Participant leaves company mid year and joins new company. Contributes 18k in first plan and 10k in new plan. They are not catch-up eligible. They receive match in both plans. First plan balance rolled out to IRA.

When they contact the TPA to request the excess 402g refund, do they get to keep the match attributed to their excess deferral in the new plan or does the match have to leave their account (forfeited)?

100% owner in a DB plan turns 70-1/2 in 2016.

Rather than beginning payments as of 4/1/17 of the accrued benefit has anyone had experience with the procedure for using the individual account method for the RMD instead? The Pension Analyst from October, 2011 seems to say you can:

"If a participant who has reached his RBD takes a single sum cash settlement of his benefits, the MRD portion of the payment (which cannot be rolled over to another qualified plan or Individual Retirement Account) is typically determined using the rules that apply to defined contribution plans. However, effective for plan years beginning in 2006, the final MRD rules for defined benefit plans allow plans to determine the MRD portion of a single sum cash settlement by using either the rules that apply to defined contribution plans or the rules that apply to annuities. Plan sponsors must incorporate in their plan document which rule they elected. The final MRD rules for defined benefit plans were discussed in greater detail in a November 2005 Pension Analyst."

Link: http://www.retire.prudential.com/media/managed/Defined_Benefit_Plans_10_11.pdf

If so,is it possible to use the PVAB as of 1/1/16 divided by 26.5 as the 2016 RMD? Then how would this get done? Can the PVAB stay in the DB Plan, possibly as a separate account? How would future benefit accruals handled?

Thanks in advance for any input.

A plan sponsor wants to start charging participants $75 to initiate a loan. They want the participants to pay the $75 by payroll deduction and forward that to the TPA. Are there any issues with paying the fee by payroll deduction rather deducting the fee from the account?

Thank you for any replies.

I am in the process of finishing a QDRO with my ex-Husband. It has taken some time. The original 401k company was changed to a new company for my exhusband. I need to find out the amount of earnings on his 401k from the time our divorce until this summer.

I need to know earning from 9/8/11 - 6/30/16

9/8/11 closing balance including loan and deemed loan balance = $64,641.55

9/8/11 loan balance = $7,254.40

9/8/11 deemed loan balance = $17,265.37

Contributions from 9/8/11 – 6/30-16 = $67,229.79

Loan Payments from 9/8/11 – 6/30/16 = $7,721.34

Amount that transferred out on 6/30/16 = $153,119.76

The award was for $25,987.09 as of 9/8/11 including earnings until date of segregation.

Any help that any could offer would be greatly appreciated. (Basically I need to know what amount I am owed in addition to the award amount of $25,987.09)

2015 AFTAP certified timely at 85%

at 1/1/2016, AFTAP is presumed to be 85%

at 4/1/2016, AFTAP is presumed to be 75% (85% less 10%) since actual 2016 AFTAP has not been certified.

in order to avoid lump-sum benefit restriction, a presumptive burn occurs on 4/1/2016. to get the presumed AFTAP to 80%, lets say $20,000 of the prefunding balance is burned.

in July 2016, actual 2016 AFTAP is certifed at 82% taking into account 2015 contribution made in June 2016. this is the final certified 2016 AFTAP.

when preparing the 2016 Schedule SB, is there a deemed burn equal to $20,000 on line 12? or since the actual 2016 AFTAP is certified at 82%, the presumptive burn equal to $20,000 is disregarded?

im having trouble figuring out how the presumptive burn impacts the 2016 Schedule SB.

I am looking for a reliable service to which i submit complex plan questions usually to attorneys who then provide a response for a fee. I know a number of groups offer this type of service..TAG data, ASC, ErisaPedia, etc.

The most important aspects of what i am looking for are 1. accurate responses preferable by an attorney and 2. timely response. The fees must be reasonable but i am willing to pay more for a service that is both accurate and timely. By timely i would say 24-48 hour response time.

Does anyone have experience with these types of services and which ones do you find particularly useful?

Due to error in payroll reporting, 10 employees were not allocated employer contribution for the initial plan year, i.e., a calendar year plan established in 2015.

These employees are going to receiving non-elective employer contribution now, i.e., in November 2016.

How do we report this contribution on Form 5500?

Should it be reported on the 2015 Form 5500 or on the 2016 Form 5500.

From my reading, it appears that these contribution will be part of the 2016 limit, i.e., for the purposes of 415 as well as 404.

Does this limitation apply to deferrals, too?

4 plan participants deferral contribution deducted from their respective 2015 earnings were not deposited to the plan until this time . Unfortunately, from one of the participants, an HCE, $18,000 was deducted from his 2015 earning as deferral contribution but only $16,500 was deposited during 2015. The plan is correcting the error by depositing the $1,500 including the lost earnings now (October 17, 2016). Does this $1,500 count against his 2016 402(g) limit?

