Can a plan sponsor exclude Roth contributions when making the Safe Harbor matching contribution?

Our company recently started offering a Roth 401k in addition to the traditional 401k. I've been investing into the Roth 401k since January of this year. I finally looked back over the contributions, and saw that there has been no company matching on my contributions (should be matching 100% on first 4% of salary). Contacted payroll about this, and they responded: "You contribute to a ROTH account. There is no employer match on the ROTH accounts, only 401k contributions".

I looked over the plan documentation, and below is a summary of the safe harbor matching:

· You are allowed to defer a portion of your compensation to the Plan. These amounts are referred to as deferrals and are held in an account for you.

· You may make either Regular 401(k) deferrals (pre-tax) or Roth 401(k) deferrals (after-tax).

· In order to maintain "safe harbor" status, your Employer will make a safe harbor matching contribution equal to 100% of your salary deferrals that do not exceed 4% of your compensation.

I'm having a really hard time finding anything on my exact scenario, and I'm trying to avoid a PLR, so any help would be appreciated.

I have a plan which intends on investing/being a minority partner in an LLC which will manage property. They're starting with one parcel, so a QERP exemption is off the table. The investment in the LLC will be under 10% of assets.

The LLC, in turn, will lease a small portion, let's say under 20% of the building, back to employees of the Plan Sponsor.

I'm under the impression this is not a prohibited transaction. The LLC will manage the building, so the route I'm thinking is that this isn't a prohibited transaction because this doesn't constitute a plan asset under 29 CFR 2510.3-101 because the LLC will constitute a "real estate operating company." (takes breath)

This is one of those things where it just feels like they're removed enough to make this legal, but I just can't pinpoint why. Unless I just did, in which case I'm satisfied. I just feel like I'm missing something very simple regarding ownership percentage in an LLC, a de minimis exception, or something along those lines.

Thoughts? Thanks in advance!

Individual works for two companies. Each company has a SIMPLE IRA plan, and the individual has participated in both plans, reaching his annual deferral limit by putting some into each plan. One company ended their SIMPLE Plan, and the individual will not be paid enough in the other company between now and the end of the year to reach his annual deferral limit, even if he defers 100%. Can he put more in the second company's plan based on prior earnings in the current year?

I think a participant cannot defer retrospectively in a qualified 401(k) plan but I'm not sure about a SIMPLE IRA plan. And I can't seem to locate a cite even for the 401(k). Can anybody help with this?

Thanks.

Our ESOP is maintained by the Holding Company and the ESOP has borrowed from the subsidiary directly under the Holding Company. We are restructuring to put a new entity between the holding company and the current subsidiary that is the lender to the ESOP. Is it OK for the same entity to continue to be lender (the sub of the sub of the Holding Company that maintains the ESOP)? Or should be get the loan transferred to the new subsidiary?

A client established a brand new 401(k) plan effective 1/1/2016. According to this new plan, plan document,

· All service with the employer were counted for all purposes

· Service crediting methods for all purposes was elapsed time method

· Eligibility was 1 month and entry with 1^st day of the month following or coinciding for all contributions

· 2/20 vesting schedule

Six month later, 7/1/2016, this client decided to change the TPA and add a New DB plan. To simplify the combo plan testing, the new TPA changed Service crediting method with ultimately affected the vesting. According to the restated 401(k) plan, plan document

· Service from the effective date of the plan were counted for all purposes

· Service crediting methods for all purposes become Hours of Methods

· Eligibility stays the same for deferral but changed to 1 YOS with dual entry, 1^st & 7^th month, for Employer contribution

· 2/20 vesting schedule

The client financial advisor suggested it is ok to go with the restated vesting since this is the new plan.

I have hard time to buy client’s financial advisor suggestion in light of IRC §411(d)(6) anti-cutback Regulations. The reason is that 90% of the employees had at least 1 year of service and entered to the plan on the effective date of the plan, 1/1/2016.

I would think all full-time employees/plan participant will have at least 20% in their employer contribution by 12/31/2016.

Is this not the case?

I have a DC plan that allows terminated participant account balances between $1000-$5000 to be rolled over into an IRA without participant consent. The PPA doc does not address balances under $1000. Can these be cashed out without participant consent?

