We have a client that allowed a participant to take a distribution from the plan.  Participant is still working but is 65 so client thought they were eligible for a distribution.

In-service distributions are not allowed under the current provisions of the plan.  The document can be amended to allow in-service at normal retirement age now but this does not help the fact that a distribution occurred that was not permitted under the terms of the AA.  Can we do a retro-active amendment to correct this operational failure?  If so, does it need to be submitted under EPCRS?

I was reading through "Part-Time Employees Revisited"

https://www.irs.gov/pub/irs-tege/qab_021406.pdf

The include Seasonal Employees along with part-timers, but they make it (I think) pretty clear that what they don't like is when part-time or seasonal employees are defined as employees who work less than X hours in a particular period.

But what if I have a group of employees who are being excluded solely because they work during the summer months exclusively without regard to how many hours a week they work.

I know I can exclude them; the real question is does the document (and operations) need to make them eligible if they hit 1,000 hours in 12 months (i.e. if they meet max eligibility under 410a)?

Employer terminating 401K 6/30/2017, no employee contributions after that date.

Can safe harbor for 2016 be made by 9/15, which is after the termination date w/o jeopardizing the plan term?

I was divorced in 2003. Apparently in the divorce settlement I agreed to pay my ex wife 50% of both my retirement plan and disability plan. I don't remember agreeing to the disability part but I wasn't in a very good frame of mind at the time.

She filed a QDRO in 2012 to have 50% my retirement sent directly to her (which I had begun drawing). Since that time the disability plan has been removed from the retirement plan specifically named in my divorce settlement and the QDRO. Since the disability plan is now different, is that QDRO still legally binding? I'm about to file for disability and found out the disability plan shows the QDRO as binding in the new disability plan.

Here is what the new plan says about older QDRO's established in the retirement plan:

"Qualified domestic relations orders received by the Retirement Plan
prior to January 1, 2015 that provide disability benefits to an alternate
payee under the Retirement Plan will be deemed to apply to disability
benefits paid under this Plan on and after January 1, 2015, to the
extent those benefits are now paid out of this Plan"

Here is what my ex wife's QDRO says about disability payments:

"The Alternate Payee (my ex wife) may only receive disability benefits when and if the Player becomes eligible to receive such disability benefits under the Retirement Plan"

I was never qualified or receiving disability under the old Retirement Plan, and therefore the alternate payee was not provided disability benefits. I'm waiting to hear back from my disability plan whether they mean alternate payees who were actually receiving disability benefits apply to benefits paid under the new plan, or if the alternate payee was in my ex's situation where she never received benefits because I was never qualified to receive benefits.

It will hurt if she gets half of my disability. She has remarried and owns two homes and lives in a great neighborhood and I have struggled for years because of my disabilites and would have been homeless if not for friends and family letting me stay with them. I was finally approved for social security disability just over a year ago and am guaranteed approval from my company plan because of that.

If anybody has any thoughts or suggestions I'd appreciate feedback?

the factor released for April was 244.524

the average needed to increase most of the limits is 244.5 so unless the consumer price index drops over the summer there will be increases in the comp limit and 415 limits

I suppose the crew in Washington could rewrite the regs to prevent this as well.

The Employer incorrectly reported $5,000 too much deferral for a HCE. We are removing the $5,000 plus the interest that was accumulated to make his account accurate. 

The over contribution we are using to reduce the next contribution that the Employer makes.

What options do we have for the interest.  (It's several hundred dollars)?

I had worked for a CPA firm for 17 years before taking a job in a different city.  The CPA firm recently terminated their pension plan and sent me a letter advising me of what my benefit would be and giving me the option to roll it over into or take a lump sum.  The amount was significantly smaller than I expected.  Upon talking to the actuary of the plan I was informed that my employer had frozen the pension nine years ago.  I have spoken to several employees and not one of them remembers being informed of the plan being frozen.  Does anyone know what actions we can take?

Company A just bought a bankrupt company's assets.  A new company is created out of the bankrupt assets: Company B.  Company B is a single member LLC owned by Company A.

The employer is wanting to keep Company A 401(k) separate from Company B 401(k) plan.  Easy enough to set up the new Company B 401(k) and move forward.

Both plans are going to be setup with same plan year ends and the same plan provisions.  The potential difference is profit sharing contributions per plan.  Plan A might be 5%, Plan B might be 0 or 2%, or whatever based on their own profitability.

If I understand this correctly, as long as each plan satisfies coverage (410b), each plan can do whatever they want for profit sharing.  Here are some numbers....

Company A:  Non excludeables NHCE 468, Benefiting NHC 426, Non excludable HCE 27 Benefiting HCE 25

Company B: Non excludeables NHCE 90, Benefiting NHC 80, Non excludable HCE 2 Benefiting HCE 2

Company A coverage: NHCE 426 of 558 equals 76.34, HCE 25 of 29 equals 86.21,  88.56% Passes

Company B coverage: NHCE 80 of 558 equals 14.34, HCE 2 of 29 equals 6.90.  207.89% Passes

1.  Is my math correct?

2.  If so, test separately, profit share each company separately.

Am I missing anything obvious?

An employer wants to pass along to the employees their monthly admin fee for administering an FSA.  For example, $150 annual fee per plan and $4 monthly fee per employee.  Can employees pay this fee on a pre-tax basis through premium conversion plan?  And if so, does this amount count toward any maximum pre-tax limit?

