I have a plan where the plan has post tax Pre-84 employee contributions.

If a participant elects to receive a refund of the money we calculate a portion that will be nontaxable as part of the refund (using the IRS exclusion Ration) and the remaining nontaxable portion is captured in the residual annuity payments.

My question is whether or not it is allowable to have the non-taxable portion be only part of the refund or completely taken care of as part of the residual annuity. We are trying to simplify administration of the taxable payments and coding of a benefit system.

Profit sharing plan is terminated as of 10/1/2016. All plan participants received their distribution except one. His account balance is $20,000.

The participant refuses to sign distribution forms or receive distribution because he doesn't want any assets in his name. He can not be reasoned with.

The plan sponsor wants to close out the plan by 12/31/2016 and file a final return.

Is there any way to resolve this situation?

I have a plan that fails 414(s). They are a safe harbor match plan. (QACA, 100% of first 1% comp and 50% on all other deferrals up to 100% of pay)

Plan excludes bonus for allocation purposes, plan allows people to defer from bonus.

Thing is, if I include bonus, the employees' deferral rate goes DOWN, therefore DECREASING the match.

Should I just let it go?

Also, for the PS. Can I allocate it excluding the bonus (it's a pro-rata allocation) and then TEST it using full comp? (It's about a 7% PS, so I think I'd be ok with gateway.)

while it is the EZ, I would expect the same for SF and 5500

IRS Compliance Questions.
The IRS has decided not to require plan sponsors to
enter the preparer’s information at the bottom of the
second page of Form 5500-EZ for the 2016 plan year and
plan sponsors should skip these questions when
completing the form.
The IRS has decided not to require plan sponsors to
complete questions on lines 4a through 4d, 13a, 13b, 14,
and 15 for the 2016 plan year and plan sponsors should
skip these questions when completing the form.
The IRS expects that the above questions will not be
included in the 2017 Form 5500-EZ.

so maybe we will never answer those questions! in fact, the verbiage seems to say they won't even be on the form.

Is the 15-year catch-up included in 415 annual aditions? Thanks.

I have a calendar year 401(k) plan that I do administration for. Each year the accountant is very slow in getting me data to do the prior year's admin. For 2015, he didn't get me the data I needed until the first week in September, 2016. I got everything completed and submitted prior to the time the extension ran out. This plan has commingled money. Therefore, the last account balances that I have are as of December 31, 2015. I just had a request for a plan distribution from a prior plan participant. Given that we are halfway through November, I feel awkward paying out a balance that's almost 10 1/2 months old. If the plan has had gains during 2016, the participant won't share in them. Alternatively, if the plan had losses, the Participant is getting more than he deserves, What is the standard practice in a situation like this.

I set up a single Participant Plan. Everything fine for a year or two. Then guy stopped responding, paying bill and providing information.

He dies this year.

I am given 8 years of statements for intervening period.

I reconcile the account and find distributions (Loans? Doesn't really matter, no payments made) in 2010, 2012, 2013, 2014, 2015 & 2016. (Total is $103,000)

Beneficiaries want the $5,000 still in the plan.

If reporting is to be done correctly would I issued 1099s for 2010, 2012 etc requiring revised tax returns for the years listed?

Thanks for any thoughts.

We have a church that is not controlling over a school (of the same name and denomination) and the church's ministers teach in the school. The school wants to allow the ministers to contribute to the school's 403(b) plan and allow them to designate distributions as ministerial housing allowance. If the ministers' work qualifies as ministerial work for the school, can the school (and not the church) allow ministerial housing allowance designation or must the allowance come out of a church plan only?

Calendar Year Plan.

2016 AFTAP of 79% has been certified

Credit Balance of $30,000 not enough to wait to get to 80%

At current time, can employer voluntarily waive the credit balance and make a IRC 436 contribution to remove partial benefit restrictions brought on by 79% AFTAP.

Thanks for all responses.

Unlike an elective deferral under 402(g) where a partner in a partnership must make the election no later than the last day of the plan year, what is the timing requirement for an after-tax election?

Can a partner, in November 2016, write a check and say that it is an after-tax contribution for 2015, assuming no written after-tax election was in place by December 31, 2015?

I am working with an new administrator on moving plan assets and the blackout notice they provided to the affected participants does not specifically use the word "blackout". Rather, it uses the language "No Transaction Period" interchanged where the word "blackout" would be generally used. The notice contains all the other necessary language and dates, but I've just never seen a notice that doesn't use the word "blackout" to describe the period.

Is this allowed under IRS & DOL regulations?

Thanks

Hi,

Does every plan have to offer automatic IRA's for distributions between $1,000 and $5,000? That is, could a plan state that anyone with a balance under $5,000 distribute the balance in cash after a participant has been notified but has not responded after 30 days?

Thank you!

We are looking at our hardship withdrawal form and want to had a paragraph. We have the paragraph about stopping deferrals for 6 months.

We want to had a paragraph to put responsibility to restart on the participant. We are discussing how to word this for plans with and without automatic enrollment and with and without automatic escalation.

Does any one have any suggestions?

What other problems have been caused by this situation or solutions you have tried?

I've managed to avoid dealing with ACA until now, so this is my first real venture into the weeds. I'm trying to determine whether an employer can require an employee to prove that a stepchild lives with him or her in order to cover the stepchild as a dependent on the employer's health plan.

