My understanding of late deposit reporting applies to employee contribution.

My client auditor thinks the late payroll by payroll matching contribution associated with the late deferral contributions deposits need also to be reported on Form 5500 Schedule H line 4a.

do late matching contributions deposit (associated with late deferrals) added to the late deferral contributions and reported on Form 5500 schedule H line 4a?

I had it burned in my mind that once someone is in a plan, they are in. I think I am slowly learning otherwise.

The situation is a safe harbor match 401(k) with immediate eligibility. If we change that to one year of service, do all of those part-timers/short-timers just cease to be participants? Is any documentation other than the amendment itself required in order to achieve that result?

(I know - it is, um, uncertain if these folks were given the opportunity to defer.)

I know this has been asked before, but could not find it (easily) on a prior thread, so...

Employer wants to have a safe harbor plan eff 1/1/17. Its 12/1/16 and the safe harbor notice is due. Or is it? Is there an exception to the 30 days before the plan year starts requirement for start up 401k SH plans? We'd like to have this effective for all of 2017, but there a some plan design questions not settled yet so we cannot have the document signed by 12/1/16.

Thanks

HATFA section 2003©(1) amended Section 436(d)(2) of the Code to provide that if an employer sponsoring a defined benefit plan is in bankruptcy, no prohibited payment may be made unless the plan's actuary certifies that the AFTAP of the Plan is not less than 100%. For this purpose, the determination is to be made without regard to the amendment to extend the minimum and maximum percentages of the segment rate to 90% and 110% from merely 2012 to 2012 through and including 2017 (a subsequent amendment extended the application of such percentages through to 2020).

In working on a sale of the employer, the lawyer for the buyer suggested that the plan has to be amended prior to closing to provide for such an amendment. The proposed amendment seems to be merely parroting the statutory change made by HATFA and not adding anything to facilitate the implementation of such change.

I looked further into this. While IRS Notice 2015-84, which contains the 2015 cumulative list, references certain changes to Code Section 436, there is no direct reference in the Cumulative List to the HATFA changes, other than a cross-reference to a 2014 notice dealing with the HATFA changes. Since the proposed amendment appears to be merely parroting the statutory change, I would conclude that such an amendment would not be required since it would already apply by statutory operation.

Any thoughts either way on this?

I am considering taking over administration for a plan into which one of the doctors rolled his nonqualified IRA balance in a prior year. Is a rollover from nonqualified (not 457) accounts permissible in any 401(k) Plan (or any qualified plan)? I believe the answer is no, in which case, the next question would be - what to do about it? I don't want to recordkeep these assets, so should I just suggest the doctor roll the money back out as soon as possible?

Thanks!

Hi, I'm hoping someone is able to confirm or deny what I've been told regarding limited purpose FSAs.

My husband and I work for different companies. We are both covered by an HDHP with HSA through his company.

I wanted to open a Limited Purpose FSA for each of us for next year. I couldn't open one through my company because I have to be enrolled in their medical plan. We were able to open one for him through his company, but we could only contribute for him (max of $2600). I was told he couldn't contribute for me because I needed my own account (by law).

Who is in the wrong here? Should my company allow anyone to contribute to a LPFSA or should his company allow him to contribute for me or is this just a no-win situation?

To add to the confusion, assuming I enrolled in my company's plan, they said they allow the employee to contribute for both the employee and spouse.

Plan year end was 12/31/15. 5500 has not yet been filed. What is the best way to proceed at this point? Electronically file the return and wait to be contacted/fined? Or use the delinquent filer program? No 5558 was filed, so $25 per day penalty is already in the $3000 range.

I am preparing for a conversation with a DOL investigator and am looking for thoughts. Plan receives the DOL late deposit letter discussed in a thread a few weeks ago. The letter states we noticed you have late deposits..... you can file via VFCP..... go this class in your area.....

The contributions in question were all deposited within 7 business days. The company who prepared the 5500 shows them as late. The plan is a small plan filer with a beginning participant count of 115.

Here is the question. Federal Register Vol. 75, published January 14, 2010 says the 7 day rule can only be used for plans with less than 100 participants. I could not find any reference to the 80/120 rule in that register. The EOB also says the rule can only be used for plans with less than 100 participants. I assume the 80/120 rule cannot be used or the F.R. would have said so. I always thought of this as a small plan rule, but I think I am wrong??

Thoughts?

Thank you

If a non-profit employer sponsors both a 403b plan and a 401k plan, does the 415 limit apply to each plan separately? That is can a participant actually receive $106,000 between the two plans (2016)??

And taking it one step further, would the participant, if over 50 and the plan allows, be eligible for the catchup contribution in each plan or is the catch up part of 402g limit?

Thanks.

I had a co-worker bring me this question, and the say she worded it made me reconsider what I thought I knew...

For plans that use cross testing, each deposit is supposed to pass testing. We generally get past that by telling the client to make level deposits during the year and then they do the profit sharing after the end of the year. In her example, a plan does just the 3% safe harbor all year long for all participants, and then after the end of the year, they put in 6% for the owners so it passes gateway, 401(a)(4) passes on an annual basis, and we're all happy.

