as this was expected to be the first pay date from which deferrals would be withheld.  The plan sponsor decided to switch platform providers late in the game, requiring all new contract paperwork, and the implementation process in still under way.  Now, the expected deferral start date is May 10, 2017.  Employees had previously been provided with an SPD and Safe Harbor notice referencing the February 10th date as the date on which they could start deferring.

I did not think that we could amend the effective date of the deferrals that was already in a document signed prior to the end of 2016, which left me thinking that this was a deferral failure that was going to be corrected within three months and so I only needed to provide a notice to the employees (there is no match). 

Questions:

1) The notice requirement under EPCRS for the deferral failure must reference deferral percentages that were to be withheld.  Enrollment meetings have not occurred yet so no deferrals have been elected.  So, am I going about this all wrong - is this not the way to correct? 

2) Is it possible to just amend at this point to change the effective date of deferrals and safe harbor to be May 10, 2017 with no additional notice or correction for the employees? 

The thing is, I am sure that this happens ALL the time with start-up plans.  For a multitude of reasons, the plan may be delayed in getting set-up and ready for deferral submissions or enrollment meetings are delayed.  

3)  What do you do in this situation where deferrals don't start on the effective date referenced in the plan document? 

Thank you so much!

I am interested in trying to figure,out. How I can reviews full benefit from my former spouse.  Our divorce decree says that I am in titled to any and all of the survivor benefits 

A frozen plan provides for a suspension of benefits upon re-employment.  Plan Administrator never sent notice, and over a year has passed. 

1) Can Plan Administrator stop payments and restart them upon subsequent "second" retirement?

2) If the Plan Administrator can do so, is it required to give actuarial equivalence of benefits upon second retirement because it did not provide notice of suspension of benefits?

3) If Plan is required to give actuarial equivalence to this retiree, does it need to treat all future rehired retirees the same way, i.e., not suspend benefits or provide actuarial equivalence at subsequent retirement?

Thank you

Company A is owned 100% by one individual. Company A is purchased in a stock sale by Company B. Owner of Company A will never be an owner of Company B but will be an employee.

Purchase was effective April 1, 2017. Owner of company A turns 70.5 in 2017.

Company A terminated their plan prior to the sale.

Owner of Company A will take a RMD from Company A's plan for 2017. However, what about going forward regarding assets accrued under Company B's plan? The EOB states (I added the red lettering):

under the key employee definition, an individual is a 5% owner if he/she owns more than 5% of the company (or a related group member - see 1.d.3) below) at any time during the relevant plan year.

Will Company A be considered a related group under the control group rules? Therefore requiring RMD's for the remainder of this individuals employment?

Husband and wife divorced. A QDRO awarding wife 50% of the portion of the pension earned during their marriage was ordered and filed properly, but no Survivor benefits were included in the QDRO. Husband remarried and then died before reaching retirement age. Is there anything that can be argued so that the first wife may receive some of his pension benefits?

We have an employee who files income taxes with his spouse as married - filing separately.  The spouse claims their child as her dependent (i.e., our employee does not claim child as dependent).  A question has come up as to whether or not dependent care expenses incurred for the child are eligible for reimbursement under our dependent care assistance plan.  The employee is arguing the child could be his tax dependent and otherwise meets the definition of a qualifying child, so the expenses should be reimbursed.  Our plan document defines "qualifying individual" as a tax dependent of the participant as defined in IRC section 152 who is under the age of 13 and who is the participant's child as defined in IRC section 152 (a)(1).  I guess my question is if the child can qualify as a dependent of the participant, but is not claimed as a dependent for tax purposes, could dependent care expenses for that child be reimbursed under the plan.  Any help would be appreciated.