• Plan will be terminated .
• Plan subject to PBGC
• Plan valuation AFTAP is greater then 100%.
• Plan assets less than total termination benefits
• Owner want to waive part of his benefits rather than make additional contribution.

Does this plan qualifies for a standard termination filing?

Thank you for your help.

We have a PS plan with insurance that pre-dates our involvement.

One of the participants dealt directly with the insurance company to take out a loan on the policy in his name and claims that the insurance company says he doesn't need to repay it.

I don't understand how he managed to get the loan without the trustees consent, but that is a question for another day.

I contend that since it is a plan asset, the loan needs to follow the same rules as any other loan i.e. have a loan agreement with the plan and be repaid in installments over 5 years.

The loan is almost 3 years old now and I have been telling the client the whole time that there need to be repayments. I contend that the loan is in default and should be taxable to the participant.

Is there any exception to the qualified plan loan rules for insurance????? This is our only PSP with insurance, so maybe there is something I'm missing.

I've been asked to help interpret an ADP test done by someone else - always a potentially scary thing - and predict how much the HCEs can defer in 2016. The plan covers about 20 companies that are part of a controlled group. Overall, the test appears to me to fail with an HCE ADP of 1.43% and an NHCE rate of 0.57%.

The bundled service provider is saying it passes by using disaggregation. I initially thought they were referring to disaggregating the otherwise excludables. Looking at the actual test, it appears that they are disaggregating by geographic location or possibly by job title (not enough information to tell for sure) in addition to excludable and non-excludable categories. The test shows Group A excludable, Group A non-excludable, Group B excludable, Group B non-excludable, etc. Each group passes.

I thought the point of the controlled group rules was to require combined testing of the related companies. Is there some rule that I've forgotten about that allows this sort of disaggregation?

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Background Info:

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Employees are notified that, if you are an employee on a specific date - the plan will waive it's ordinary eligibilty requirements and you may begin deferring immediately. If you do not elect to defer by a 'certain date' (ie: within 30 days) you will be subject to the plan's ordinary eligibility requirements and must wait until you satisfy eligibility and then you will enter on the plan's next entry date and can begin deferrals then.

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Specific Question:

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Can a plan waive 401k eligibility requirements temporarily, and for those who do not elect to defer require they wait until they do satisfy eligibility?

Now that HRAs have been restricted to retiree health benefits and non-major medical benefits (e.g., dental and/or vision only), and yet extant are IRS rulings from the past decade that allow for funding of HRAs (such as into a VEBA), I've been asked if about funded retiree health HRAs much more than pre-Obamacare.

Owners of small business have been reluctant to participate in MEWA VEBAs for HRAs because of the nondiscrimination requirements of section 105(h). The small business owner makes much more than his/her employees, and has benefited from the factoring of those compensation differences in the contributions/allocations/testing when it comes to company contributions to their 401k's. They do not like the idea of the same dollar amount having to be contributed to a funded retiree HRA for the lower paid employees as is contributed for themselves, higher paid. But section 105(h) and regulation 1.105-11 don't allow for differences proportionate to compensation.

However, what about taking into account differences in age and thus numbers of years until retirement? Using age weighting concepts allowed for 401(a) plans, can the employer put more in for older employees than younger ones, calculated based on investment earnings assumptions so that presumably from a current contribution both would have the same dollar amount when they reach retirement age and are thus eligible for the benefit from the VEBA?

Box 12, code W indicates HSA contributions. As I'm learning about this, it looks like these contributions can be made through employee deferral via section 125, or they can be employer contributions.

What I can't seem to tell is if the amounts were withheld through employee deferral, are they already included in either Box 1 or Box 5 of the W-2?

Our definition of comp is W-2 including all types of deferral, and in this particular case, everything else is already included in Box 5...I'm not sure if I need to add these code W amounts in, or if they're already included in Box 5.

Any help is greatly appreciated!
Thanks!

I'm confused. My boss sold his practice last year but remained as an employee. Before the sell he told us that EVERYTHING will remain the same. NOTHING is changing. Within this we're assuming 401k, hours, employees, pay etc... We were paid biweekly and our contribution to our 401k was automatically deducted and put into our funds (and whatever %he matched). That all stopped after practice was sold. So nothing was takin from our cks and I'm assuming he didn't contribute. When we asked what was going on, he replied the new boss had until October to put in. Another source told me it would also have to be retroactive. Yesterday at 530 pm he (previous employer) handed us a letter saying, " we are providing you notice that, effective April 30, 2016, bla bla bla name of previous practice, the employer will be terminating the bla bla bla 401k plan. Effective with this amendment, no future benefits will accrue after April 30, 2016. Your account balance will not be decreased as a result of this amendment."

