This Notice seems to me to lack some clarity. My question is this:

Suppose you have a plan where the owner is over 70-1/2, and has therefore been taking his benefit as required under the RMD rules. Now the plan is being terminated.

Can he now receive his remaining benefit as a lump sum? The Notice doesn't seem to address this squarely, and it seems like it could be read t prohibit it, which is ridiculous. It also appears that the proposed regulations haven't even been issued? If not, can this notice trump existing regulations retroactively to 2015?

The instructions for Form 5500 Schedule C Part III state: “Complete Part III if there was a termination in the appointment of an accountant . . . during the 2015 plan year. This information must be provided on the Form 5500 for the plan year during which the termination occurred.”

Consider the following typical situation. A plan’s administrator and an accounting firm make engagement letters for only one year at a time. The accounting firm (which writes the engagement letter for the client’s adoption) never obligated itself to be available for anything more than one pending audit. The administrator never obligated itself to the accounting firm for anything more than one pending audit. During 2014, the accounting firm completed its work in auditing the plan’s 2013 financial statements and issued its report; and the administrator accepted the report as a satisfaction of the engagement. In 2015, the administrator invited several accounting firms, including the one that in 2014 audited the 2013 statements, to submit proposals. The administrator selected another accounting firm.

On those facts, was there “a termination in the appointment of an accountant”?

Which facts are significant in deciding whether there was or was not a termination?

Has EBSA published any guidance on this?

Has the AICPA published any professional literature on this?

We are reviewing a plan for possible take over. There are no HCEs and only three of the about 40 NHCE participants are receiving an employer base allocation where each participant is their own allocation group. If there are no HCEs, is that kosher? Thanks.

Trying to set up a 401k Safe Harbor plan. I know that a plan passes the top-heavy test as long as no other contributions are made during the year except for Elective Deferrals and the Safe Harbor Non-Elective/Match.

Question is, will it still pass the Top Heavy test if their are After-Tax contributions. In other words are After-Tax Contributions considered elective deferrals?

Everything I'm ready only states elective deferrals and nothing about after-tax.

Thanks

Let's say a plan has autoenrollment, and someone decides to opt out after $20 is taken from one paycheck.

What are the mechanics of his refund, is it a normal distribution or is payroll reversed?

I have never seen this before. I have seen comp before Participation being excluded. If the plan has a 1,000 hour requirement for discretionary non-elective, is it legal to exclude hours before Plan Entry?

A participant who has been taking required minimum distributions dies, her beneficiary takes one RMD on the deceased participant's benefit the following year and is then paid the remainder of the benefit the year after that - would that last payment be considered a lump sum distribution for purposes of line 3?

Question if a plan chooses to amend their safe harbor to have a 1 year wait, but leave the deferral portion with immediate entry, do we need to test those individuals in the ADP/ACP because they didn't receive a safe harbor for not meeting the service requirement yet?

What other pitfalls are there for putting a one year wait on the safe harbor other than the top heavy concern which would negate the 1 year wait we are aware of.

Suppose a plan sponsor had been issuing company stock as a form of match contributions to employees who deferred into their 401k plan. Now suppose the plan document provisions do NOT list this type of match, and the stock certificates were not listed in the name of the plan. Keep in mind that while these WERE match contributions, they were also NOT officially part of the plan.

By offering these employer stocks, has the plan sponsor violated the Contingent Benefits Rule? If so, how can this be corrected, as this type of violation is not listed under the VCP covered transactions?

We have a 401k Plan where the owner of the company has never received a payroll check or been listed as an employee in any census records. He has owned the company for over 10 years.

They always fail ADP testing. They want to know if he starts getting a payroll check in the last quarter of 2016 and does not defer, can his compensation for 2016 be counted in the HCE group to help with passing the ADP testing.

My first question is what is his real hire date? Their plan has a six month wait; no age requirement, and monthly entry. Second question, is when is he really eligible to participate in the plan? 2016 or 2017 after he meets 6 month eligibility.?

Any comments would be welcome.

We have a company that offers a wellness incentive, which is a dollar amount based on years of service to be used towards medical premiums or reimburse certain wellness items such as gym memberships.

This incentive is reported on W-2 and their plan document states to use W-2 income and does not exclude any type of compensation. They would like to amend document to exclude this wellness incentive from compensation. Could this type of amendment be done retroactively to beginning of current or prior year? (This is not a Safe Harbor plan).