We took over the administration of a profit sharing plan in 2011. A QDRO was written in 1987 awarding 50% of a participant's benefit to an alternate payee. In 1990, the participant was paid about $6,000, but the alternate payee received nothing. The participant subsequently passed away. Now the alternate payee is asking for her benefit. The plan sponsor claims that $6,000 was 100% of the benefit. We don't have sufficient document to prove whether $6,000 was 100% of the benefit or 50% of the benefit. In fact, we don't have any reports for the plan prior to 2003, so we can't really estimate what the participant's benefit was in 1990. She is threatening to get her attorney involved. Can anyone opine on what the outcome would be if she pursued this matter legally?

Thanks for any responses!

PSP is terminating. However, the plan sponsor did not withhold 20% from distributions. There are residual earnings that are left to be distributed but not enough to cover the taxes. Do you instruct the participants to cut a check to the plan sponsor for the taxes or are do they report it on their personal 2016 tax return?

A wife has run a company for the past 8 years as a single member LLC. The LLC establishes a qualified 401K plan of which the husband rolled his 401K after becoming an employee. The wife's Plan states if an employee quits or is fired the Trustee ( who is the wife per The Plan) controls the 401K investment decisions. The husband was then let go. The husband then setup his own partnership LLC of which the wife's 401K Plan invested in with "for the benefit of her and for the benefit of the husband's," 401K funds from her qualified Plan. We believe this structure is legal given that the wife's company's 401K Plan is written to allow these types of alternative investments and that there is no attribution between husbands and wives to create a disqualified or prohibited transaction.

The wife's business has no business dealings with the husband's business and the wife is not compensated in any way by the husband's business. The wife has helped in the husband's new business with marketing and the like but this is being done on the side and is separated from her main, profitable business.

The wife's 401K Plan has a TPA who files form 5500 and drafted the Plan documents. All of the funds that were rolled into the wife's 401K Plan are now invested in the husband's business. A valuation of the husband's business is done yearly to establish value of each membership held in the 401K plan of the wife's business.

The operating agreement for the husband's company states how the memberships get sold back to the wife's 401K once the business returns double the original investment.

Can anyone comment on this structure as it relates to being a prohibited transaction?

Did the IRS give ANY indication of when document approval might be expected? I'd sure love to be able to start planning next year's work projects....

Employer A requires 30 hours eligibility for health insurance, and offers FSA. Employee of A works 20 hour weeks for Emp A, but is covered under Spouse's Employer Health Plan. Can Employer A allow 20 hour Employee to participate in A's FSA?

Say that an ERISA attorney has a plan sponsor adopt a volume submitter plan that has just enough modifications to it to support a determination letter request (intentionally), but not enough to render it an individually designed plan.

Then, some time after receiving the letter, there is an an amendment, but not to the modified content. Is the plan sponsor eligible to apply for a new determination letter?

We are seeing lots of imaginative ways to get around the usual restrictions on getting a determination letter on a pre-approved plan or an amendment to an individually designed plan.

Never heard this type of corporation.

How does this work when it comes to retirement plans (i.e., sponsorship, wages, etc.)? I'm taking over qualified retirement plans for a one-person plan.

From what I've read, the corporation is established and employs the person. The employee is then paid by the corporation. I'm assuming the corporation sponsors the plan.

Who owns the corporation?

Thanks

Non-profit organization has several semi-permanent part time employees to do fill-in for vacations, sick leave, scheduling etc.. They want to use one for a longer term fill-in that would put them over 1000 hours in the current plan year then return to part time in the following year.

Plan calls for 1000 hours/one year eligibility.

Is there any simple language that could be added to the document that would allow this?

I was under the impression there is a 12 month window between the time an employer terminates a 401(k), and establishes a new 401(k).

Is there such a cite and where?

I have a heavy hitter of a broker I deal with that is telling me her checked this out, and, as long as the existing plan is terminated and everyone rolls over to an IRA before 12/31/, the employer can establish a new 401(k).

Sponsor wants to amend the SEP to make eligibility more restrictive. Can that be done midyear, or does it have to wait until the start of the new year? I don't know yet what kind of SEP. Thanks.

Employee elects family HMO coverage. Has a new child mid-year. Cost of plan to the employee does not change as he already has family coverage. As a result of the birth, now wants to change to High Deductible plan because premium is lower.

Some here say changing plans in this case is not consistent since there is no change in cost or coverage. Others say birth is a "free pass" for whatever you want to do. Plan document is generally ambiguous, thus providing no specific guidance.

What's your take on this request? Any cites appreciated. Thanks for your input!

I could use some input on how to correct this unique situation please...

An employee was deferring pretax $750 per paycheck and submitted a request on 3/15/16 to change the election to $350 pretax and $10 roth. The change was not actually implemented until 10/31/16.

The employee confirmed that they would like the contributions returned.

Would you return $390 per paycheck and recategorize $10 as roth and have the client fix payroll to add $10 of her pretax as taxable wages since a 1099 will be issued for the $340 being distributed?

Any suggestions?

This might be old news to some; I've never seen it before.

Sponsor has more than one DB plan, and is planning to offer a VT window in both plans. Is the Settlement threshold (service cost + interest cost) based on (a) the sum of all plans, or (b) per-plan basis?

I can see an argument in favor of (a) or (b). Anyone with experience on point?