Potential client started business in June 2016 as a sole proprietor, wants to set up 401K/PSP by 12/31

He was told by another TPA firm if he establishes the plan 12/1/16 (I assume they are speaking of a December 1, 2016 effective date - which makes no sense), that he could only base his 25% on net schedule C from December 1- December 31.

Why would not effective date of the plan not be 1/1/2016 if the intent was to make the full 25 PSP on his self employed income?

Then again, if the full Schedule c was from June - December, why would the prospect be told that he could only do one month?

Unless, the broker did not explain the situation correctly.

Has anyone run across as good checklist of information or data request form or something like that to gather the information to review for affiliated service group status? I always feel like I'm missing something, and they tend to become these long, rambling conversations... which are great for building a relationship with the client, but not so great for making sure I get everything I need. Thanks.

Hi, I have a 403(b) plan that started making employer contributions in 2001. Never had a plan document, never filed 5500s. One participant for fifteen years, then two participants for a couple of years. I can deal with document issue. My question is, do I have to start filing 5500s back to 2001? I believe the answer is yes. Neither vendor nor participant can provide statements for the account prior to 2008. Would you file knowing what you know, i.e. the amount of contributions, pro rate earnings?

I'll be filing under the DFVC program.

Any help/ suggestions would be greatly appreciated.

Thanks,

somehow a thread under that particular forum took a side turn to

"if an infinite number of monkeys were sat at an infinite number of typewriters"

and whether or not all the works of Shakespeare and other such things would be produced.as far as I know this was actually tested in theory once (and only once because the results were horrific)

after many days the only thing that was produced was

The Internal Revenue Code.

May they never try that experiment again.

We were informed that a QDRO would be forthcoming on a Participant's account, so we put a lock on the account. Now the Participant is due to receive a required minimum distribution. Should we make the RMD even though the account is currently locked?

Is rev proc 2013-12 the latest EPCRS?

Also, I think i remember that it isn't the end of the world to give out a sH notice 10 days before the end of the year. Does anyone know where i read that?

We have an employer who wants to pool fund an HRA for select services, i.e., they are putting in $20,000 for their employees to pay for seeing a nurse practitioner on a first-come, first serve basis. If the $20,000 gets used up by June and some employees have not taken advantage of it then they would not receive a reimbursement for seeing a nurse practitioner later in the year. It is available to all employees. Has anyone seen this kind of arrangement before?

I think there would be some nondiscrimination issues if many HCEs used a lot of the benefits early, but I can't determine if this runs afoul of those rules.

I'm trying to improve a prospect check spreadsheet by adding DB/DC Gateway test check. But my if statement multiple conditions is not working for me. please help.

If the plan has only HCEs or NHCEs - "NO REQUIRED GT" as in the first if clause

If the plan is only DC then GT can be satisfied if all eligible ee receive at least 5% as in the 2nd if clause

Otherwise, it will perform the GT check for DB/DC combo plan (given in the below table) as in the last five if clauses.

HCE Gateway limit 1/3 to 5% 15-25% 6% 25-30% 7% 30-35% 7.50% >35%

=IF(OR(A1=0,B1=0,C1=0),"NO REQUIRED GT",

IF(AND('Table'!A2=2,U22>=0.05),"GT PASSES",

IF(AND(U22>=0.075,'Table'!A2=1),"GT PASSES",

IF(AND(T21>30,T21<=35,U22>=0.07, 'Table'!A2=1),"GT PASSES",

IF(AND(T21>25,T21<=30,U22>=0.06, 'Table'!A2=1),"GT PASSES",

IF(AND(T21>15,T21<=25,U22>=0.05, 'Table'!A2=1),"GT PASSES",

IF(AND(T21<15,U22>=T21/3),"GT PASSES",

"GT FAILED")))))))

What code is used for a Post Tax Distribution basis that is being rolled to a Roth IRA?

