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.

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?

I have a plan that has been adopted by an employer with 5 divisions. The plan document has been written where each person is in his or her own class. The plan sponsor intends to provide a flat percentage of compensation (7%) to one of the five divisions only. When the coverage testing is run, it will most likely fail the ratio test. The first question is am I able to utilize the ABT or do I have a reasonable classification issue? The plan document calls for each person in their own class, but, in practice, the allocation is a flat percent to one division.

(Before anyone comments, I have spoke with them about amending the document to name each division as a group, but they are resistant as they do not want to put that language in their SPD as they believe that it will alert the other divisions that a contribution is being made to one and not the others.)

I noticed that there is now LRM language for prototype SIMPLE-IRA's.

I was under the impression (perhaps mistakenly) that prototype SIMPLE IRA's were not available previously. So is this entirely new, or were they available and I just didn't know it?

https://www.irs.gov/pub/irs-tege/sira_lrm0916.pdf

Actually, as I look at this, I think perhaps this is just language for the IRA's themselves - not for the actual SIMPLE Plan document?

If an employer is apart of an affiliated service group and maintains two identical retirement plans would the allocation of QMACS to one group of plan employees but not the other group in the other plan be considered to be targeting?

I understand the plans would have to be aggregated to pass testing.

I am thinking that this would not be considered targeting, for example if all NHCE's of Company B got the same % QMAC in plan B.

Has anyone had any experience with fidelity approving a qdro? I have called several times and get told different things each time. It has now been a month since I received acceptance letter stating they had received it. Just wanting to know how long your process took when it was finally in pa hands.

Company sponsors a 401(k) Plan. Last year, two related employers began participating in this Plan with their employees contributing. The Plan document does not indicate that they are part of a controlled group of companies and does not have participating agreements or corporate resolutions signed indicating participation in this Plan. Company wants to correct and file under EPCRS to be sure it is properly corrected. A retroactive amendment to the date of participation and adding them also as members of a controlled group is going to be the recommended correction. In looking at the Forms 14568, I'm not sure what schedule they should be using. I'm thinking 14568-B, Schedule 2 - Nonamender Failures (other than those to which Schedule I applies). Also, is there a reduced fee or is it the standard fee in Rev. Proc 2013-12?

Thank you very much for your time.

Consider a safe harbor 401k plan with a few owner/key employees in the plan (nobody else). If the company adds a new non-key employee to the plan, won't the plan immediately become top-heavy, since the owners all have several years of assets in the plan and the non-keys have basically nothing at that point?

Are there any workarounds for that problem, other than these I've found:

• Make sure the 401k only has safe harbor employer contributions (no more profit sharing, etc.), to qualify for the safe harbor top heavy testing exemption. The downside here is no profit sharing anymore, which hurts everyone.
• Provide an extra contribution for the new employee only, to fix the top heavy failure. The downside is that the employee kind of gets "more benefits" per year than the owners, which the owners may not like.

What would you say is the "best" and "easiest" way to accomplish this:

Corporation "A" with two owners is dissolving, possibly with some bad blood involved. They will each form new corporations. They will essentially each take half of the existing employees. Each wants a plan.

1. Would you just terminate the existing plan and establish a new plan for each employer?

2. Would you have one employer assume the assets and liabilities of the plan previously sponsored by corporation "A" and just have one of the new employers set up a new plan?

3. Other?

I don't know that it ultimately makes a lot of difference, but somewhat cheaper administratively not to go the route of #1. However, I don't know if either employer would be willing to assume the assets and liabilities of the plan currently sponsored by "A" or not. Let's also assume no controlled group or affiliated service group will exist, so shouldn't be any "successor plan" problems, since new employers won't be the same or related employers.

part of my 'tradition' is to send goodies this time of year (Thanksgiving or Christmas) to my co-workers in the other office. I greatly appreciate their help, and my way of saying thanks (This is on my own, would never dream of being reimbursed) well, this started a running gag about cows over the last few years, because the candy is cow themed. I placed an order yesterday, and asked 'Homer' the Holstein to write the people's name on the gift boxes. of course, I forgot to include the names on the order form, so had to send a follow up e-mail with that info, and I included a 'picture' of the animal that makes the horse apple candy. so today out on their face book page, lo an behold the picture shows up. too funny.

it can be found here:

https://www.facebook.com/pages/Baraboo-Candy-Company/262846608798

if interested their actual website is

http://www.baraboocandy.com/

I like the gift boxes that include a sampling of many of the different items. they come in cute white boxes with cow spots and everything. cow pies and moo chews and udder fingers. what more could anyone ask for?

