does incidental benefit rule apply if the plan sponsor rolls cash into profit sharing plan and purchases insurance from rollover money?

I have two companies that are a controlled group. Plan A has deferrals and profit sharing, Plan B has deferrals and match. The combined plans pass coverage testing using the ratio percentage test. They also pass the Average Benefit Test. Is there another test I should be doing?

When doing the ADP Test separately, Plan A fails and Plan B passes. IF I combine them, Plan A fails less, but a participant of B will now receive a refund. Is this acceptable to combine for adp testing even if they are not required to be tested together? I think it is, but is it fair to the employee of Plan B that will now receive a refund?

Co. A acquires Co. B in an asset acquisition in November 2015. Co. B sponsored a plan, but the plan was terminated at acquisition. Some participants did roll their balances into Co. A, but rollovers didn't actually occur until January and February of 2016.

Bob was 72 at the time of the acquisition, but still employed. He terminates in July 2016. A couple of RMD issues:

1. It is my understanding that there would not be a 2016 rmd for Bob. He did not have a balance in Co. A's plan at 12/31/15.

2. Should have Co. B's plan issued an rmd for 2015? My understanding is yes because the employer changed at Co. B's acquisition.

Thanks in advance for any guidance.

I have the IRS reference number from when it acknowledged (Form 8950) a VCP application, but have heard nothing in months since then. Does anyone know of a good phone number/person at IRS to contact to follow up on a VCP application?

sponsor underpaid RMD's to a few beneficiaries. IRS allows for a reduced fee for RMD failures but the form 14568-H says that RMD failures involving beneficiaries is not eligible for the reduced fee. I cant find this in the Rev Proc. anyone have any experience with this? my clients vcp fee would go up from 500 to 5000 and it only involves 5 or 6 beneficiaries. seems absurd.

A husband and wife want to start a cash balance plan. They each have a solo 401k plan. Can they keep their solo 401k plans along with the cash balance plan or do they need to open a different 401k plan with both as a participant?

There's 100 of them out there, where you upload a pdf and an address file and the company will mail out hardcopies of the pdf to everyone on the list.

Anyone have any recommendations?

I have a plan that was recordkept at Nationwide. The employer had an arrangement between Nationwide and Monumental Life where pre-tax dollars were used to pay for life insurance premiums. The employer is sending us a contribution file asking us to carve out the premiums from these contributions and send it to the insurer.

Does anyone have any experience with this arrangement? Are you treating the life insurance premiums as annual deferrals under the 457(b) plan? If yes, do you have a life insurance provision in the plan document?

Hi. I am hoping someone point me in the right direction. We have an employee out on extended unpaid leave. I am told that due to the ACA, the Employer must keep the employee on our health plan indefinitely even in a situation where the employee cannot work due to his own health condition and he is on extended unpaid leave following FMLA.

Thanks.

The IRS FIRE site will be down for scheduled maintenance starting December 9, 2016 at 6 PM Eastern Standard Time through January 16, 2017

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Please tell me someone has a direct connection to some senior person at the IRS who can explain that this is beyond idiotic. 1099's are all due 1/31st and the very system needed to file said 1099's is out of commission until half way through the only month they can be filed?? Seriously?

I have a strange situation and looking for advice:

I have a salesman who has slowed down as he turned 70 on September 5, 2015.

He is still trying to make some sales, but decided on February 5, 2016 (before he even turned age 70-1/2) to take an in-service distribution and roll it to his IRA as he felt the grass was greener in the IRA. He received a commission check in January, 2016, but didn't receive another one until September, 2016 (I told you he slowed down). Not sure he'll ever make another sale.

If this is the case, I could see the IRS having the opinion that his retirement date falls in 2016 and, as a result, his RBD is 4/1/2017, making his first distribution calendar year 2016. Suddenly, that in-service distribution, which looked ok in February as he was still working, becomes a distribution that included his RMD.

I feel I need to suggest to the Trustee and the custodian platform that they split that rollover distribution into two 1099-R's, one for the RMD amount (taxable) and one for a non-taxable rollover. We then need to advise the participant that he should request a distribution of excess contributions from the IRA for the RMD amount on or before the due date of his 2016 tax return.

Agree???

Thanks in advance.