Thanks

I am very excited about an upgrade to the software that runs these message boards, which will be implemented over the weekend of December 31 to January 1, and will be fully functional by Monday, January 2.

In part the upgrade is driven by the fact that the current version of the software has reached the end of its technical support life from the vendor, excerpt for security patches. Even those patches are scheduled to end in about three months.

The new version of the software was first released in April of last year and has undergone a considerable number of tweaks, so I am now confident that it is fully functional and smooth.

The primary benefit under the new version is a much more modern interface, with the kind of look and feel that most people have come to expect, especially on tablets and smartphones. The buttons are larger and more carefully positioned. The "help" system has been very much improved in its language and content. The new interface feels much more intuitive and user-friendly to me.

It will be much easier to automatically follow certain content (particular topics/discussions, particular message boards), and the new version has a greatly expanded system for viewing "new" content and viewing particular kinds of activity (posts by particular members, activity in all topics you've started or contributed to, etc.).

Upon logging in, an amazing amount of information will become available merely by hovering your mouse over various links, rather than needing to click on them.

The search engine has more options available when doing an Advanced search, and seems to be faster and to provide results in a more scannable/readable format.

And it cooks a perfectly boiled egg in less than 3 minutes.

(Not.)

I wish it were possible to install the upgraded version into a beta part of benefitslink.com in order to give you the ability to easily try it out before it goes fully live on January 2, but the conversion process is basically "stand back, fasten seat belts" once the process has begun. (I have tested the conversion on a development server, though. The development server must be behind a firewall in order to prevent Google from finding the content and royally gumming things up by indexing the temporary content on the upgraded version. The conversion went through without a hitch.)

If you're comfortable with using an add-on to your browser or some other application that would let you modify the "HOSTS" file on your Windows PC so that the various links on the upgraded version running on the development server will work for you (i.e., not just the front page of the upgraded version), I'd be happy to provide you with the IP address of the development server to use in modifying your HOSTS file, and a username/password to get through a browser challenge screen on the development server. Just send me a private message using the message boards, or email me at davebaker@benefitslink.com.

We have an employee in a current USA 401k plan who has a large retirement plan account in a Mexico-based retirement plan from his previous employer (non-related to the current employer in the USA). The USA plan accepts rollovers from other plans, IRAs, etc. But since the Mexico plan is not a 401(a) type of account, I assume this could NOT be rolled over into the USA plan, is that correct? Any way he could roll it into the USA plan?

Thanks

Greetings,

Is it recommended to refrain from depositing calculated corrective contributions until after a VCP submission has been reviewed and blessed by the assigned reviewer?

On the one hand, if the IRS reviewer does not agree with the amount of the corrections, and the corrective contributions have already hit affected participants' accounts, it would make matters more difficult.

On the other hand, if the deposits are not made until after confirmation by the IRS reviewer (which could be months later), the amount of lost earnings would be for a longer period and at a greater expense to the plan sponsor.

Assuming deposits are not made until after the IRS gives its blessing on the proposed corrections, how far out is it recommended that the lost earnings be calculated to (i.e., the end period for the interest calculation)?

Thank you!

Say Employer 1 sponsors a typical NQDC account balance plan with salary deferrals and potential employer matches/contributions. A handful of executives are eligible and participate.

Employer 1 undergoes a change in control through merger into Employer 2 or by becoming a wholly owned sub of Employer 2. Employer 2 sponsors a similar NQDC account balance plan with salary deferrals and employer money.

Employer 1's plan is not terminated prior to the change in control. Employer 2 would like to terminate after the change in control (but within 12 months) and liquidate the plan balances in Employer 1's plan. The executives eligible for Employer 1's plan will then become eligible for Employer 2's plan.

The post-CIC termination regulations define the service recipient as the post-CIC employer/controlled group. They also say all plans of the post-CIC service recipient group that would be aggregated if the same person participated must also be terminated. However, the rule only applies to people actually affected by the CIC (Employer 1's employees).