Assume a corporation has a fiscal 9/30 year end, but it sponsors a DB pension plan with an 11/30 year end. And the contribution for the 11/30 plan year is $120,000, which is deposited before the due date of the 9/30 tax return.

How much is deductible on the 9/30 tax return? The full $120,000, or 10/12 x $120,000?

And does the answer change if the owner (who has most of the income) took the bulk of his income during November (after the corporate year end)?

Any help is appreciated. Thanks, Greg

Are there legal reasons why a Buyer may request a Seller to transfer its health and welfare benefit plans immediately prior to a stock deal? (Similar to typical provisions in stock purchase agreements where buyers may request a seller to terminate their 401(k) plans just before closing because of the 401(k) plan rules?)

That is a new twist on me but I can imagine there might be particular types of health and welfare plan offerings (e.g., some HDHP, HSA arrangements, etc.) that could potentially cause conflicts or issues for Buyer's general plans if the Buyer has those within its controlled group for a particular plan year (even if momentarily and the Buyer otherwise intends to terminate those plans).

If that is the case, can anyone provide a brief explanation of the issues and types of plans impacted?

Thanks

My apologies if this has been asked and answered; I haven't seen it yet.

Employer offers coverage to all employees working 20+ hours per week, with employee cost and coverage options identical regardless of hours worked. New employee in initial measurement period working 20 hours per week transfers to a new position that would have been 30+ hours per week if new employee had been hired into it. New employee is not yet in the administrative period.

Does the employer have to re-offer coverage, consistent with the ACA timing rules, when the employee moves to the new position, or is the initial offer of coverage when hired into the 20 hour per week position enough for the employer to avoid an ACA penalty?

Thank you for any insights!

I have a husband and wife with multiple companies that both want to be in a cash balance plan. They are both physicians. The wife owns 100% of of a management company. The wife also owns 100% of her MD, LLC. Her husband also owns his own MD, LLC. Both MD, LLC's pay management fees to the management company and the wife receives compensation from the management company.

I believe the management company creates an affiliated service group with the 2 MD, LLC's. Can it also be a controlled group?

The management company is shutting down and will cease to exist. Can I set up a plan under the wife's MD, LLC and include compensation from the management company as long as it is still around? After the management company shuts down, can I maintain the plan as a controlled group between the 2 MD, LLC's as they have attributed ownership due to their marriage?

IRS auditor is telling our client, a large college, that the students who work in the summer and continue to be excluded from 403(b) Plan while wages are not exempt form FICA must be offered participation in the Plan for elective deferrals, and is requiring make up missed 403(b) deferrals. This impacts more than the year under audit (2014). All students were enrolled full time in spring and fall semesters, and majority have wages that will result in make-up contributions of <$75. Fear if we agree to correction, they will go back to 2009. They will correct practice prospectively (in summer 2017).

Has anyone else had this issue raised? We have had DOL and IRS audits of other colleges where this issue was never mentioned.

The QDRO says nothing about our distribution fee. It says to give the alternate Payee $5,000 +G/L form August 12, 2016. Do you think we can take half of our distribution fee out of her $5,000?

I am familiar with the new regs about adding ABA to all fully insured plans. Our self-funded plan currently offers some ABA therapy for speech, etc. However, we don't cover the full ABA treatments such as diagnosis, therapy, etc. since it would cost the plan $500,000-$1,000,000 a year for mid size company. In your professional opinion, could this be treated like OT/PT with number of visits being limited (20 visits a year) or maybe some other kind of other limit? Also can we limit it by age such as for children 5 and under since they would get free services through public schools (depending on the state)?

12/31/2014 - Sole Prop and 1 W-2 EE

During 2015 - EE terminated and paid out

12/31/2015 - Sole Prop is only Participant in plan

Can SProp file an EZ or one more year of e-filing?

Can't find anything in the instructions to answer the question.

Thanks

I've never heard this before - another TPA is saying you don't have to file an 8955-SSA if the participant has less than a cash-out benefit.

I've never heard this before, and I suspect what they really mean is perhaps they don't normally report, under the assumption that the cash out benefit will be timely distributed, under the terms of the plan.

But, it seems to me that if they don't get it distributed, then there's no exemption from 8955-SSA reporting just because it is less than the cash-out amount.

Anyone else ever heard anything like this?