Looking for any suggestions on how this fact pattern is typically handled:

Tax-exempt entity has an annual incentive plan set up in much the same way as, for example, a public company. There are target financial and qualitative goals then threshold, target, and maximum bonuses. The measurement period is the calendar year.

Payouts are made by March 15 of the following year to avoid 409A. Employees must be employed on the date of payment to receive the bonus, so the vesting date for typical active employees is the date of payment. Income and FICA taxes are due and withheld from the payment. No 457(f)-specific problems as the vesting and payment years are the same.

However, employees who die, become disabled, or retire (with typical criteria, e.g., 65 with 10 years of service) during the plan year are awarded a pro-rated bonus paid at the same time as the normal payout date. Their otherwise-applicable performance criteria must be met, but they don't have to continue working. The financial performance is determined as of December 31 of each year (but "officially" approved after the close of the year). I don't think this would maintain a SROF until the administrator or committee officially approved the financial results. It sounds like everything is vested (if it ever will be) as of December 31 each year.

So do the dead, disabled, and retired employees owe taxes during the plan year in which they die, becomes disabled, or retire?

Company, for a Welfare Plan with a PYE of 12-31-2014, filed the 5500 with 2 Schedule A's, with a policy date of 3-1-13 to 2-28-14.

Company merged during 2015, but still must file a (final?) 2015 Form 5500 with Schedule A's for the policy date of 3-1-14 to 2-28-15.

But what about the Schedule A period 3-1-15 to 12-31-15 (all Welfare benefits were terminated 12-31-15, and the Schedule A's have been obtained for this time period)?

Question is can a Final Form 5500 for 2015 be prepared using the 2-28-15 policy date Schedule A's? Or is there another filing in there somewhere??

Employee A has money in a company 401k plan. Employee A is severely injured in a car accident. Husband of Employee A has power of attorney. Can husband request a hardship distribution from the company 401k plan to pay medical bills using his power of attorney?

Code section 414(k) provides for a combination DB/DC plan. However, I'm trying to figure out whether the DC portion can allow for discretionary contributions.

What we're basically trying to do here is to have the contributions to the DC portion go up or down depending on what contributions to the DB portion are required. While I may be able to figure out a formula under which that would happen that does not involve employer discretion, it would be a lot easier just to allow for discretionary contributions. However, while 414(k) talks about a combined DB/DC plan, it does not explicitly provide for a combined pension/profit-sharing plan. (A combined DB/DC could be a DB/money purchase plan, which would still be entirely a pension plan.)

For technical reasons, we don't want to have two separate plans. However, it seems to me that if the structure would be allowed in the case of separate plans, it doesn't make much sense to disallow it if the plans are combined.

However, I'm particularly concerned because 414(x), which provides for combined DB/401(k) plans, is limited to small employers. I'm wondering whether the negative implication is that other employers can't have combined DB/profit-sharing plans.

Has anyone seen any guidance, or had any experience, with this?

401(k) plan with 150 participants at the beginning of 2015 (80 were eligible but had no balances). In August of 2015 the plan adopted a resolution to terminate the plan but the company is staying in business. As of 12/31/15 there were still around 60 employees employed by the company (had not terminated employment) that still had balances due from the 401(k) plan.

My understanding is the employees with no balance are no longer participants since the plan terminated. The count would only be 60 and the plan would not need to be audited in 2016.

Per 5500 instructions, Active participants (i.e., any individuals who are currently in employment covered by the plan AND who are earning or retaining credited service under the plan). Since no balance are not earning or retaining credited service.

Ex wife wide just filed for qdro from 1992 divorce. Divorce orders states 3/17 of respondents retirement. Attorney was suppose to follow up to court 30 days later. Attorney never followed up, now attorney is retired and of no help. Judge says she has no idea how court decided on 3/17 share. It was my I understanding the 3/17 fraction was a lump sum of benefit tobbe paid monthly as of 1992. I had defined benefit retirement plan with united Airlines that went bankrupt now under PBGC. The judge wants to take 3/17 of my entire monthly payment. I would appreciate answers how to handle thsee issues. I'm in pay status since December 2011 and the judge wants back payments. It wasn't my fault ex wife didn't keep up with qdro and get it filed before I remarried and retired. Help please. Thank you.

An employer asked me: "Is it legal" for an employer to require, as a condition of employment, that its employee have health coverage (somehow, not necessarily under the employer's plan)?

The employer pays most, but not all, of the premium for an employee enrolled under its group health insurance contract.

The employer told me a health insurance salesperson suggested the idea as a way to get a sufficient percentage of employees to meet an insurer's underwriting requirement.

The workforce is low-paid and does not fear the play-or-pay excise tax. Several employees refuse to do anything about getting health coverage.

Beyond employee-benefits issues, what kinds of employment-law problems might result from refusing to continue an employee if he does not furnish proof of health coverage?

A DB Plan is terminating. Are the actives offered annuity forms if their lump sums don't exceed $5,000, or are they treated like terminated participants, who just get the lump sum option?

Thanks for any responses!

Sponsor has terminated DB plan in 2015, participants will be paid out in 2016, and is considering starting a CB plan in 2016.

I know that the DB benefits need to be considered for 415, and I am aware of the predecessor plan rules for vesting.

The decision to terminate the DB plan was made before any thought was given to adding the CB plan, but it works to side-step doing a CB conversion. Are there any problems with doing this?

