We have an existing 401(k) safe harbor plan with one year of service, age 21, quarterly entry dates.  Plan Sponsor now wants to exclude certain employees from the Plan (a division of the Plan Sponsor) that would make current participants ineligible for the Plan.  The Plan will easily pass coverage.  

I am sure that this can be done but have a colleague that says these employees will continue to be eligible even if now in an excluded class.

Any thoughts greatly appreciated.

Participant held life insurance within a retirement plan.  The rep. on the policies advised the participant that the policies should be transferred to the participant and the participant followed that advise.  Fortunately participant is over 59 1/2 and had a distributable event.  However, the participant was not aware that the transfer constituted a taxable distribution.  We are still within 60 days of the transfer.  if the participant has sufficient outside assets can he contribute an amount to an IRA equal to the cash value less the basis and treat it as an indirect rollover?

Thanks for any guidance. 

Not sure if this is the correct forum - question is, (for a governmental entity, if it matters) - can the entity set up an HRA for former employees that also covers expenses for spouses and dependents?

I lack expertise in this area (putting it kindly) and although it seems very clear that Retiree Only HRA's are perfectly allowable, I'm not finding hard guidance that permits coverage for spouses and dependents. Or perhaps the guidance is the other way around - coverage for spouse and dependents allowed unless otherwise prohibited, and it ain't otherwise prohibited.

1. Anyone know the answer?

2. Any citations/sources you can point to? Thanks for any assistance!

Hello,

I have the following books I am looking to get rid of. They are old editions but they were not cheap. Can anyone use them?

RPF Course 1 6th edition

RPF Couse 2 6th edition

DC 1 4th edition

DC 2 5th edition

I am hoping someone can assist with this.  

I am married and have a restaurant, and I do have a few full time employees.  My husband is also self-employed but his business does not have any employees.  I have been told that he cannot have his own 401(k) as we are married and my employees would need to be covered under his plan since we are married. 

Could he establish his own SEP IRA for his own business without me having to include my restaurant employees as part of his SEP?

While I am at it, is there any way I could have a SEP without having to cover my employees.  The restaurant business is so hit and miss as it relates to employees...ugh.  But, do I even have any options as to what I can do?  I am assuming I can always do a regular IRA, but would like to try to do something more.  But, if my husband could at least have a SEP (or 401(k)...but I don't think it is possible unless my employees are covered).

Any and all comments are appreciated.  Thanks.

My helmet is on too tight.  An active participant has a $100,000 balance in the plan.  $25,000 is in voluntary after-tax with $20,000 basis.  The rest of the money is pre-tax.  Based on the plan document and regulations, the participant is only eligible to take a distribution from the voluntary after-tax source.  Can the participant rollover the $25,000 to an IRA(s) with a basis of $20,000 based on this...

Can I roll over just the after-tax amounts in my retirement plan to a Roth IRA and leave the remainder in the plan?

No, you can’t take a distribution of only the after-tax amounts and leave the rest in the plan. Any partial distribution from the plan must include some of the pretax amounts. Notice 2014-54 doesn’t change the requirement that each plan distribution must include a proportional share of the pretax and after-tax amounts in the account. To roll over all of your after-tax contributions to a Roth IRA, you could take a full distribution (all pretax and after-tax amounts), and directly roll over:

• pretax amounts to a traditional IRA or another eligible retirement plan, and
• after-tax amounts to a Roth IRA.  

Would anyone be willing to share a set of distribution paperwork for an estate, to be completed by the executor of the estate?

I don't understand this letter so I hope someone can tell me what I am missing. The new rules regarding amendmending safe harbors expressly allow you to amend for ANYTHING except the 4 expressly prohibited amendments.  Why are they asking the IRS to approve certain other amendments when there is nothing prohibiting those amendments?

http://www.asppa.org/Portals/2/PDFs/GAC/Comment Letter/final170606_Safe_Harbor_Mid_Year_CL.pdf

Participant loans give me a headache.  We have a plan with a few (3 or less) missed payments on loans that are otherwise in compliance with IRC 72(p). It is a construction company, and the Plan sponsor did not start up payroll deduction payments on time, or there was a short lay-off at the time that payments were to commence.  We are well inside of the cure period. 

We would like to reamortize the loans (rather than doubling up payments to get them current, or demanding a lump sum).

Is this really a loan refinance (meaning the loan program must permit refinancing)? Or is it just a reamortization (keeping the terms otherwise the same)?  And is something that is eligible for SCP, or does it require VCP?  I have been under the impression these types of loan errors could be self-corrected (within the cure period) . 

