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?

We are a CPA/TPA firm. We have just taken over a tax new client. They asked us to prepare the Form 5500-EZ for their solo 401k. It turns out they should have filed for 2013 and 2014 as the assets exceeded $250,000 in 2013.

Typically, we would prepare and e-file the Form 5500-SF and mark one participant plan. However, I believe the penalty relief for the EZ form requires a paper filing.

Should we paper file the 2015 Form 5500-EZ? or use the one-participant Form 5500-SF and e-file?

All thoughts and suggestions appreciated.

How do people feel about using EPCRS SCP to retroactively add a participating employer if the related employees were allowed to participate?

The entity was small relative to the existing employer and all were NHCE's.

The SCP for this appears tor reference situations where employees were allowed to participate before completing the initial eligibility age/service requirements. It just seems like this issue is so materially similar that it would pass muster.

I have always told people someone is eligible for the plan with respect to the first pay-DATE on or after plan entry date. I'm thinking their must be an article or something on point clarifying that when compensation is earned is not relevant, it is when it is received that matters.

Any help appreciated cuz it comes up all the time...

I am wondering if anyone knows of a "best practices" type of resource for operating multiemployer DC plans. I've kind of been dumped in the middle of managing a multiemployer DC practice that needs some modernization, and I don't know where to begin!

Any help is appreciated.

I am working on article for a benefits class in which I am enrolled and need some data. I am not an actuary nor do I have an actuarial model but am hopeful that a member can assist. I would like to know the sensitivity of returns of pension plan trusts.

For a typical trust, what is the project long-term rate of return? Say it is 7%, what is the company’s pension liability? What happens when the rate is increased to 8%, 9%, 10%, 11% and even 12%? If anyone has a live dataset and model and could provide this information as a favor, I would truly appreciate it. And, if the article ever gets published, I would of course give attribution and the possibility for additional input into the project.

The article is due in just a few days and this information would be quite useful. I would appreciate any help that you could provide.

It's late Friday in the heat of extended 5500 season, so perhaps I'm not thinking straight...just need to bounce this off someone.

Situation:

Xtested Plan; highest rate to HCE = 20%

NHCE's receive 10%

Comp counted from date of entry

Conclusions:

Therefore all NHCE's receiving an allocation must receive at least 5% since 1/3 of 20% > 5%.

At 10% that's all fine except for new participants.

Is it correct that they must receive at least 5% of full year comp?

Where I'm fuzzy is if there is some 1/3% test we can apply to each participant?

If the Employer began in March of 2016

1- can their new plan have an effective date of 01/01/2016 for a calendar year?

2-does it matter what type of entity they are- ie corporation; sole prop etc

I know IRS said at 1997 ASPPA it's ok- but I am getting push back from my company's doc dept

A retiree has been receiving a retirement benefit based on his election of the 10 year certain only optional form of benefit over 10 years ago.

Is there any sample letter out there to inform a retiree about the coming of the end the 10 year certain only optional form of benefit?

We have a QDRO filed with our divorce. I am wondering when is that the ex is able to start collecting.. When we divorced I was at my 25 year mark at work. She gets approximately 7 years worth of my pension.

Now I am reaching my 30 years, when I am allowed to retire if i wish, but I am not.

Does the ex wife have to wait until I start collecting in order to collect from her portion or can she start when I would be eligible if I chose to at my 30 year mark?

New client discloses the following information during year end administration:

4 partners receive schedule c income and maintain their own individual SEP's. All 4 have contributed the max for the past several years. The SEP's are set up using the IRS model, not a prototype document. All compensation to the partners is paid via the plan sponsor of the 401k plan.

The company maintains a 401k plan with a discretionary match for 50 employees, all of whom are eligible. The partners do not participate in the 401k. The 401k has been in existence for several years. The partners have been maxing out in the SEP while providing employees with just a match dating back at least 5 years.

Question: How do they fix this? Do they go back and fund i.e. 25% contribution to all employees to the 401k or under the SEP? Are the SEP's disqualified?

Thank you

Calendar year small plan had a short plan year in its first year(10/1-12/31). However, deferrals/match did not commence until the first payroll in November. No QACA or auto enrollment, just basic safe harbor match. Regardless of whether the plan sponsor failed to permit or implement a deferral election, the correction will be made by QNEC or is there an issue with the fact the plan while in existence legally for 3 months was not funded for 3 months?

https://www.irs.gov/pub/irs-drop/rp-16-51.pdf

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?