James

I have an owner that has a 12,000 AB at age 55 which is about near what the 415 dollar limit would be reduced to age 55. Plan wants to terminate and if I value the 12,000 as deferred to NRA (62), the plan is over-funded. What's to stop us form amending the plan to provide for an unreduced early at age 55? Applicable to all participants.

Pension plan erroneously made a lump sum distribution to an individual who had never been a participant in the plan or worked for the employer. Do the ECPRS correction procedures for an overpayment apply here or is there something more specific to this situation? The ECPRS definition of overpayment refers to a payment to a "participant or beneficiary" - and this individual was neither.

Here's the story - former employee allegedly provides a name and SSN that do not belong to him he was hired. Employee Bill participates in the pension plan under the false name and SSN for a few years but is eventually terminated for providing false employment documents (apx. 2008).

In 2016, the individual whose name and SSN were used by the former employee applies for social security and receives a 'Potential Private Pension Benefit Notice' regarding the pension benefit under his name and SSN. He contacts the employer (whom he never worked for), files a claim, and is paid a lump sum distribution of apx. $7,000. He provided a different DOB than what was on file for the former employee but that was not caught at the time. Someone how he learns there is a 401k benefit under his name/SSN as well and while trying to get that paid to him, he discloses to the employer that he had never worked for the employer and was allegedly a victim of identity theft by a cousin. Recipient is refusing to pay the $7,000 distribution back to the plan.

I'm clear on the rights of the real former employee to the benefits he earned while working, despite the incorrect SSN, and that he will have to provide a valid SSN or TIN to receive distributions from the qualified plans. But how does the employer correct the $7,000 distribution to other guy? Do the ECPRS overpayment procedures apply? Does the employer have any avenues available for recoupment that they would not have if this was an overpayment to an actual participant (i.e. does this guy have rights under ERISA here)?

The employer made the error here, but the recipient also made a claim for benefits from a plan he knows he never participated in. He has acknowledged that the former employee participated in the plan and "earned" the pension benefit using the recipient's SSN.

Any thoughts would be appreciated!

Does a notice have to be provided to participants in a non-qualified individual account plan for which a top hat filing has been made? No per 2520.104-23? Thanks in advance for any guidance!

Do assets converted from prior providers during the reporting period get reported at their 'carrying values' as 'beginning of year' assets in Part 1 of Schedule H? Or are they excluded as are current year contributions?

Can someone point me to the regulations applicable to the merger of two multi-employer plans. Specifically, what happens to the credit balances and amortization bases of the plans?

If plan A mergers into plan B, does plan A's credit balance just go away, or do we need to adjust the credit balance in plan B to consider it?

Is there still the understanding that there is no Federal income tax withholding simply do to the vesting and consequent income inclusion of deferred compensation under Section 457(f) where there is nothing being paid until later? Is there a more recent statement from the IRS on this than the 1999 TAM, either another TAM or PLR or even in a speech?

We have a plan that allows certain employees to purchase equity interests in our company. Is that an ERISA plan?

Would any of the following features make it an ERISA plan:

1. Right of first refusal.
2. Employee required to sell stock back to company upon separation from service.
3. Employee required to sell stock back to company upon death.

Thanks in advance for any help!

Small CPA firm with a safe harbor 401-k Plan where 1 of the CPA's and some of the staff terminated prior to end of year and formed a new firm. They will not receive Profit Sharing contributions since the plan requires employment on last day of year.

Can they start a new safe harbor plan in December to make up for the lost profit sharing and to maximize salary deferrals or does it have to be a January 1 date for safe harbor 401-k?

A small closely held Corp put in a SERP 10 yrs ago. It's a defined benefit type where the retirement benefit is a fixed amount. Now the Exec is retiring.

The CPA had additional Social Security tax withheld from the Execs salary every year since inception, but I'm not sure how he arrived at the amount. In research, I'm reading it should have been charged on a discount of what the ultimate benefit would be. Is that correct?

I have read that since this compensation is considered to have been earned during the Execs working years, the Exec can defer some of the retirement benefit into the co. 401k, if the 401k permits it. Is that correct?

Lastly, IRS Pub 957 suggests the retirement income is reported on a W-2 in boxes 1 and 11. and no Social Security or medicare tax is withheld. Is that correct?

Thanks so much for any input

Ray