I've always worked on Form 5500's w/ the Schedule I and Schedule H. The 5500-EZ seems so basic that I'm worried I'm overthinking things so I have a question:

Would Fee's and Distributions for a Profit Sharing plan be reported on Line 7b of the Form 5500-EZ?

According to the IRS instructions Line 7b "Liabilities include but are not limited to benefit claims payable, operating payables, acquisition indebtedness, and other liabilities. Do not include the value of future distributions that will be made to participants."

Thank you to anyone who might help enlighten me.

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

Does anyone think this "Carol Gold" memo about abuses involving short-term employees would apply to the owner's spouse working a "few days" solely to have her included in the ADP test as a zero?

I'm trying to find a reason why it is wrong because it just doesn't feel right. They would be the only two HCE's so it effectively doubles what the HCE can contribute.

Is a partner that has separated from service (in September 2016) eligible to receive a profit sharing contribution if there is a last day allocation requirement?

A participant wants their employer to terminate them, so they can take a distribution from the plan, and then have the employer rehire them. They could take a loan, but the participant doesn't want to have a loan payment. They do not meet hardship needs either. So, is this legal? It sure doesn't seem right. Any thoughts?

thanks

If an employee provides 2 weeks' notice to his/her employer of a voluntary termination of employment and the employer chooses to immediately terminate the employee but pay the employee in lieu of requiring the performance of services during the 2-week notice period, is the 2 weeks of pay "regular pay" from which 401(k) plan deferrals can be made?

A participant loan program specifies that a participant loan "is due and payable on termination of the plan." If the plan terminates on December 31, must the loan be paid off before that date, or does the participant have a certain number of days to make the payment after being notified, even if it extends the repayment date beyond the plan termination date?

A fiduciary may use e-mail as the initial means of delivering a communication to a participant who can “effectively access documents furnished in electronic form at any location where the participant is reasonably expected to perform his or her duties as an employee” if “access to the employer’s … electronic information system is an integral part of those duties[.]” 29 C.F.R. § 2520.104b-1©.

But what does it mean to say that using e-mail or some other software is “integral” to an employee’s work? If a person’s work involves physical activities but his or her employer requires him or her to check e-mail every two hours to get instructions, is that enough? Is the answer the same or different if the employee is required to check e-mail only once for a whole eight-hours shift?

If a worker is required to read e-mail but is not expected to write any response, is electronic communication "integral" to his or her work?

Happy holidays or extended weekend or whatever you celebrate. Enjoy!

Is there are permanency issue with starting a plan 1/1/2016 with a 10%/year accrual and then freezing the plan effective 1/1/2017?

Thanks for any responses!

I have a new 401(k) plan going in for a client, and we are now getting word that the platform won't have the accounts ready until after the first payroll date, but likely by the second one two weeks later.

So the plan document and all the SPDs and the enrollment meetings said that deferrals are effective 1/1/17. There are dozens of people poised to defer with the first payroll in 2017. What are workable options?

> I have heard anecdotally that the IRS is actually reasonable in this scenario and will not penalize a plan for missing the first payroll's worth of deferrals. The participants should of course be told in advance that this will happen, but then they can start up with the second payroll with no additional fuss.

> The plan document could be amended to allow deferrals starting with the second payroll period. Again, the participants should be told that this is happening.

> Take the deferrals from the paychecks and deposit them into a plan checking account that is then transferred into to 'real' plan accounts when they are ready. This is my favorite method, though I'm not eager to see how this unfolds with 50 or 60 participants deferring. The participants are told that their first deferrals will be in a 'holding account' for a short while until the real accounts are ready.

> Take the deferrals from the paychecks and hold on to them in the company accounts. This eliminates the extra steps in the last one, but at the cost of lost earnings that have to be calculated.

Any options I didn't cover? Any thoughts on these? Any pitfalls to avoid? Thanks.

My plan document seems only to have distributions for the situation where the participant make 401k contributions in more than one plan. And EPCRS seems only to address missing the 4/15 deadline.

So where do I turn for correction in this situation?

A 401(k) plan covers a doctor, age 71 and his wife (not yet 70 1/2). I recently sent required minimum distribution paperwork to the doctor. Today, his financial advisor called me and said, "Don't worry. We've already satisfied his 401(k) RMD by increasing the amount he took as an RMD from his IRA." I thought that the RMD has to come from 401(k) plan assets.

Who is correct?

Thanks for any responses!

Plan has 120 participants, 95 of which have balances. We amend the plan effective 1/1/17 to exclude, by name, 30 non contributing participants. That gets the BOY Count to under 100 and therefore no audit.

Anyone see any issues?

Any issues with making another amendment later in the year, say February) making "all employees" eligible for the plan?