Hello

What are the cost benefits of converting a Defined benefit plan to a Cash Balance Plan? What are specific issues to watch out for when doing so? Thanks

So, deferral election is signed, isn't implemented properly, and 3 payrolls are missed.

No QNEC, but missed match plus interest must be contributed. Here's my question.

Say the participant signed a deferral form doing a flat dollar amount of, say, $50 per paycheck. Since it wasn't withheld for three paychecks, that's $150.00 her account is missing. So she does a special one-time deferral election to have $200.00 withheld from her next paycheck, then it reverts back to the $50.00 thereafter.

When it comes to calculating the make-up match, assuming the $200.00 amount doesn't cause it to hit any "cap" - am I correct in assuming that the only make-up will be interest on the match that should have been made each pay period? In other words, since she will receive her full match due to the special one-time deferral increase, there shouldn't be any additional match due, as she will already receive 100% of the match she would have received had the error not occurred. Or, is a make-up match required regardless of her special election? I lean toward the former, both from a common sense viewpoint, and the general overriding principle of self corrections which is to put the participant in the same position they would have been otherwise.

The amounts involved are negligible, but I'm thinking more in procedural terms if something like this occurs on a larger scale.

Hello,

I have a plan where an owner borrowed money from the 401k Plan to help cover business expenses. They were given instructions to deduct the loan payment from the employee and make regular payments.

What actually happened was the company was making the loan repayments on the loan.

This has been going on for a year.

In need advice in correction:

Thought 1) The plan has been made whole, but source of loan repayments were incorrect. Have the company have all loan repayments run them as income to participant and participant can amend taxes and company can amend taxes.

Thought 2) Since this was not allowed reverse all loan payments plus gains-losses to company and default the loan for missed payments.

I have an owner of the company who withdrew $70,000 from a pooled profit sharing account in 2015, no 1099 was prepared and no taxes were withheld. The plan does not allow for inservice withdrawals. The owner is over 59 1/2 and he has enough in his account to take the distribution. Can this be self corrected since it is before the end of the 2nd plan year? What are his options? Insignificant? Significant? He would like to return $50,000 to the plan and pay the remaining amount in installments. He does not want the CPA to prepare a 1099 for 2015 and pay taxes, penalties. There is one other person in the plan and the Owner has maxed out on his loans.

Random employee of a big company walks into a brokerage company, opens a 401k plan and puts in a contribution for 2015. No SE income, just W-2 from big co.

408d 4 & 5 provide solution for SEP-IRA. Is there something similar for qualified plan?

Brokerage company is telling him he can't take it out.

I am trying to avoid calling it a 415 violation or some such. I want to say there was never a plan and just kick out the money and close the account.

Money has never been deducted, 2015 taxes are not filed yet.

Thanks for any ideas

Participant retires Monday. Submits distribution form to roll over to an IRA on that same Monday. The form is faxed over to the provider let's say on Wednesday. He dies on Friday (poor guy...) and the rollover is processed by the recordkeeper on the following Tuesday or Wednesday, after he was already deceased.

The good news is that the beneficiary in the Plan and the IRA beneficiary are one and the same. But has anyone ever had this before? Is the rollover invalid because he was deceased at the time of processing? Thank goodness the beneficiaries are the same, but assume for the sake of discussion that they are not.

I am aware that there are similar threads already started (e.g., benefitslink.com/boards/index.php/topic/58007-100-deferral), but they all seem to gloss over the particular issue I'm focused on.

My question is: Where a plan permits a participant to defer up to the maximum amount that will not cause a 402(g) or 415 violation, and a participant elects to defer 100% of his compensation, can the plan administrator administratively apply the deferral election to compensation after payroll taxes and other similar deductions, absent something in the plan document to this effect? That approach seems a little aggressive to me, but I'm guessing it happens frequently when someone defers 100%.

Employer with many drivers provides access to counseling for alcohol issues by means of an Employee Assistance Program. But rather than offering the EAP in the standard manner, they pay for it on a per use basis with HR approval, without promoting it company wide, though in theory anyone from the company can request approval. Think this would this be considered an ERISA benefit?

