I have two plans whose ERs are in a controlled group.  Do the owners who are in both plans have 2 415 limits?

Does it matter if they pass coverage on their own or if they must be combined for testing to satisfy coverage?

I know that if a participant terms with less than 500 hours, I can exclude him from coverage testing.  But can I exclude him from the general testing, too?

Hi there!

I have a plan that has always been an easy one to administer.  Generally max out the top tier (and near max to execs) and give the minimum to others to pass gateway.  

*Plan excludes pre-entry comp*

However, they hired a younger person in 2015 (and made enough comp to be an HCE in 2016) that became eligible in 2016.  He is part of the tier that receives the max and his EBAR is through the roof.  I won't be able to individually target young NHCEs because they are also lumped together (just 3 tiers in plan overall...hundreds of people).  

My question - can I use full year comp for everyone when running ABPT/calculating EBARs rather than plan comp?  His EBAR would nearly cut in half.  Gateway would still be using plan comp.

Thanks!

After coming across some posts about fraud, was wondering about this scenario:  A company's owner gives his 2 daughters a salary, maxes out their 401k contribution, and gives them a safe harbor and profit sharing contribution every year.  They get a W2.  We have tracked their vesting since they are on the census each year with hours listed. They do not work for the company. Ever. Not even for 5 minutes.  Could this be an issue? Is it illegal?

I got a call from a broker today - we service a mutual retirement plan client.

The client is a Subchapter S.  The owners deferred throughout the year weekly on compensation they received.  Now they are asking if they can max out.  He deferred 13,372.87 through the year and she deferred 12,980.70, so they obviously did not reach the 18,000.  They are not 50 yet.  His comp was 222,000 and hers was about 40,000.

Is there a way to get more deferrals in for them?   Are there normally any K-1s for the owners of Sub S Corp.  I get a little confused on whether they can draw a salary and receive a K-1 in addition. 

They can do a cross tested profit sharing contribution per their document. 

Any input would be appreciated.  Thanks!

Looking for guidance or clarification.  I have 4 groups with individual plans, they are controlled and no employees overlap.  410b passes for all sources but one group does not pass 410b for PS.  Nondiscriminatory Classification passes so I go onto the ABT.  As I do not administer all of the groups, I do take care of the coverage testing.  2 of the groups are also now SH and are no longer putting in PS. 

A - 401k, Disc Match, New Comp      PS Benefitting 40 HCE 225 NHCE

B - 401k, SHNE                                  No PS, if Benefitted 5 HCE 82 NHCE

C- 401K, SHNE                                  PS Benefitting 4 HCE 55 NHCE

D - 401k, Disc Match                          No PS, if Benefitted 3 HCE 16 NHCE

The Plan passes AVBT when all are tested together.  I just want to make sure that I am doing it correctly by testing them all together even if they are not putting in the PS Contribution.

In the process of terminating a DB plan, one participant elected a split distribution - part as lump sum, and part as a rollover.  The lump sum amount is great enough to require 20% withholding.  Client's CPA is saying that the company is not responsible for submitting the withholding taxes, the participant is, due to the plan termination.  Client has issued a check to the participant for the full lump sum amount, and instructed him to submit the W/H taxes himself.

Never heard of this before.  Is this something new in the tax filing world?

In the good old days, when I hovered over "message boards," I'd get a little drop-down menu where I could select "latest messages" and get a list of threads that had posts in the last day or so. One entry per thread, regardless of the number of posts. Good times.

Now when I do the aforementioned hover and click, I get a little error warning and no threads. If I click "activity" I get a list of what seems to be every post from the last day or whatever time period, and I'm not really liking that view much. Is a list of active threads like before somewhere and I'm just missing it?

BenefitsLink has compiled a handy web page with hypertext links to Form 5500 (and its variants) and Schedules, including Instructions, back to the first year the form was required by ERISA.

http://benefitslink.com/src/misc/form-5500-for-previous-years.html

Sometimes it's necessary to refile an earlier year's form, so the web page might be a convenient way to pull up the needed PDF documents, and to see which schedules were required for a particular year.

If you see any opportunities for improvements to the page, please let me know. Thanks!

Participant provides a valid and timely deferral change form to HR. Deferral form says "I want to defer 100% of eligible income on the December 31, 2016 payroll" HR does not process the request. Participant is upset and plan sponsor wants to fix the problem. We can follow Rev Proc 2015-28, but are there any other possibilities?

The payroll funds are sitting in the employee's checking account. What would happen from a compliance point of view if the plan sponsor retrieves the funds and corrects the December 31, 2016 payroll and withholds 100%? 

