2 participant plan paid out early in 2016. Valuation is end of year. Is a Sch SB needed for this year?

A client is being told that a 404© disclosure must be distributed annually. I don't think this is technically correct.

I hasten to say that I can see how procedurally, this might be done routinely, since the 404a-5 disclosures go out routinely anyway, and QDIA disclosures go out anyway, so it may just be easier to throw every disclosure into one document or package. But I don't think the 404© disclosure itself, separate from the otherwise required items, is an annual REQUIREMENT.

Am I missing something?

Plan withheld 401(k) for pay period prior to the plan document being signed due to miscommunication between the client and their broker and the TPA preparing the plan document. Is there any remedy for this other than refunding the ineligible deferrals? Is there an SCP or VCP option?

401(k) plan terminating 12/31/16. They have a Volume submitter document based on 2010 Cumulative list. We will update for everything on 2015 cumulative list, but of course there will be no 2016 Cumulative list. Can anyone think of amendments that might be required as of Termination Date that are not on the 2015 list?

Thanks.

A company (Company A) was dissolved, and the two owners of Company A formed two new companies, Company B and Company C. Company B is now owned by one of the two Company A owners and retains all of the employees of former Company A.

Company B became the sponsor of Company A’s existing defined contribution plan.

Company C is owned by the second owner of former Company A and has no employees from Company A besides himself. He was 60% vested in Company A’s defined contribution plan when Company A was split. He now sponsors a new defined contribution plan for his company.

Is it possible to amend Company A's plan to fully vest those former employees of Company A who were transferred to Company C if it is only the former owner of Company A who benefits?

Are you the alternate payee of a QDRO (Qualified Domestic Relations Order) with a General Motors pension plan participant?

Were you charged an excessive amount (greater than 5% of the base pension being insured) for your survivor benefits?

Were any deductions made to your share of the gross amount due you (in violation of the court order)?

I feel I have been the subject of the above misapplications, I also think I am not the only one. I have found that even though attorneys agree with my assessment, they say it is cost prohibitive to go after GM to correct the situation. The US Department of Labor has said they need to receive multiple complaints before they investigate the situation (as a pattern of abuse). If you feel your pension payments have been adversely affected by the above mentioned applications being misapplied please contact the US Department of Labor, Employee Benefits Security Administration office nearest you by using the link below.

https://www.dol.gov/agencies/ebsa/about-ebsa/about-us/regional-offices

We took over as TPA on a fiscal year plan with two owners who were taking monthly distributions toward their RMDs. The amounts were substantial. When preparing the 8/31/2015 valuation we (foolishly) assumed that the large distributions we were seeing were based on amounts calculated by the prior TPA.

While preparing the 8/31/2016 valuation we noticed that the distributions to one of the two owners were not sufficient to meet the RMD requirements for 2015. We are now drafting a reasonable cause statement for her to file with her excise tax return.

How much detail is required in this statement?

Are they typically approved, or is it questionable?

Any other tips about what works or what doesn't?

Often you see a case where an employer deducts a 401k contribution but fails to deposit it or deposits it late into the plan.

What about this situation? An employee completes a deferral election form and the client begins to deposit contributions to this participant's account on a payroll basis (about $600 over 3 months). At some point the employer realizes that even though they were correctly depositing the funds to the participant account they were not deducting them from the participant's paycheck!

What is the best way of going about fixing this? Have the employer deduct the full amount from the next paycheck? Can they spread it out over the remaining paychecks, in addition to the regular deferral? Is there a better way?

Before the EEOC enacted Regulation Section 1625.32, the EEOC and courts took the position that an early retirement incentive plan (ERIP) that uses an upper age limit or age-based window for eligibility violated ADEA. For example, in Jankovitz v. Des Moines Indep. Comty Schools, the court found that an ERIP that paid for retiree health insurance premiums only until age 65 was discriminatory on its face for using an age limiting factor (age 65) and was inconsistent with the purposes of ADEA. This case is still good law and is cited by other courts to strike down age limits.

