I'm trying to search for the official IRS guidance that provides that assets must be distributed within 12 months when a plan is terminated. On the IRS website, it provides it has to be distributed as soon as administratively feasible (generally within one year), but  I need the actual Rev proc/official guidance. Any suggestions?

Thanks.

OK, I am missing something.  The new proposed regs indicate that Short-Term deferrals are not subject to 457f.  Short-term deferrals are deferrals that are paid shortly after they become vested.  Because 457f's are taxable when they vest, we always payout shortly after they become vested.

So what would be a 457f plan?  And why don't any of these articles address that question?

so now I'm back to receiving e-mails for every post I have responded. I reset things again

company A and B were part of the same controlled group and had one plan which has last day requirement.  company B splits off from A and establishes its own plan effective april 1 and mirrors all provisions.  company A does not want to fund matching contribution to those employees that went over to the Plan B because of the last day rule.  company B plan document credits prior service for vesting eligiblity and contribution allocation.  company B wants to fund the matching contribution to those employees that deferred in the controlled group plan prior the spinoff and they want to give the match for the entire year.  can they do this?   document credits service with company A for contribution allocation eligibility and vesting.

my feeling is the plan has a discretionary match so they can just say we are matching compensation deferred to all employees during the plan year or they can add specific language to that effect.

I'm reading that the IRS Rule in the Fed Register on 1/18/2017 allows plans to apply forfeitures towards  safe harbor employer contributions.  The Rule has many cross references and directly addresses QMAC's and QNEC's as now OK to be funded with forfeitures.  Has anyone analyzed?  Do you agree that safe harbor contributions can now be funded with forfeitures?

I am trying to figure out the limits of a fixed match in a safe harbor 401k plan.  I know I can contribute a fixed match up to 6% of eligible play, but can the match be something like 200% of up to 6% elective deferral (effectively end up being 12%... or even more)?

I am also a little confused by the difference between a fixed match and a discretionary match.  Our plan is owner/spouse + one part time employee.  My understanding is that the part time employee needs to get the same match as the owner/spouse.... is that correct, or is there different flexibility around different matches?

Also, attached is a spreadsheet I created for myself to help run through different scenarios.  Obviously, not all types of contributions can be used together, but I have been using this to sanity test some numbers.  Please let me know if this spreadsheet looks useful, or is completely off base.  Any feedback is much appreciated!

Thanks a bunch!

401k.xlsx

Would an obligation to continue employment for 2 years after receipt of a tuition reimbursement be considered a "reasonable condition subsequent" under Reg. 1.127-2 so that  a repayment obligation upon a termination of employment prior to the end of the 2-year period would not, on its own, cause an educational assistance plan to be discriminatory? The regulation includes the example of a 1-year continued employment requirement, but it is not clear if a longer period could also be considered reasonable. 

I need help to see if my logic is correct...

Small plan.  3 NHCE and 2 HCE.  Discretionary match and profit sharing.  Allocation suspension applies.  Last Day and 1000 hours for match and profit sharing ( 2-tiered).  Top Heavy Plan.  Participating Comp.  Semi-Entry.

One of the three NHCE terminates in 2016.  So 410b fails (m) and (a) at 66.67%.  Can't use ABT because of suspension.  So the terminated employee must benefit to pass 410b.

For Match:  the terminated employee does not defer so does not get match.  No allocation condition is going to get him a match.  I yes-override employee in Relius to get a passing (M) test.  In essence I have removed the last day allocation provision and because employee is able to defer, the employee benefits for match..... at least that is my thoughts.

Profit Sharing:  the terminated employee shares in the profit sharing after "removing" the last day allocation provision.  Employee came in 7/1/2016 so use compensation from 7/1/2016 to day of term.  I would guess if Top-Heavy allocation would be greater than profit sharing, I would put in the TH contribution amount. Profit sharing is greater in this case.

Am I missing anything in this scenario?

Of course, I tell the bosses and sales team to ask about number of employees and design plan accordingly.....

Pay Date 3/15/16.  $450.00 in deferrals for a few people.  Deposited at record keeper's unallocated account on 3/21.  So, the funds hit the trust within the safe harbor time limit.  However, the money is STILL in the unallocated account.  Do I have a "late deposit"?  If not, is there any sort of correction other than allocating it, plus earnings to the proper accounts?  What if there was a loss in the account?