Curious as to both strict interpretations and "real life" if different. The following is (really, really) a hypothetical question.

Suppose you have a 125 plan, and despite a couple of mid-year tests that passed, it still ends up failing the Key Employee 25% benefit test. Let's say only one Key, and $10,000 deferred, and to pass, Key could only have deferred $9,000.

You find this out, of course, after the end of the year. So, under the regulations, is the entire $10,000 taxable to the Key, or only the $1,000 excess?

Now, if the answer is the entire $10,000 - is there a "real life" fix where if caught before end of January, the W-2 would simply show $9,000 as a contribution/deferral, and the other $1,000 would show up as normal W-2 taxable income? Or some other "real life" fix? Doesn't seem quite legit to me...

Thanks for any discussion/answers/insights!

I have recently gotten a letter in the mail on a 401k loan I defaulted on over 15 years ago. Apparently the company managing the 401k never finished foreclosing on the loan after my employment was terminated. The account is being held in escrow and has accrued some interest over this time frame.  

The income was reported on my tax return back when the company sent me the 1099 for the income derived from the original default. 

in the time frame between now and the termination of employment I did file for bankruptcy. 

My question is: Can they still foreclose on this loan after 15 plus years or can I calm the principal held in escrow on this account ?

Client first institutes a DB plan after attaining age 70-1/2. Has a 3-year cliff vesting schedule (to delay RMD's). Suppose the end of the 3rd year is 12/31/2017.

Must the first annuity payment commence by 4/1/2018, or 12/31/2018? My reading is that he has until 12/31/2018, but I can see an argument for 4/1. Particularly if taking an annual annuity payment, it is hard to see how it really matters, since he would receive it all in the 2018 tax year anyway, but that's a separate issue. The later date seems a bit easier administratively, since the vested accrued benefit as of 12/31 often isn't known until later in the following year anyway...

does anyone think or know whether the fiduciary rule includes a duty to monitor IRA service providers that might take rollovers from plan participants?  I am having a disagreement with a colleague. i say there is no duty to monitor IRA advisors who deal with participants.   

ok so the client isn't going to make any profit share for the plan year.  there are forfeitures to be reallocated.  Most vendors (even some of the largest in the 401k arena) don't have an easy mechanism for the forfeiture reallocation process.  Yes - they allow a "contribution" and then fund it with forfetiures but then it shows on the annual reports as a contribution and not as a forfeiture reallocation.  Why does this seem to be so difficult...?!  I understand that the forfeiture reallocation is a contribution of sorts, but since it isn't deductible again I would like it to show as a forfeiture reallocation and NOT as a contribution.

mostly just venting but was wondering what others thoughts are on this.

Client is a local government entity that has a FICA replacement plan, so employees who participate in the plan don't pay into Social Security OASDI or receive those benefits.  

My question is - the requirements for replacement plans are framed in terms of what the employee must receive.  Is there any requirement that a replacement plan provide spousal benefits?    

Thanks - 

Mom dies at 99.

Son inherits her IRA.

Can it be rolled to son's 401k plan?

I think...(a lot of possibilities but I can't find anything that says yes or no, explicitly.)

Thank you

An employer has over 100 participants and has a stop loss policy for it's health insurance benefit.  They received a Schedule C from the insurance carrier.  It's my understanding they don't have to complete the Schedule C if there isn't a trust because there aren't any plan assets.  Can someone please confirm?

I have a question about bottom up QNECs. Let's say the employer wants to give a 5% QNEC to his employees because of the failed ADP test. Does the employer have to give the first contribution to the lowest paid employee and then give it to 2nd lowest paid employee, etc. until the test is passed, OR is the employer permitted to give the QNEC to anyone?

Every example I've seen has the employer giving the QNEC to the lowest paid employee first, but I was wondering if that's a requirement.

Thanks.

Just musing before going in to a meeting.

Under the new DoL Fiduciary rules, wouldn't a promoter of a ROBS plan become a fiduciary under the new rules?  They are being paid a fee and recommending the client move funds from and IRA to a qualified plan for the purpose of purchasing employer stock.

I got to go.

2016 RMD missed for an owner :(.  ERISA counsel suggested reporting the income on 2016 1040.  Do you guys think a code P on the 1099-R would do the trick?  Not sure if it is 100% the right code, but man it seems like operationally the easiest thing to do...