However, in 2007 the EEOC issued Regulation Section 1625.32, which provides a broad exemption for employers to offer different retiree health plans for retired participants that are not eligible for Medicare and retired participants that are eligible for Medicare. This rule allows employers to offer carve out and supplemental plans for Medicare that are not as valuable as the plan for retiree that are not eligible for Medicare.

What is not clear, is whether the regulation also applies in the context of an ERIP. Can an employer as part of an ERIP offer employees who retired during the window subsidized retiree medical in the non-Medicare eligible retiree health plan without offering a subsidy to employees that retire during the window and will be eligible for the retiree health plan for Medicare eligible employees.

As you can see, I have avoided calling the plans the "under age 65 plan" ) and the "age 65 and older plan". I have a call into EEOC but have not heard back. Any thoughts are welcome!

It is not clear to me from any source I've read whether an employee who has terminated employment can take a distribution in order to roll it into another plan without waiting five years. The "qualified retirement plan distribution rule" at 401(a)(14) seems to indicate he may do this so long as he has 10 years as a participant and has separated from service. Can anyone clarify this? Thanks

Participant leaves company mid year and joins new company. Contributes 18k in first plan and 10k in new plan. They are not catch-up eligible. They receive match in both plans. First plan balance rolled out to IRA.

When they contact the TPA to request the excess 402g refund, do they get to keep the match attributed to their excess deferral in the new plan or does the match have to leave their account (forfeited)?

100% owner in a DB plan turns 70-1/2 in 2016.

Rather than beginning payments as of 4/1/17 of the accrued benefit has anyone had experience with the procedure for using the individual account method for the RMD instead? The Pension Analyst from October, 2011 seems to say you can:

"If a participant who has reached his RBD takes a single sum cash settlement of his benefits, the MRD portion of the payment (which cannot be rolled over to another qualified plan or Individual Retirement Account) is typically determined using the rules that apply to defined contribution plans. However, effective for plan years beginning in 2006, the final MRD rules for defined benefit plans allow plans to determine the MRD portion of a single sum cash settlement by using either the rules that apply to defined contribution plans or the rules that apply to annuities. Plan sponsors must incorporate in their plan document which rule they elected. The final MRD rules for defined benefit plans were discussed in greater detail in a November 2005 Pension Analyst."

Link: http://www.retire.prudential.com/media/managed/Defined_Benefit_Plans_10_11.pdf

If so,is it possible to use the PVAB as of 1/1/16 divided by 26.5 as the 2016 RMD? Then how would this get done? Can the PVAB stay in the DB Plan, possibly as a separate account? How would future benefit accruals handled?

Thanks in advance for any input.

A plan sponsor wants to start charging participants $75 to initiate a loan. They want the participants to pay the $75 by payroll deduction and forward that to the TPA. Are there any issues with paying the fee by payroll deduction rather deducting the fee from the account?

Thank you for any replies.

I am in the process of finishing a QDRO with my ex-Husband. It has taken some time. The original 401k company was changed to a new company for my exhusband. I need to find out the amount of earnings on his 401k from the time our divorce until this summer.

I need to know earning from 9/8/11 - 6/30/16

9/8/11 closing balance including loan and deemed loan balance = $64,641.55

9/8/11 loan balance = $7,254.40

9/8/11 deemed loan balance = $17,265.37

Contributions from 9/8/11 – 6/30-16 = $67,229.79

Loan Payments from 9/8/11 – 6/30/16 = $7,721.34

Amount that transferred out on 6/30/16 = $153,119.76

The award was for $25,987.09 as of 9/8/11 including earnings until date of segregation.