In reviewing a draft 990 for a retiree welfare plan, I learned that the prior year 990 was filed on cash basis. For 2015, we received a copy of the Financial Statement for the 5500 audit along with a cash reconciliation worksheet. On the cash reconciliation schedule, there was an account named “benefits payment redeposits” in the amount of over $4mil. I’m not sure if it should be entered on the 990 as revenue under cash method? Or it is related to any benefits accrued in prior years? Upon initial research, I learned that other organizations have listed the benefits payment redeposits as part of the plan's opening balance on the portfolio statements attached to the 990s, but I'm not sure if this amount actually entered on the Form 990 itself. The instructions to the Form 990 did not shed any light. Any help or direction is greatly appreciated!

Suppose you have corporation A, where the stock is 100% owned by Mr. Big. It manufactures fishhooks for vegetarians.

Mr. Little, who is the Controller of Corporation A, owns 100% of the stock of Corporation B. It manufactures very large frozen drink glasses for TPA's.

These are not in any way service organizations, (even though manufacturing very large frozen drink glasses for TPA's is a valuable service in my book) or related in any manner whatsoever, so there is no ASG issue.

Mr. Little has an option to buy 100% of the stock of Corporation A, if the stock price reaches $100.00 per share. Currently it is at $10.00 per share.

Due to option attribution, Mr. Little is considered as owning 100% of both corporations, so there is a controlled group. (discussion of what really constitutes an "option" is scarce, but there are a couple of old Revenue Rulings - 89-64 and 68-801)

So, finally, here's my question - just looking for opinions. If Mr. Little applies for a Private Letter Ruling, arguing that the ability to ever exercise the "option" is vanishingly small for the foreseeable future, and that he otherwise has no control, so that this ownership situation should NOT be considered a controlled group, do you have any guess or opinion on the likelihood of the success of that argument?

My guess, and obviously it is a guess only, is that it would be unsuccessful. Just trying to think outside the box.

Thoughts?

Traditional private sector DB plan. Currently QJSA is defined as J&100%S. Can the QJSA be amended to J&50%S? Or, is the QJSA an optional form subject to 411(d)(6) protection?

My non-deductible IRA has a balance of $200,000. I wish to do a Direct Rollover as follows: The $70,000 of non-deductible contributions will go into a Roth IRA and the $130,000 of earnings will go into a Traditional IRA. Is this permissible?

Thanks,

JOEL

Anyone gone through an IRS audit around PCORI fees? If so, any idea what sparked it and how broad of a review of other issues the IRS generally covers with these?

Is it possible for the termination liability in a cash balance plan to be lower than the sum of the individual hypothetical accounts?

Thanks for any responses!

Plan started termination in 2015. Owner and spouse. Could not/did not finish rollovers until well into 2016. The 2016 RMD was not taken before plan assets were finally distributed.

Can a distribution of the RMD amount that should have come out of the plan in 2016 be taken from IRA accounts to makeup the amount that should have come out of plan assets?

I have a 3% nonelective safe harbor 401(k) Plan that is terminating effective 10/31/2016. The safe harbor is to be calculated based upon compensation from January - October. This is due to a business acquisition, so safe harbor status is maintained.

There is one owner who receives Schedule C income. Safe Harbor has been deposited for the 3 non-owner employees throughout the year. The owner has taken $10,000 distributions periodically and the bookkeeper has made 3% safe harbor deposits based upon these amounts to the owner's account.

The owner's actual earned income for the year will not be determined until sometime in the first quarter of 2017, but we would like to have all assets paid by 12/31/2016 to prevent another plan year. So...how do I calculate the owner's safe harbor contribution from 1/1/2016 through 10/31/2016?

1) Treat him as having earned $0. This would be a problem because, not only did he have safe harbor deposits, but he also deferred during the year.

2) Have the CPA estimate his earned income from 1/1/2016 through 10/31/2016 and calculate the safe harbor for the owner based upon this estimate.

Any other options? Has anyone dealt with this conundrum? Thank you!

In a plan that we have recently took over, we have discovered a participant (born in 1937) died in 2005 and was not paid out by the 5th year (2010) and still has an account balance. In addition there is no beneficiary on file.

Any suggestions on how to correct this? Can someone point me in the right direction?

Thank you!

With the objective of increasing advisor relationships, we are thinking to offer the following type of promotion. Anyone done anything similar?

• $1,000 off first year tpa services for a new client which is the first client brought by a new advisor for retirement plan services to our firm