My problem is whether a "Not-for Profit Firm" (501©) can create or be part of a controlled group.

Basically, there are 3 firms. Firm A is 100% owned by husband and Firm B is 100% owned by wife. They satisfy the exemption for attribution under IRC 1563, so there is no controlled group between A & B.

Firm C is a Not for Profit, and the 2 directors are the husband and wife. Does this create a controlled group for either Firm A or Firm B, or all 3?

Plan Sponsor of 401(k) plan is filing a VCP submission for other unrelated failures. During course of investigation, it was determined that one of the participating employer never signed an adoption agreement, as required under the terms of the Plan Document.

A retroactive amendment was prepared adding the participating employer, along with a restatement of the Plan's adoption agreement.

We are preparing a VCP under Form 14568 Model VCP Compliance Statement. Would a particular Schedule/form also be required for this error/correction?

Thank you!

Is this permissible? Participant takes loan - for short period - say 1 year. Employer never withholds anything. This is discovered just before end of cure period for the first couple of payments. No problems, no matter what, with maximum dollar or 50% limits.

Can a refinance, which starts before the end of the cure period, extinguish the "delinquent" payments, since it is considered as repaying the original loan? (Assuming the period of the replacement loan doesn't extend beyond 5 years from the date of the ORIGINAL loan)

Seems like a loophole. If allowable, one could keep missing the first payments, and refinance every time and ending up with what amounts to a "balloon" payment at the end.

Client is a C corp. Owners are employees who are both enrolled in non-group medical plans. They want to set up an HRA so they can be reimbursed for medicare B, medical supplement and RX plan. This will not be available to employees under age 65.

Under age 65 employees are in a group medical plan with no HRA.

Is this type of arrangement possible?

Greetings … Apologies if this has been covered before, I couldn’t find it.

A long-service employee, not an HCE, is finally retiring at age 81. He is covered by a frozen traditional corporate DB plan.

The plan does not permit in-service distributions. The actuarial adjustment for late commencement covers only the period since the April 1 following his age 70.5 year (they provide the suspension notice at NRD) but is still pretty large — it increases his monthly pension from $2,900 to almost $9,000.

But his high 3-year average Section 415 compensation is $6,800/month. This limit is not adjusted for late commencement so his monthly pension seems to be capped at $6,800.

Under the old required beginning date rules, he would have been receiving $2,900/month for life since age 71 with no Section 415 issues. The law permitting plans to do away with in-service distributions for non-owners seemed to rely on the premise that the required actuarial increase would keep participants whole. But failure to adjust the % of pay limit for late commencement appears to prevent that here.

Am I overlooking something?

This employer has a frozen SERP for selected executives, but no general excess plan. They likely never anticipated one would be needed, but given their current financial plight there’s no chance that they will provide a top up from general assets.

I always find this subject confusing. Safe harbor basic matching formula - 100% of first 3%, 50% on the next 2%. Plan also allows discretionary match. If a discretionary match is made adding another 50% on deferrals of 4% and 5% - basically transforming the match to 100% of the first 5%, it seems to me that this satisfies the ACP safe harbor, still. Basic match, discretionary match is less than 4% (it is 1% max). What about nondiscrimination testing? No current availability issue, is effective availability a potential problem, (cause the discretionary match is only available if you defer more than 3%) or am I worrying about nothing?

I have a Control group

2 plans different elig

one a SH, one not.

The plan that is not a SH fails combined testing. But there are not enough people in that plan to allocate a benefit , to pass testing.

What are my options?

Company X has entered into a contract with Provider Y to provide recordkeeping services with respect to its 401(k) plan. For years, it has arranged for revenue sharing through investments in mutual funds not affiliated with Y which provide a rebate of a specified number of basis points. To continue with the trend of DC plans to shun revenue sharing arrangements, X would like to determine Y's fees on some basis other than revenue sharing. Some obvious ones that come to mind are a flat dollar fee per participant, a flat dollar fee per transaction (e.g., a loan) and a set amount per hour in connection with the performance of other services. Does anyone have any other alternative methods of arriving at fees that they have seen or encountered?

Thanks.

I posted this once before without luck. I'm hoping someone can help me on this because I appear to be stuck.

The 409(p) regulations define "related entity" as:

"any entity in which the S corporation holds an interest and which is a partnership, a trust, an eligible entity that is disregarded as an entity that is separate from its owner under § 301.7701-3 of this chapter, or a qualified subchapter S subsidiary under section 1361(b)(3)."

Is a subsidiary of a subsidiary considered a "related entity"? For example, the S Corporation owns Subsidiary A and Subsidiary A owns Subsidiary B. Is Sub B a "related entity" to the S Corporation?

I appreciate any help / thoughts / answers anyone can provide. Thank you!

For a one-person plan eligible to file 5500-ez or 5500-sf but with total assets under $250,000, what tolls the start of the statute of limitations?