Any help that any could offer would be greatly appreciated. (Basically I need to know what amount I am owed in addition to the award amount of $25,987.09)

2015 AFTAP certified timely at 85%

at 1/1/2016, AFTAP is presumed to be 85%

at 4/1/2016, AFTAP is presumed to be 75% (85% less 10%) since actual 2016 AFTAP has not been certified.

in order to avoid lump-sum benefit restriction, a presumptive burn occurs on 4/1/2016. to get the presumed AFTAP to 80%, lets say $20,000 of the prefunding balance is burned.

in July 2016, actual 2016 AFTAP is certifed at 82% taking into account 2015 contribution made in June 2016. this is the final certified 2016 AFTAP.

when preparing the 2016 Schedule SB, is there a deemed burn equal to $20,000 on line 12? or since the actual 2016 AFTAP is certified at 82%, the presumptive burn equal to $20,000 is disregarded?

im having trouble figuring out how the presumptive burn impacts the 2016 Schedule SB.

I am looking for a reliable service to which i submit complex plan questions usually to attorneys who then provide a response for a fee. I know a number of groups offer this type of service..TAG data, ASC, ErisaPedia, etc.

The most important aspects of what i am looking for are 1. accurate responses preferable by an attorney and 2. timely response. The fees must be reasonable but i am willing to pay more for a service that is both accurate and timely. By timely i would say 24-48 hour response time.

Does anyone have experience with these types of services and which ones do you find particularly useful?

Due to error in payroll reporting, 10 employees were not allocated employer contribution for the initial plan year, i.e., a calendar year plan established in 2015.

These employees are going to receiving non-elective employer contribution now, i.e., in November 2016.

How do we report this contribution on Form 5500?

Should it be reported on the 2015 Form 5500 or on the 2016 Form 5500.

From my reading, it appears that these contribution will be part of the 2016 limit, i.e., for the purposes of 415 as well as 404.

Does this limitation apply to deferrals, too?

4 plan participants deferral contribution deducted from their respective 2015 earnings were not deposited to the plan until this time . Unfortunately, from one of the participants, an HCE, $18,000 was deducted from his 2015 earning as deferral contribution but only $16,500 was deposited during 2015. The plan is correcting the error by depositing the $1,500 including the lost earnings now (October 17, 2016). Does this $1,500 count against his 2016 402(g) limit?

We took over the administration of a profit sharing plan in 2011. A QDRO was written in 1987 awarding 50% of a participant's benefit to an alternate payee. In 1990, the participant was paid about $6,000, but the alternate payee received nothing. The participant subsequently passed away. Now the alternate payee is asking for her benefit. The plan sponsor claims that $6,000 was 100% of the benefit. We don't have sufficient document to prove whether $6,000 was 100% of the benefit or 50% of the benefit. In fact, we don't have any reports for the plan prior to 2003, so we can't really estimate what the participant's benefit was in 1990. She is threatening to get her attorney involved. Can anyone opine on what the outcome would be if she pursued this matter legally?

Thanks for any responses!

PSP is terminating. However, the plan sponsor did not withhold 20% from distributions. There are residual earnings that are left to be distributed but not enough to cover the taxes. Do you instruct the participants to cut a check to the plan sponsor for the taxes or are do they report it on their personal 2016 tax return?

A wife has run a company for the past 8 years as a single member LLC. The LLC establishes a qualified 401K plan of which the husband rolled his 401K after becoming an employee. The wife's Plan states if an employee quits or is fired the Trustee ( who is the wife per The Plan) controls the 401K investment decisions. The husband was then let go. The husband then setup his own partnership LLC of which the wife's 401K Plan invested in with "for the benefit of her and for the benefit of the husband's," 401K funds from her qualified Plan. We believe this structure is legal given that the wife's company's 401K Plan is written to allow these types of alternative investments and that there is no attribution between husbands and wives to create a disqualified or prohibited transaction.

The wife's business has no business dealings with the husband's business and the wife is not compensated in any way by the husband's business. The wife has helped in the husband's new business with marketing and the like but this is being done on the side and is separated from her main, profitable business.

The wife's 401K Plan has a TPA who files form 5500 and drafted the Plan documents. All of the funds that were rolled into the wife's 401K Plan are now invested in the husband's business. A valuation of the husband's business is done yearly to establish value of each membership held in the 401K plan of the wife's business.

The operating agreement for the husband's company states how the memberships get sold back to the wife's 401K once the business returns double the original investment.

Can anyone comment on this structure as it relates to being a prohibited transaction?