Can a money purchase pension plan be merged into a 403(b) Plan?

Firm A bought Firm B as a stock purchase.  Both had their own 401(k) Plan before the "corporate merger". It was determined that the Firm B's 401(k) Plan would be merged into the Firm A's 401(k).

The merger of plans was done in 2 stages within 2016.  First, new money (deferrals) were directed to Plan A mid-year.  Old monies (existing balances) were transferred over to Plan A before the close of that plan year Everything went smoothly except for one issue (of course).

Firm B had promised its employees matching on their deferrals for the entire year.  It was expected that deferrals under Plan B would be matched under Plan B prior to the move to Plan A.  I note this is part of the reason for "two stages".  Clean up all aspects of Plan B, including matching and testing on Plan B contributions, and then merge into Plan.  This did not happen as the match on deferrals made under Plan B was not made.

I believe one solution is that the match be done under Plan B as a receivable at plan year end, which is immediately transferred into Plan A accounts in accordance with the merger.  Of course, this raises the potential for another 5500 Filing (large plan), as well as issues that might pertain to "merger documents". Comments on this solution are appreciated.

Another solution I see would be to have Plan A match deferrals of Plan B by including them in the definition of "Matched Employee Contribution".  We would also need to make several other adjustments, such as revising the definition of Compensation and Hours of Service to include values attributable to service to Firm B. Since Firm B was owned by Firm A for the entire year, this is technically acceptable for Compensation and Hours.  My problem is can deferrals under one plan be matched under another? Timing is also a concern for the amendments. Comments on these issues are most greatly appreciated.

As always, I appreciate all comments.  Thank You!

This question is really academic at this point, but could apply to a future situation.

Suppose you have corporation A - a couple of doctors, or dentists, or lawyers, or whatever. They decide to go their separate ways. Corporation A will remain intact, no changes to the plan, etc.

Mr. B will form new corporation B. Some of the employees of corporation A will come over to work for him - or of course they can quit. He'll just establish a new plan. (it could be handled as a spinoff, but for  reasons not pertinent to this discussion, probably won't, and not worth getting into!)

I don't think there's any solid argument that these terminations from corporation A are "voluntary" so it seems to me that if they weren't already 100% vested, they would need to be. Any other opinions? Also, since a new employer is being established, seems like they are entitled to distributions if they choose, (cash, rollover to IRA or new plan, etc.)

Are people processing the PBGC filings on the PBGC website or using software?  We are considering using FT for this - we currently do it on the PBGC website.

Just curious if there are features about it that make it worth the additional investment (aside from the obvious, which is the pre-filling of all of the demographic data based on the 5500, that one I know about).

Will it show filing statuses, etc?

John Doe and his spouse own 100% of corporation A. No employees. They have a qualified plan.

John Doe and his spouse, together, own 40% of Corporation B. No other attributed ownership in corporation B. Corporation B sponsors a qualified plan. There is no CG/ASG. John Doe's brother own the majority of the remaining 60% of corporation B.

John Doe wants his PLAN, Plan A, to purchase some of the stock owned by his BROTHER in corporation B. My initial reaction was that it is a PT, but now I'm not so sure. Any opinions?

just received the following:

Dear ftwilliam.com Customer:

We are pleased to announce the release of the new pre-approved volume submitter 403(b) documents.

Got a quick one -

Doctor has had a DB plan for his one-man consulting business since 1/1/2008, and he earns well over any limits to worry about.

So 2017 is going to be his tenth year of participation (nominally defined as 1000 hours), and so once he gets his full 415 limit, the idea is to terminate and have him roll over a lump sum.

The 415 regulations define a year of participation as calculated to fractions of a year.  But they also say the year is credited if the hours are worked.

Should I be interpreting that to say it's a full tenth year of participation as of the moment he gets to 1000 hours?  Or does it mean he has to actually have the twelve months in the bank?  He might get to 1000 hours in June, but if we terminate the plan right at that point, I don't want the surprise that he would only get 9.5/10ths of the $215,000 limit. 

He'd obviously rather go for the full limit, and so if it's legitimate to count 2017 as a full year 10 before the end of the year, he could terminate and distribute before December 31, thus avoiding any 2018 plan year with its additional costs.

Thanks...

--Brian Gordon

Is there any way to retrieve more than 10 digits stored in my BA II plus calculator?

We have a plan that will be terminating and has about 10 terminated participants with remaining balances.  A few of these have been gone so long their unvested money has already been forfeited.

What happens to these participants upon PLAN termination?  Do they become fully vested and get their forfeitures back in their accounts?  Recognize that these forfeitures have already been allocated to other participants.

Have a new 401(k) plan and am doing enrollments.  This question came up twice: Both employee are separated from spouse (not a legal separation), they have not spoken in 4 years, one only knows the general where abouts, the other knows the spouse is in prison (domestic violence, etc).  Neither wants to contact with ex.

Suggestions on how to name someone else as primary beneficiary?

I have a scenario I found rather odd.  I have a small business that wishes to cover insurance premiums for one NHCE, excluding all others and all HCEs.  I feel as though I could get away with an HRA not integrated with group insurance/QSEHRA, but I'm just not sure if excluding everyone else will qualify it as a "one employee" plan.  The sponsor doesn't want the employee to be taxed, hence looking into a 105 plan.

Thanks for any help in advance!