Thank you

Participant in a 401(k) Plan has a life insurance policy and dies. I understand that the difference between the proceeds and the cash surrender value are non-taxable. The beneficiary is getting paid out payments of the cash surrender value how would we report this on the 1099R. Specifically what code do we use? for the tax free portion.  

There are a couple of groups of forums that I have generally have no need to see ("Retirement Plans" believe it or not and "User Groups").  Before the upgrade, I could hide those groups.  After the upgrade, when I first go to the site, both those groups are unhidden and I manually have to hide them.  It's not the biggest thing in the world, but is there a way to make them so I do not have to manually do hide them?

It says the alternate payee gets 50% of the Account Balance Accrued between 12/1/05 and 9/1/16.    The participant has an account balance of 10,000 as of 12/1/2005.  Is it a simple calculation of taking the AB as of 9/1/16 minus the  AB as of 12/1/05 and taking 50% of that?

Or do we separate the Participants AB as of 12/1/05 and the Participant keeps the earnings on that. 

Or do we reject it and have it clarified?

Would there ever be a period of time where there is a loss of life insurance coverage during a 1035 exchange?

An employee entered into an employment agreement with his employer.  It had a section regarding the 401(k) plan with the wording "any employer matching funds for the 401k plan would be deducted from the overall compensation.   For example if compensation equals $300,000 and he puts in $10,000 into the plan thereby triggering a $10,000 employer match, then his compensation would be adjusted to $290,000"

Can you do this?  The company has a 401(k) plan and this person is a W-2 employee.   Thanks.  

We have a client that changed their payroll dates.   They processed a weekly payroll and then will revert to bi-weekly.   For this one weekly payroll, the client made the decision to only deduct deferrals for participants that made a percentage deferral election.  They did not deduct for those that elected flat amounts or loan payments.    I believe this falls into the category of missed deferral opportunity.   Am I correct?

We have a potential referral and interesting situation.

IRS is proposing disqualifying a plan back to it's inception saying it was never qualified.

In cases such as this, do the minimum funding standards still apply?

It would seem odd that they would apply since the disqualification would negate any deductions but I can't seem to find anything quite on point.

Assume the Plan is not subject to PBGC coverage and the client does not want to enter a closing agreement to "fix" the disqualification.

A participant was paid an RMD in 2016, but she lost the check. Therefore, the check was cancelled and reissued in 2017. Should a 1099R be created for 2016 or 2017?

What about if the payment was made through a third party distribution service? The plan wrote a check to the third party in 2016 and the third party sent the check to tyhe participant in 2016. In 2017, the third party cancelled their check and reissued. Does this situation have a different answer?

Thanks for any responses!

I'm a former employee of a company that offers ESOP as a benefit.  I was laid off in September of 2010 and was told that the company will hold the money for  60 month period.  When i contacted the company in 2015 I was told that I had to wait until the 5th plan valuation after separation, or 2016.  In 2016 I was sent information on elected a lump sum distribution.  I contacted the company and was told that  wold need to make the election between July 1 and September 30, 2016.  They payment would then be made no later than the end of the year (by December 31, 2016).  I elected my lump sum distribution on July 8, 2016.  On November 18, 2016 I contacted the financial company that would process the distribution.  I was told that the payment would be processed no later than December 31, 2016.  I checked again on December 29, 2016 and on December 30, 2016 that financial company again said that, per plan policy, payments would be processed by December 30, 2016.  On December 31, 2016 I received a letter from the company that was dated December 30, 2016. The letter stated that because sales were not as anticipated and industry competition was stronger than anticipated,  changes to the ESOP plan have to be made.  It explains payments to former employees will be deferred.  It does not say for how long.  Also, the letter says lump sum payments will no longer be made and payments will be made over 5 annual installments once participants become eligible for distributions.  I have not received a summary plan description since 2005 (I no longer even know where it is).  I stopped by the company to view the SPD and was told that the person who has access was gone for the day, so I will be back today to pick up copies. I am wondering if this type of last minute notice is sufficient.  Also, I am already eligible for distribution, so shouldn't I at least be getting one of those five annual installments?  I am not sure how I can make this company pay me my money. The attorney I contacted said if the account is not worth at least $100,000 it is not worth it to litigate. I know $27,000 is not a lot of money to most, but it will make a world of difference to my family.  The letter is attached, and it does not offer much information.  I would just like to know when I can expect to get paid.

401(k) Plan.  Loans per loan policy repaid through payroll withholding.  Participant going through divorce and wants to cease the withholding for loan payments and default.

Prior threads (found one from 2008) show no guidance offered and I have not found any guidance.

Any thoughts would be welcomed.