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?

Hi,

Have the 2017 limits officially come out for FSA's, Transit and Parking?

We have a plan for a company that went out of business in 2015. Plan terminated, and final distributions were done in 2016.

However, the forfeiture account was never liquidated. There are no more fees to be paid.

How do I reallocate the forfeiture account now, being that the date for which annual additions for 2015 has passed on 10/15. I obviously have no comp for 2016.

Do I just reallocate it on 2015 comp and move on?

The MEWA definition in ERISA 3(40) (29 USC 1002(40)) provides that a MEWA is an employee welfare benefit plan established/maintained for the purpose of offering/providing any welfare plan benefit to the employees of two or more employers (including one or more self-employed individuals)...

My question is how to define "self-employed individuals" for MEWA purposes. 401© defines the term, but I'm unsure whether that can properly be incorporated into the MEWA definition.

Thank you in advance for your assistance.

Can someone point me to some guidance that says if I want to have a plan effective 1/1/2017 I can send out my initial notices after 11/1? I get that for an existing plan I need to have the notice out by 11/1 but it seems to me that if the plan does not yet exist there should be some room.

This is what it says under 408(p):

© each employee eligible to participate may elect, during the 60-day period before the beginning of any year (and the 60-day period before the first day such employee is eligible to participate), to participate in the arrangement, or to modify the amounts subject to such arrangement, for such year.

The IRS FAQ's don't seem to address what to do in November and December. And I can't find any articles!

Company with 10 employees fails to file a final 5500 in 2013. In 2015 they receive letter from IRS stating the 2013 5500 was not received. Company responds to IRS by sending IRS a 2013 5500 EZ, signed and dated in 2015. The 2013 5500 shows $0 for the beginning of the year assets and 0 employees in the beginning of the year. Company gets letter from IRS assesing $15,000 penalty.

I was going to amend the erroneously filed 5500 and ask IRS to reduce the penalty to $750. Thoughts? Thanks in advance.

So it has been discovered that payroll did not make the percentage change for 2 participants. Both participants increased their deferral contribution but the increase never happened. As a result we need to make the monetary correction on each participant's behalf.

My question is... do we need to give these 2 participants a notice stating what we are doing to correct the issue? If so, does anyone have an example?

Thanks

Participant has a life insurance policy as an asset in her 401(k) account. (Plan is the owner.)

It is my understanding that the ownership of this policy can be changed from the plan to the participant/individual. The participant would be taxed on the cash surrender value. Is this correct?

If this is correct, can the cash surrender value be “counted” as part of her RMD due for the year?

Example: Participant’s RMD for 2016 is $10,000. Cash surrender value of life insurance policy is $2,000. The plan would issue a distribution check in the amount $8,000 to the participant. Is this permitted?

Thank you.

What charges, if any, do you put in the SAR for copies of the paper 5500 for the per page and full copy items?

I usually put $0.25/page and $0.75/$3.00 for full copies of SF/5500, respectively.

What you you put in your SARs?

I just read an email where the person was telling a client that fiduciary relief under 404© is fiction (no plans comply), and that benchmarking is required by law. To be clear, the email did not say 404© Protection is hard to get. It does not exist? Also, while benchmarking makes sense for reviewing your Plan, required by law? Where is that cite?

Client is looking at changing cafeteria plan (currently part of a wrap document) to a POP (premium only plan) as they no longer have a Flexible spending account. They currently file 1 tax return with all the wrap benefits.

They've been advised no need to restate and amend the cafeteria plan but just to terminate the plan and adopt a new plan. Is it a simple resolution to make the change or is there a need to send out notices to the participants? Plan is funded by general assets of the employer and insurance, over 500+ employees.

In addition, do the form 5500 filing requirements follow the wrap plan and not the cafeteria plan....so that in this instance no final form 5500 would be filed as the wrap plan itself is still the same.

Thanks for any help!

Sorry if this is a newb question, but any help would be appreciated- given the new overtime rules going into effect I am concerned about some clients increased responsibilities if they don't exclude overtime

my question is - If you only exclude overtime for matching contributions, do you still run compensation test? If so- assuming you pass - do you use that for ACP? or is there flexibility? I really want to make sure of what happens if we are only making a compensation adjustment to matching contributions.