What 5500 form does a one man plan file if more than 5% of the assets are in real estate (non eligible assets)

In past years I filed a 5500 due to real estate (less than 100 employees) but the Dr. is retiring - all employees are terminated and paid out. He is still working on minimal basis - still maintains the plan with real estate.

instructions indicate Cannot file an SF - due to real estate and 5500 says do not file a 5500 for a one man plan

Should I switch to an EZ - I cannot find in the instructions a problem with real estate and filing an EZ

Just concerned that a switch from a 5500 last year to an EZ this year will raise flags?

I have a SH plan that terminated in 2015. All assets are paid out. All participants received their 3%. The 100% owner did not. What would be the ramification if he did not give himself the SH?

There is a company in name only now. All company assets were sold.

DB plan started 1-1-13. Based on information from client, named Company X as plan trustee. Plan document and SPD identify Company X as plan trustee (but Company X did not sign the plan document or any other document accepting position as trustee). Now plan sponsor wants to "remove" trustee and appoint himself as new trustee. Company X says it did not know it was the trustee and never meant to be the trustee, just investment provider. Any ideas on the best way to fix this?

One of my plans currently requires 1,000 hours of service in a plan year (calendar) to receive a year of vesting credit. Client is considering changing to elapsed time. The current six-year schedule will remain. Do I have this right, regarding a mid-year change?

• Credit that was already granted for years prior to 2016 will remain unchanged -- based on counting hours, not elapsed time.
  
• Anyone who has any hours of service at the time of the change this year will receive a year of vesting credit if they complete 1,000 hour in 2016 -- regardless of whether they reach that number of hours before or after the change.
  
• Anyone who reaches his 2016 anniversary date after the change will receive a year of vesting credit.
  
• Potentially, then, a participant could receive two years of vesting credit during 2016: One for completing 1,000 during the year, and another for reaching his anniversary date by the end of the year -- assuming the anniversary date is later in the year than the effective date of the change.

Or do I have this all wrong?

Thanks for your help!

On my first attempt to e-file and 8955-SSA, I received an email saying the filing was bad. I use Relius Government forms. Does anyone have any suggestions on where I should look for problems?

I am getting ready for vacation and the brain is elsewhere.

Client has a non-complicated profit sharing plan that the attorney put on an individually designed plan document. It is coming up on the end of the 5 year cycle to restate.

It doesn't need to be on a IDP and want to save this client money. Can we just do the restatement onto a pre-approved document now?

When calculating a QNEC for missed deferrals, is the corresponding match also considered QNEC or is it categorized as employer match.

May a 457(b) FICA Alternative Plan (that provides for mandatory employee deferrals of 7.5% of compensation) provide that such deferrals can be made on a Roth basis instead of a pre-tax basis?

When a participant has compensation greater than the $265,000 compensation limit for 2016, is his deferral election percentage applied based only on his $265,000 compensation, or on his full compensation for the year?

For example, if a participant with $300,000 in compensation elected to defer 6% of pay for 2016, is his deferral election applied to his full $300,000 compensation to result in a total deferral amount of $18,000? ($300,000 x 0.06 = $18,000)? Or is his deferral election applied only to his compensation up to the $265,000 compensation limit, resulting in a total deferral amount of $15,900? ($265,000 x 0.06 = $15,900)?

Hello,

I posted this topic at bogleheads.org and was recommended that I post here as well. Hoping for any help I can get.

When I became eligible to receive employer contributions into an IRA account, I went to my credit union (since my wife and I have several accounts there already). I had no knowledge of the different types of IRAs and simply told them that I needed an IRA account to accept employer contributions. The teller opened a traditional IRA for me, apparently not realizing that this was the wrong account to accept matching contributions from an employer. My employer began sending checks to this account (flagged as SIMPLE contributions) with my contribution plus a matching amount, and no red flags were raised. This was in January of 2014.

Fast forward to three weeks ago. My credit union's IRA department was internally audited, and my account was flagged as being coded incorrectly—it couldn't accept contributions to a SIMPLE IRA, because the credit union does not offer a SIMPLE IRA. News to me.

I'm currently opening a new SIMPLE IRA account to accept future contributions, but I need to get the money that was incorrectly placed in the traditional IRA out and into the SIMPLE, where it should have been all along. Both my employer and myself have filed our taxes as if the account was a SIMPLE this whole time, so technically it shouldn't make a difference to the IRS if the amount that moves to the SIMPLE is identical to the amount my employer reported contributing. The traditional IRA would be closed as if it never existed (because it shouldn't have).

How do I do this without incurring some sort of penalty? It's not a rollover, nor am I withdrawing funds early—the credit union simply made an error and opened the wrong account for me. Any suggestions would be extremely welcome. I've tried to research this online and it seems to be such an oddball occurrence that I can't find mention of it anywhere.

Thanks,
Ryan

NQDCP provides for a payment on a single, specified date, whether or not a separation from service has occurred, but the amount payable at that single, specified date is less if termination of employment occurs prior to that date.

However, there is one exception: If an involuntary separation from service occurs prior to the single, specified date, the accrued amount is paid in a single lump sum upon separation from service.

Does this exception violate the general rule in 1.409A-3© that there be a single payment methodology for all payments triggered by a separation from service? I think not, because the only payment triggered by a separation from service is a separation from service described in my exception. Any different views?