Post-CIC, Employer 1's and Employer 2's plans would be aggregated if Employer 1's employees participated in Employer 2's plan.

I'm unclear on how you aggregate here: Does Employer 2's plan have to be terminated as liquidated as well?

Even if the rule only applies to people actually impacted by the CIC (all Employer 1 employees) the two plans would still be aggregated and the regulation seems to require termination of all post-CIC aggregated plans.

If that's the case, do you simply have to freeze Employer 2's plan and let it pay out over time?

Is there any guidance (official or unofficial) in terms of how many lump sum window offerings a plan sponsor can offer (and in what amount of time) before the IRS would deem the cash option a permanent plan feature?

We currently use our normal DC document and it is silent as to the specific rules regarding a one-person 401(k) plan.

We have just discovered the owner's daughter works at the business on a part time basis but has never met the 1 year of service eligibility requirement.

Does this throw the plan out of "solo-k" status, causing a 5500 filing, testing, etc.? Or because she is part-time/seasonal and never works more than 1000 hours during the plan year, is that solo-k status retained?

Thanks!

Can a Form 5300 be filed for an affiliated service group determination if filed before the revised form comes out on January 1? It is a new 401(k) plan with an unmodified preapproved volume submitter document with an effective date of 1/1/17. If it can be filed, as a new plan does it qualify for the fee exemption?

A plan has been in existence for only one year.

Prior plan doc. calls for all years of service counted for vesting purposes as well as used elapsed time method.

We want to amend it so that for vesting purposes service crediting starts from date of participation and the service counting method will be hours of service method.

My research didn't result exact answer the things I need to be careful in doing so.

Is this permissible to start counting vesting service from the date of participation (at least for those who were hired in the amendment year)?

Background:

Have owned the same business since 1993. Have filed Schedule C until 2010, and formed/taxed as S corp since 2011.

Established DB in 2013 and had 401K as well. Terminated the 401K (and rolled over to Traditional IRA) earlier 2016. The DB is the only retirement arrangement I (S-corp) have. I am the only eligible participant in the DB and have taken no w-2 income for 2015. I will continue to take no w-2 income from the business.

I understand that I could set up a SEP (I had an old one that had been terminated several years back when I opened the 401K) using a prototype plan (from a mutual fund company) with ‘less restrictive’ rules (than 1000 hours of work per year), in addition to the DB I have since 2013.

Questions:

1. Would I be considered eligible participant to the SEP even though I have no W-2 income for the business. How does this new SEP affect my DB, if any?

2. I am the only participant in the DB (due to the 1000 hours worked). Can my employee continue NOT to be eligible for DB while they may become eligible for the SEP?

3. The SEP Contribution amount is calculated based on the W-2. I (S-corp) will need to contribute for all eligible participants based on their W-2s. Since I receive no W-2 income, regardless of whether or not I am eligible for the SEP, my business (S-corp) will not contribute for me. Am I correct? Or, would my W-2 income be ignored, and the contribution will be calculated based on the entire business profit?

4. How can I research if I want to learn more about the SEP/DB for S-corp?

Is this required to provide Annual Funding Notice for a new small DB plan (less than 100 participant beginning of year) with end of year (12/31) Valuation date?

It appears to me that that there is almost nothing (zero asset & zero Funding Target as of 12/31) to report.

Any help and explanation is highly appreciated.

Company A acquired a company B in 2016. They are now part of a controlled group. Plans will not merge in 2016 or 2017.

Company/Plan A uses top paid to determine HCEs and it applies.

Company/Plan B does not.

I believe all members of the "controlled group" must have the same election. So, what do you do if they do not? If possible, should Plan B be amended by 12/31/16 to "elect" top paid?

If both plans elected top paid, for 2016 a "reasonable approach" would be to calculated the top 20% separately. For 2017, they should be done in aggregate.

For 2016, how should HCEs be determined (if plan b is not amended)? Can Company/Plan A still continue to use top paid for 2016?

Thanks!