It probably would not get audited unless part of a bigger audit, but it might require keeping plan records far beyond the three year period normally in place.

Can any company that is part of a controlled group adopt a SIMPLE? If so, would it follow then that either all members of the CG MUST be eligible for the plan or that all members are included for testing purposes, even if not eligible to be in the plan (which would seem to take the simple out of SIMPLE).

Is it even permitted for all members of a CG to adopt a single SIMPLE?

Thanks

Recently took over a large 401(k) plan too late in 2016 to not have the 10% excise tax apply.

Several of the HCEs will have to take distributions of their excess in 2016.

Over 100 participants, must do the Independent Auditors Report.

Accountant wants us to set up a liability as of 12/31/2015 for the excess and show as such on Form 5500.

Also, since we did not have any of the information necessary to do the ADP test as of July 31, we filed for an extension only for Form 5500.

Is form 5330 due for 2015, or for 2016 when the funds are distributed?

Any suggestions?

Currently is there more protection for an individual to leave his / her account balance in a 401k plan than to move it to an IRA?

My thought had been that it used to be the case where leaving balance in the plan gives additional protection, but is that still the case today?

Anyone's points of view would be appreciated, Thanks

Would a plan that does not otherwise allow loans be able to accept loan rollovers in connection with an acquisition (assuming the accepting plan's rollover language does not prohibit a rollover in the form of a loan and assuming that all those with rolled over loans are non-highly compensated)? On the one hand, it seems that allowing a loan rollover is distinct from allowing the issuance of an original loan under the plan. But I am wondering if it runs afoul of the prohibited transaction exemption for loans, which requires that loans be made available to all participants on a reasonably equivalent basis. Is anyone aware of any authority or guidance on this issue or have any experience or thoughts on it?

Plan says that in order to receive a retirement benefit, participant cannot work for a contributing employer for 90 days from the effective date of the participant's retirement.

So participant retires from Employer ABC on January 1, 2016 at age 65 (the Plan's normal retirement age). Per the Plan's rules, participant cannot go back to work for Employer ABC for 90 days. On day 91, participant can go back to work for Employer ABC. Assume normal suspension of benefit provisions aren't applicable.

Is the 90 day provision permissible?

Thanks.

I have a single owner LLC that files as a sole proprietorship. The LLC has been in existence for 3 years. It purchased the assets of a going business 2 years ago. He had no employees prior to the purchase. If the qualifications are 3 out of the last 5 years, is the owner the only qualified person? If so is it top heavy? If it is top heavy, and he wants to contribute 25 % for himself, how much does he contribute for employees and do they have to meet the qualifications of a participant or is it for all employees that worked?

He does have 1 employee that came from the purchased company that is still with him.

Sorry if this is an overlap. I did search and there was just too many posts to go through so questions is:

Have a Non-Erisa 403(b) Plan wishing to terminate. Funding vehicle says Custodial Accounts. What am I as TPA required to provide the plan sponsor other than the termination resolution for this process. Do I need to prepare a Notice for participants and if so, what information should it provide, and what should I convey to the client regarding this termination process? I was reading about a 12 month rule for distributions to be all out. I am just not versed on 403(b) termination and want to make sure I provide all the information correctly for the client and the participants.

Thank you.

A participant requested a direct distribution. Thinking she was executing a rollover, she forwarded the check to her new employer's plan. After back and forth with the new employer plan to deposit the check, she's calling the old employer plan stating she wanted a rollover in the first place. According to the participant, the new employer plan has taken so long to act and return the original distribution check, the 60 day rollover window is about to expire.

The recordkeeper is willing to void the direct distribution and issue a new distribution as a rollover. To do this, they want a letter from the trustee of the old employer plan stating this was an "error at the participant level and please correct the distribution as a rollover".

I'm the advisor to the old employer's plan. My question, is the trustee of the old employer plan putting themselves or the old employer plan at risk with the IRS to write a letter requesting the distribution be redone as a rollover?

Thank you for any thoughts

A group of controlled companies with 7 separate plans decides to merge the plans for 2017. Three of the companies maintain plans that currently offer matching contributions, which they would want to continue going forward but would not be extended to other members of the controlled group participating in the merged plan.

If each of the 3 companies could pass 410(b) separately, am I correct that: (a) there is no BRF problem, and (b) the ACP test would be performed separately for each company?

If one or more of the 3 companies could not pass 410(b) separately, but could pass if all 3 are aggregated, am I correct that: (a) there is a BRF issue that would be tested for current availability, and (b) the ACP test would be performed for the 3 companies on an aggregated basis?

Thanks.

I am trying to download an Aviator file into Relius with a QACA Match. The source code on the file is 180. Relius only supports codes through 179. Does anyone have any ideas how to complete a download with a QACA Match. I've tried going into the file and changing the 180 codes to a 149, but then the file completely errors out. Relius has also tried this, but has not had any luck.