We have a client that has maintained both a Union Plan and a separate 401(K) plan for their Salaried Employees for many years. The question has arisen from the financial advisor as to whether the plans can be combined to obtain a better price with a new recordkeeper/custodian. Here are some quick details that I am hopeful can help with some advice.

Salaried(Non-Union) Plan- 1 HCE, 5 NHCEs Salary Deferral Only- No Employer Contributions have been made for years

Union Plan- 15 NHCEs Salary Deferral and an Employer Contribution collectively bargained based on number of hours worked.

My concern with combining plans would be Union individuals receiving an employer contribution while Non-Union employees receive no employer contributions.

Any input is greatly appreciated.

Thanks!

Client wants everyone either "in" for 7% or out at zero, nobody allowed to defer 1, 2,3,4,5 or 6%... Can't say I've ever had anyone ask me that before. Do-able?

Thanks in advance!

The client's last payroll, a participant reached the $265,000 compensation limit. However, he did not reach $18,000. As of the last payroll, the participant deferred $14,500 and hit $265,000 in comp.

They do payroll in house and believe that since he has not reached his deferral limit for 2015 deferrals can continue, however, he will not receive any match on the deferrals since he is at $265,000

Question, - I realize the $18,000 is an individual limit and the $265,000 is a plan limit, But if the participant has reached is compensation limit, can deferrals be withheld from his pay??

My thought was the participant is out of luck and can only defer $14,500 for 2016. But I am questioning my thinking.

Thoughts

I'm concerned about the taxation of this beneficiary designation. I don't know why, but the IRA owner named his Living Trust as his IRA beneficiary. There is no language in the Trust addressing the receipt of IRA money or discussing the creation of an Inherited IRA or giving the Trustee the right for the Trust to disclaim the IRA proceeds. The Trustee of the Living Trust is the son of the decedent, he son is age 50, the decedents only child, and he is the sole beneficiary of the Trust.

What happens when these IRA proceeds are paid to the living Trust? Will the Trust owe the income taxes? It's a traditional IRA and is fully taxable.

Thanks.

Can someone tell me whether this IPS is required or just suggested?

If required, who prepares it normally, and is there a generic version with some fill-in the blanks or is each plan's IPS custom?

Does anyone have a sample?

Thanks

Hi All -

I recently saw 403(b) Plan documents stating that that it is a non-ERISA Plan. I am looking for some clarification related as to whether it is in fact a non-ERISA 403(b) Plan. (The documents were from 12/2008.) The documents state:

WITHDRAWAL RESTRICTIONS: Except in the case of hardship, disability & distributions [from a separate account under a TSA for rollover contribution...] no distribution will be made to a Participant under any TSA maintained under the Plan until the Participant has attained age 59 & 1/2 or had severance of employment with Employer ... whichever is earlier.

HARDSHIP WITHDRAWALS: As part of its certification, each Provider must agree that it will not approve any hardship withdrawal unless the participant has provided the Provider with specific information to support the existence of an immediate & heavy financial need that qualifies for hardship withdrawal and the amount necessary to meet the financial need. In the absence of information to the contrary, the provider may rely on a Participant's representation that the immediate & heavy financial need may not be reasonably satisfied from other sources. However, the Provider must promptly notify the Employer (or designated representative) of any hardship withdrawal by a Participant. The Employer will notify the Provider if the Employer has information inconsistent with the Participant's hardship request, and the Provider must agree to take corrective action if so notified. A Participant will not allowed to make salary reduction contributions during a 6-month period commencing no later than 30 days after the date such Participant receives a hardship withdrawal under a TSA.

DISABILITY: As part of its certification, each Provider must agree that it will not make any distribution to a Participant by reason of disability unless the Provider has received satisfactory evidence that the Participant has become disabled within the meaning of Code section....

While it appears that the language in the documents is statutory in nature, I want to be certain that the Plan document(s) are not violating the rule that "all rights under the contracts & custodial accounts are enforceable only by the participant" as is required for non-ERISA PLans.

What do you think?

Also, if you think the Plan is non-ERISA, do you believe that no Form 5500 needs to be filed, even if the total PLan assets exceed $250,000 (over $500,000) w/ 15 paticipants?

Your comments are appreciated.

JD