On 3/15/2010, we did our safe harbor match of 3% across the board to every eligible employee who worked and met our requirements in 2009 even if they left during the year. There were three terminated employees which the pension plan never deposited in their accounts because they had withdrawn their funds but they never notified us of this issue.

In 2014, when I was doing our bank reconciliation, I noticed one of the 401K funds withheld from a payroll was never deducted from our bank. When I contacted the pension plan and questioned if the funds were deposited into the employees' accounts they said yes and my boss verified everyone had their funds in their account for that payroll. After many months of emails and calls to verify this, we assumed the bank had made an error in our account and not the pension fund.

In 2015, once again when we were doing the bank reconciliation, it was noted that the pension fund took out less then what was withheld from the employees' paychecks.l

After many phone calls and emails, we were finally able to determine that the pension plan used the funds from the three former employees in 2010 which was sitting in a cash account to cover the two payrolls described above. All of this was done without our knowledge. We were not aware they had a cash balance with funds we submitted.

In speaking with our accountant, they have agreed with us that we have to give the three former employees the funds they were entitled to in 2010. My question is how do we do this correctly? We don't know a way to have the monies go through our payroll as this was done in 2010 already. And the pension plan can only take funds from payroll. If we send checks to the former employees, is the whole amount taxable to them? Is there a way to get them the funds so it's not taxable until withdrawn?

I am really rusty with respect to testing a DC plan only.

The plan has eligibility for:

Deferrals of age 18

Match and Employer of age 18, 1000 hours and 12 months

QNEC of age 18

The client is questioning whether employees eligible for deferrals but NOT eligible for the match should be excluded from 410(b) testing (both ratio percentage and average benefit percentage test).

Any help would be appreciated and thanks in advance.

I certainly wish all a Merry Christmas, may God bless all.

or Happy Hanukkah if that is your faith.

my apologies if those 2 statements leaves someone off the list.

in case you have lost the Christmas Song puzzle, here it is.

you probably have to enable editing to enter items in the puzzle, I don't recall.

enter a number in the 'yellow' field, the number is from the song list on the second tab.

........................................................

note: I attached a slightly different version of the excel sheet. the only difference is at the bottom of the song list. (I had that on my original excel file but attached the wrong version earlier.

The Long Version of the SSQQ Christmas Puzzle is the Original Work of Rick Archer. I share it as my gift during each Holiday Season. Everyone is welcome to reproduce my puzzle for their own private use to entertain students, friends, and visitors as long as you do not charge money. It is meant to be a non-commercial form of entertainment in the original spirit of Christmas Giving.

No one may reproduce any part of the Long Puzzle on the Internet or for any form of commercial use without the written permission of Rick Archer. If anyone sees any part of my puzzle reproduced elsewhere, please let me know. Thank you for respecting my wishes.

Rick Archer

the link to his sit should be on the excel sheet. there are now 150 puzzles available, but he has replaced a number of the pictures and personally I'm not as happy with tehm, but then that is me.

christmas puzzles- 130 to solve .xls

I have a db plan(actually db/dc combo) under audit. The agent is suggesting an amendment is required which would increase the db benefits for two nhces. I strongly disagree with the agent's assertion. Is there any harm in arguing why I think the agent is wrong(in other words is the worst case the IRS will just say we are right and you must amend?).. The plan is a good bit overfunded(350k) so the additional benefits(about 45k in value )would not be a hardship and would not create any current contribution liability but why should the ees get a slight windfall if it is not justified?? It is not really fair to the other ees in the combo..

A second question is whether plan audit related fees are properly payable from the plan or are they settlor type in nature??

thank you for any comments...

Greetings,

The plan sponsor is required to make a corrective contribution for the missed deferral opportunity. The EPCRS states that if the employee had not made any investment choices, the rate of return (ROR) under the plan can be used. It was my understanding that if the ROR is negative, the IRS underpayment rates must be used but I can't point the Rev. Anyone has the citing for this?

Thanks.

What is the easiest and quickest way to apply for a TIN for a new small 401-k Plan? Any help is greatly appreciated!!

I generally don't deal with 403(b) plans, but I'm trying to help a friend (the ex-husband in the case below).

A professor participates in the university's 403(b) plan. She is divorced and a QDRO awards her ex-husband 40% of the marital portion of the 403(b) benefit, which winds up being about $72,000. The ex-husband needs the funds, so, even if it's rolled over into his IRA, he will immediately have the funds distributed from his IRA. The participant has offered to pay him by check, but will charge him for doing so.

1) Can the participant charge for paying by check?

2) If the ex-husband is 56, will he need to have a) 20% withheld for federal b) applicable state withholding withheld, and c) the 10% penalty? Will this be true if he rolls it over and has it immediately distributed?

Thanks for any responses!