I am preparing a determination letter request for a defined benefit plan restatement under the third (and last round) of Cycle A.  The IRS website on Employee Plans states that such plans that have risk transfer language need to disclose such language, the location of the language in the Plan document and certain other information.  In this case, the client adopted a lump sum window in 2016 for term vesteds only, so that the Notice 2015-49 restriction and arguably the need to make a specific disclosure in the dl submission would not be required.  I am still inclined to do the disclosure only in hopes of getting a favorable caveat on the point in the ultimate determination letter.  What are other folks doing for these types of windows?

Employer did a buyout of supplemental life insurance policies for a handful of executives. Policies were surrendered and executives paid the cash value. Question is whether this buyout amount is included as compensation for 401(k) purposes.

The plan defines compensation as total cash compensation, including overtime pay, commissions and bonuses but excluding fringe benefits, welfare benefits, deferred compensation, reimbursement and expense allowances.  

Would the buyout amount be considered a fringe benefit, even though it was paid in cash? Any thoughts are appreciated.

We took over this calendar year plan effective 4/1/16. At that point they wanted to change the eligibility from immediate to 1 year of service. Does this change become effective on 4/1/16? If so, does that mean that anyone hired prior to that ie Jan., Feb., March '16 are eligible and anyone after that has to work 1000 hours? What about people in prior years that immediately came into the plan? Do they now have to work 1000 hours beginning 4/1/16?

Sorry if this has already been address but I'm a one person shop and I have no one to bounce things off of.

We have a 403b plan that has 2 individual annuity contracts that were grandfathered from an older arrangement. The current plan does not offer the annuities as an investment, but the company has been handling the remittance of their contributions.

The plan is converting to another rk so we want to stop this manual process. Are there any formal notification requirements other than telling the 2 participants we won't be remitting the contributions on their behalf anymore?  I can't seem to find anything on this type of situation and would love to hear people's thoughts. 

http://asppa-net.org/News/Article/ArticleID/7159/ct/ff7cdf404509366e8151d44bf327737cf11e6cd03bf5cc2d0bd4426984c92294dd479532ae0d60e6b26b456c3499bd05b4f0b98de35331b536c91c7a45121059

We can use the proposed regs immediately, right?  But what if we are funding a 2016 Safe Harbor contribution today? Can we use the forfeitures today?  I don't see why not.

We have a client with a PEO Plan (multiple employer).  A client has left them and is transferring from their PEO Plan to another PEO Plan.  The receiving (new) PEO Plan provider is requesting a copy of the Plan Adoption Agreement from the sending plan.  The question has been asked if the sending Plan is legally obligated to send the new PEO provider a copy of the AA?

Thanks in advance for any responses.

If a plan sponsor wishes to offer preventive services out of network to non-grand-fathered plans, may it impose cost-sharing (alternatively, may the PS declare that preventive services are not available at all out of network like closed network/formulary for prescription drug benefits)?? 

Plan requires a year of service -1000 hours. Entry dates are 1/1 and 7/1. Year of service reverts to plan (calendar) year.

New employee works over 1000 hours 3/1/2015 to 5/1/2016 and leaves. Is re-hired 1/5/2017.

Would have been eligible 7/1/2016 but not employed.

Less than 1000 hours in 2016.

What is the earliest this employee could be eligible assuming full time in 2017?

When a plans eligibility is Completion of 3 consecutive months of continuous service.   What does continuous service mean? 

owner's two kids work at the company on school breaks and in the summer, work less than 500 hours a year.   Would they have met the 3 consecutive months of continuous service? 

Dr. Payne owns 100% of Payne PLLC ( A )

Dr. Aichen owns 100% of Aichen PLLC (B)

Aichen Payne PLLC (C) is owned by A & B

A owns 60% of C

B owns 40% of C

Per attribution, I would say that Dr. Payne owns 60% of  C and Dr. Aichen owns 40% C.  

Dr. Payne also owns 100% of another practice and is considering his financial advisor wants to install a 401(k) plan.  The advisor has been told (supposedly by a lawyer) that because the doctors as individuals own 100% of their PLLC's which own their shares of C, they have a controlled group.

I have asked for the exact wording of the opinion, but I just don't see a CG issue here.  Am I missing something? 

Takeover plan. He actually worked 2012-2015 and didn’t formerly retire until 2015. There are a couple of other parts who are by aggregation, owners. The Plan is Non-PBGC and is about 125% AEQ overfunded. Its about 140% AFTAP/HATFA overfunded.

The 2012-2014 distributions were RMDs.

It seems legitimate that at his age in 2015 he would be given retirement paperwork[which included a lump sum option], execute same and go home.

But something nags me about this….any thoughts???