Except... do we have to test that last deposit separately? Which would fail, of course, since it is just 6% of compensation for the owners as profit sharing and nothing for the NHCEs. That can't be right, can it?

I am working on a terminating DB plan. The plan is vague when it comes to age to 417(e) purposes. From what I've read, it appears that, if a certain age methodology was used for calculating lump sums (such as years and months) while the plan was active, then changing it to anything else to pay termination lump sums would be a 411(d)6 violation. Would you agree? Is there an argument to the contrary?

Thanks!!

Solo 401k Business Owner owns 100% of his business and has no employees. He's been maxing out his SEP for years. Now, he acquires the assets of another business and as part of the transaction agrees to sponsor their 401k Plan.

I am resigned to the fact that 414a requires that the new owner must recognize all service with the acquired business because it adopted their plan. Based on the wording in 414a that requirement is not limited to just the acquired plan, and also clearly applies to SEPs.

So the question is, are there any 410b6c like provisions in a SEP that would allow me to exclude ALL of the acquired employees for a period of time?

Assume they used the max 3 year eligibility period.

I have the opportunity to start my own TPA firm and I really need some help.

I have been a pension admin for some time now and have a firm grasp of the administration side. I have been offered an opportunity to join a CPA firm and partner with them to start a TPA firm. I have done the grind and put together all the paperwork for new clients, takeover plans, safe harbor notices, etc... I have ASC coming and installing their programs and I will accompany that with Pension Pro software. So I have almost everything lined up to move forward. My question is:

#1 - Do I have to have certain credentials to be able to start my own TPA firm?

I have one more test to get my APA designation, but is there something that would stop me from being able to open my own firm?

#2 - Besides all the proper paperwork and setting up the software, is there something i could be missing that would be a road block or set back?

#3 - What advice can you give me that would help me avoid pitfalls or help me not miss something while setting up the new firm.

#4 - Would someone be willing to have a conference call with me and go over the steps they went through to start their own firm?

In a nut shell, I just need some guidance so I don't have a surprise pop up that would not allow me to open the new firm. I would really appreciate all the help i can get to start off on the right foot.

Thanks!!

I have an employer who has a 401(k)PS and DB plan. There is only one person in the plans- the owner. They are currently maxing out the 401(k) deferrals, doing 6% of compensation in profit sharing (combined deductibility limit) , and 5% of average annual comp per years of service in the DB. The owner takes Schedule C compensation.

The owner wants to make voluntary after tax contributions to the 401(k) PS plan up to the max limit. I believe they can make these- http://www.nytimes.com/2015/09/23/your-money/401ks-and-similar-plans/irs-ruling-makes-after-tax-contributions-more-attractive.html?_r=0

The issue is whether these after tax voluntary contributions count toward the PS deductibility limit or not. I would assume no, since any employee in a PS plan can do this with their own contributions.

Also do the voluntary after tax contributions have to come out of her Schedule C compensation like the DB and PS costs do? Or are they counted like deferrals and not taken out?

Sole prop terminated DB plan in 2015. In 2016 he wants to start another plan in a 51% / 49% partnership. Same business. Prior plan had a 10% formula but comp wasn't maxed out. I think his 415 limit should be offset by prior plan benefits based on my understanding of "who's the employer." even though he owns less than 80%. Am I off there?

If I'm not, I think I'm OK to count years of service for the 415b1B limit but can I count years of participation for 415b1A? I'd like to not count it as a predecessor employer and start YOP and 415 all over again. However, if I have to offset by prior plan benefits, shouldn't I then get to use years of participation? It seems I'm in a catch-22. If I can't then there is no benefit accrual for many years...which seems outside the spirit of this reg so I must have something wrong.

Company A buys 100% of the ASSETS of Company B on 10/1/2016. Owner of Company A is the sole employee of Company A and has 10 years of service.

Company A assumed sponsorship of Company B's 401k Plan. But now the Owner of Company A wants to maximize his contributions for 2016 and 2017 without giving a contribution to the acquired employees.

Can he establish a new Money Purchase Plan with a year of service so he is the only eligible employee for 2016 and 2017, and then freeze the Plan 1/1/18 when the other employees would be eligible. Perhaps terminate "a few years" after that to satisfy permanency.

Look forward to hearing thoughts.

We have four separate 401(k) plans from various acquisitions that all have different matches and non-electives which we cannot harmonize due to cost. However, the investment options in each plan are identical. We are debating creating a master trust to hopefully streamline some of the governance and admin fees.

However, none of us have seen master trusts in DC world very often and are wondering if this is a viable option.

Thanks.

I have a client that owns life insurance . Client owns an S corp and he is 100% shareholder. He wants to make the corporation and his children beneficiaries of the policy.
The corporation will be paying for the premiums - Question: Can the corporation deduct the premiums? and What is the tax consequences if the shareholder dies?

Thank you

I have a plan with automatic enrollment notice - it only effects the newly 1/1/17 eligible employees. No changes are made to current employees with an election on file. Does the plan still have to send the notice to everyone? Or just those newly eligible?

Profit Sharing Plan (no 401k feature) by its terms excludes the three shareholders/HCEs. There are other HCEs eligible. In performing basic rate group testing under the general 401(a)(4) test in the regulations, can you count the three excluded HCEs in the rate group analysis?