Thanks

looks like the IRS has decided we don't have to answer all those extra questions in 2016.guess they still haven't gotten approval for them yet!
from their website:
https://www.irs.gov/retirement-plans/irs-compliance-questions-on-the-2015-and-2016-form-5500-series-returns


IRS Compliance Questions on the 2015 and 2016 Form 5500-Series Returns

The IRS added compliance questions to Forms 5500, 5500-SF, 5500-EZ and Schedules H, I and R. The IRS has decided that filers should not answer these questions for the 2015 and the 2016 plan years when completing the forms:
•Form 5500
Preparer Information (page 1 bottom)


•Schedule H ◦2015 plan year: Lines 4o-p, 6a-d
◦2016 plan year: Lines 4o, 6a-d



•Schedule I ◦2015 plan year: Lines 4o-p, 6a-d
◦2016 plan year: Lines 4o, 6a-d



•Schedule R ◦2015 plan year: New Part VII (Lines 20a-c, 21a-b, 22a-d, and 23)
◦2016 plan year: Part VII (Lines 20a-b, 21a-b, and 22a-b)



•Form 5500-SF ◦2015 plan year: Preparer Information (page 1 bottom), Lines 10j, 14a-d, and New Part IX (Lines 15a-c, 16a-b, 17a-d, 18, 19, and 20)
◦2016 plan year: Preparer Information (page 1 bottom), Lines 14a-d, and Part IX
(Lines 15a-b, 16a-b, 17a-b, 18, and 19)


•Form 5500-EZ
◦2015 plan year: Preparer Information (page 2 bottom), Lines 4a-d, 13a-d, 14, 15, and 16
◦2016 plan year: Preparer Information (page 2 bottom), Lines 4a-d, 13a-b, 14, and 15

Page Last Reviewed or Updated: 05-Oct-2016

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

good grief, I can hear you crying and moaning way down here in Florida, and I've hardly even posted this. Get over it and deal with it already!

Participant completed and timely turned in the enrollment form. Deferral election was properly entered into payroll however enrollment form was not forwarded to vendor for investment election set up. Consequently participant was default enrolled for investment when deposits arrived. Contributions have been made timely since June to the participant account in the default investment.

Any one know if there is a stated correction or example correction for this error? Since it isn't a missed deferral opportunity I couldn't find anything on point. Is there even a required correction? It seems there would have to be because the Client made the error.

Client would like to compare earnings from default investment with the earnings from the participant investment choices and make a corrective contribution for the difference, if applicable, which sounds reasonable. That will "put the participant in the position he/she would have been in had the error not occured".

thoughts?

Participant A passed away. His beneficiary is nephew B, who happens to be 8 years old. Father C is the father of participant A and has custody of nephew B.

I would expect that the distribution form would be send to Father C who would take the distribution on behalf of nephew B. Is that correct?

Also what documentation would you recommend that we get to prove Father C has custody of nephew B?

Does Elective Deferrals under Sec. 408(k)(6) (SARSAP) added back to the elective deferral under Sec. 401(k) Plan when performing the ADP test?

Background information:

Reviewing a copy of the 2015 Form W-3 totals (under the summary of W-2 Data) for a new prospect, I have learned that there are both Code D (with 35 employee count) and Code F (with 12 employee count) for box 12.

It appears that this new prospect established a new 401(k) plan in 2015 when the number of eligible employee goes over 25. For part of the 2015 plan year; however, this new prospect some employees deferred under the 408(k)(6).

From my reading of ERISA outline book Chapter 11 that goes over 401(k) vs. SARSEPs, the deferrals in both plan needs to be added to make sure the total doesn't go over the 402(g) limit. Also, ADP test for the two type of plan is very different.

But I’m still not 100% sure whether I should use the total of the two different plan deferrals for my ADP test as I should do for 402(g) limit test.

Situation is you send out the notices & get nothing back in 30 days. You review the terminated Participant account & it's under $1000. You can't send a check to nowhere & most providers won't build IRA's under $1k.

Does anybody have a go-to provider that CAN build an IRA under $1000 & get these people out of the Plan with a Trustee to Trustee rollover? Full disclosure--We have one such provider now, but I'd like options...

9/30 PYE

3% ER Safe Harbor

Cross Tested with two groups

There were two employees (NHCE) that received QNEC contributions due to a missed deferral opportunity.

Where do these QNEC contributions come into play when calculating the cross tested profit sharing allocation?

How does relius handle the QNEC contributions when calculating the cross tested profit sharing allocation?

What should I be looking/checking to make sure the calculation is being done correctly?

What are the ramifications of a company that has a SIMPLE 401k in place, and sets up a normal 401k plan in the same year. I know you cannot have any other plans if you have a SIMPLE 401k.

Would that disqualify the entire SIMPLE plan or just the current year contributions? Would it only affect Highly Compensated employees, or everyone?

thanks in advance