As I understand, under Section 2714 of the PHSA, if an employer allows employees to cover their stepchildren under the employer's health plan, the employer cannot impose any restrictions on coverage of the stepchild (i.e., residency with the employee) as long as the stepchild is under age 26.

Under the proposed Code Section 4980H regs, stepchildren were considered dependents, but under the final 4980H regs, stepchildren are excluded from the definition of dependent. So, there doesn't appear to be a violation of Code Section 4980H if an employer doesn't offer coverage to an employee's stepchildren in a manner that satisfies 4980H.

So, if an employer were to allow employees to cover their stepchildren, but only if the stepchildren live with the employees, what would be the consequence? It appears that it would be a violation of PHSA Section 2714, but not Code Section 4980H. Is that correct? Could violating PHSA Section 2714 on this point somehow cause a violation of Code Section 4980H, even though stepchildren are not considered dependents for purposes of 4980H? Is there a penalty for violating PHSA Section 2714?

I have a multiemployer H&W Plan ("Plan 1") that terminated earlier this year. All the participants became covered by a different plan ("Plan 2").

Retirees were covered under Plan 1 and the amount they had to pay for coverage was pretty cheap. Retiree coverage under Plan 2 is much more expensive. When Plan 1 terminated, after paying claims, there was still a good chunk of money left. The Trustees decided to use that money to pay part of the retiree coverage in Plan 2. The idea was to pay part of it for a year, thereby giving retirees a year to figure out what they wanted to do (exchanges or buy their own plan) and to plan ahead for the increased premiums with Plan 2.

However, Plan 1 is now pretty much out of money. Right before Plan 1 terminated, there were a couple out of the blue large claims that killed a lot of assets. We didn't find out about them for a while just due to the lag in claims being submitted.

So, it looks like Plan 1 is not going to have enough money to continue paying the retiree coverage for the full year that it promised.

My question is, is Plan 1 required to give notice to the retirees that it will not be paying the amount? If so, how far in advance does the notice need to go out?

Keep in mind, Plan 1 is not paying claims. It is merely providing a subsidy to the retirees to help them pay their premiums to Plan 2. Plan 1 does not pay any benefit claims anymore.

Thanks.

Client has a 6/30 plan year. As of 1/1/17 ownership will slightly change and they will be closing their facility as of 12/31/16, as it is being moved to another state. Most of the employees will not be relocating and are terminating. Of course this will warrant a partial plan termination. During this time, the client has hired new employees who are from the state in which the new facility will be for training purposes. Client would like to put in a final Profit Sharing Contribution only to those who are part of the original facility and vest them 100%.

My thought is to have a short plan year but since the eligibility is 6 months/monthly entry, those who were hired before 7/1 will be eligible. Is there a way we can exclude them?

The plan is safe harbor with new comparability.

This one seems like there should be a simple answer, but I'm not finding it. What happens if an employer terminates a dependent care FSA in mid-year? For example, suppose the employee is putting aside $400 a month. The employer terminates the plan June 30, so the employee has put away $2,400. However, the employee has received no reimbursements yet, having expected to use the whole amount only in the last six months of the year. (For example, the employee's wife is home and taking care of the baby for the first six months of the year, but the money was put aside to cover child care for the last six months.)

Can the employer simply cut the program off, with the employee losing the $2,400? May the employer stop future contributions, but still pay out the $2,400 already contributed? Or must the employer continue the plan until the end of the year, so that the employee can contribute the full $4,800?

And what if the employer ceases to exist? In that case, options 2 and 3 are out of the question. Does the employee just lose the money?

C-corp is changing to a safe harbor plan, due to issues with testing. The goal is to use the enhanced testing method and avoid all testing requirements for ACP/ADP/top heavy .

Is it possible to use the following enhanced match:

Contrib/Match

1%-1%

2%-2%

3%-3%

4%-3.5%

5%-5%

My concern is the "step-up" from the 3.5% match to the 5% match,,,,,,,,

The goal is that employees that contrib 5% continue to receive a 5% match -- does that mean that 4% contrib would need to receive a 4% match?

Thanx,

SD

client is concerned that by putting mutual funds in his plan the individual securities inside the funds could trigger a PT or some type of conflict if he is in that industry or does business with any of those companies. i believe this isn't a PT but i am having trouble finding anything on point.

We have a plan sponsor that implemented a 401(k) Plan in 2016. This is a safe harbor match plan with an additional fixed match and a discretionary match, i.e. uses the triple-stacked match plan design. The fixed match formula is 86.79% on deferrals up to 6% of pay. This was written into the plan, as it is the formula that maximizes the owners for 2016, when we are using a discretionary match of 66.6667% on 6% of deferrals (equals the 4% ACP safe harbor match).

I realize that we should have considered drafting this differently because now we will be in a situation where the owners are not maximizing for 2017 under this formula (due to COLA increases).

I am curious to know what other administrators are doing:

1) Amending the plan document in advance of each year to increase the fixed formula based upon the COLA increases

OR

2) Drafting the original plan documents in such a way that amendments each year will not be necessary and owners will still maximize contributions. This could be something like including a 100% fixed match on deferrals up to 6% and then determining the discretionary match (ACP safe harbor) to maximize. The problem here is that the plan sponsor would be committing to a higher fixed match than would be necessary.