Ok with that being said, if he is terminating it as if April 30, what happens to all of that time in between? If he sold the practice in 8/2015, shouldn't that have been terminated then and brought to the attention of the new owner? I brought it to the attention of the new owner and he had no idea about this letter nor our 401k. Is our old employer trying to pull a fast one on us because he has in the past.. He may he forgot this step in closing and is now trying to cover up. Shouldn't he have given this letter to us a long time ago as well? Giving us time to flip our plans. 2 days notice and the new owner had no clue of this. Shady?!?! Who is responsible? Any help is appreciated. Thank you.

Hello all. I have very interesting case in which partners receives K-1 which is in negative means he incurs loss but he has positive W2 payment. Thus to calculate his plan comp. should i negate the negative K-1 from his W2.?

hurray, they have concluded you can use the 'greatest' of exclusions

e.g. a full time employee hired 4/3/2015 is an otherwise excludable employee until 10/3/2016

(1st day of plan year or 6 months after completion of 1 year)

thus if he quit 8/4/2016 he is still otherwise excludable.

OE memorandum.pdf

I am hearing from our auditors that based on ASU 2015-12, for fixed income investments like stable value CCT's, contract value will be the new fair value on the plans financial statements. However, at this point I am unclear as to what value we would report on the 5500 for those funds: Fair value calculated based on the value of the underlying assets which is what we've been reporting or would we go back to treating contract value as fair value. Thoughts?

Need a 1095-C Reporting wizard... -- Code 2C, employee enrolled in coverage. Code 1E, MEC offer to Ee+spouse+kids. Have bi-weekly enrollment and eligibility for our plans. Employee eligible for coverage on 6/29/15 but didn't enroll until 7/13.

Colleague suggests July reporting should be 1E/2C, because employee was offered coverage for whole month, even though no coverage effective until 7/13.

I think July reporting should be 1E/2H because employee's coverage was not effective for every day of the month. 2H definitely applies.

Would appreciate any thoughts, and especially a point to any IRS authority or specific example on this bit of minutia.

We have to file form 5310 for the following situation.

• Employer sponsors a DB and a Profit Sharing 401(k) Plans.
• Since inception in 2012 plans have been aggregated for testing purposes
• Employer is terminating the DB plan in 2016 and filing with the IRS for Determination letter (Form 5310)
• The plans are not safe harbor design and the DB has also non statutory class exclusions.

Here are several questions:

• Must we answer the the questions on 5310 only for the DB (as if the other plan did not exists?. I do not see any question- excepting if the plan is part of an offset arrangement (which is not)- that leads me to think that I should take into consideration the # of participants, the 401k.m provisions, plan assets, employer contributions, etc. for the profit sharing plan.
• The form asks , though, if the Employer maintains another qualified plan. But the required statement requires only enough info to identify the plan
• The form asks if "the top heavy minimum accrual or contributions" have been made. They were made in the profit sharing plan. Should the question on form 5310 be answered YES (even though they were made in another plan?)

Any help greatly appreciated

Thanks in advance

I'm reposting a question posted a few years ago - because the same issue has now arisen for one of my clients:

Company A participates in a multiple employer plan. Company A will be merged into unrelated Company B, and its employees will participate in Company B's 401(k) plan after the merger date.

If Company A withdraws from the multiple employer plan on the day prior to the merger, will that be considered a "plan termination" so that its employees can receive distributions from the multiple employer plan under the "plan termination" exception of 401(k)(10)?

Would Company A have to do the following to effect the plan termination: (i) withdraw from the multiple employer plan and spin off the assets in a new plan established for this purpose and then (ii) terminate that newly established plan and distribute the money to participants. Does this violate the permanency requirement? Any qualification concerns about eventually rolling over the account balances from Company A's plan into the acquiring company's plan?

Any insight would be appreciated.

I have a question about the filing of a final Form 5500 after a 401k plan termination.

All assets of a 401k Plan Sponsor are being purchased in an asset sale and while the Plan Sponsor legal entity will continue to exist for a period of time, there will be no employees. The Plan Sponsor is terminating all benefit plans, including the 401k, as of the day of the transaction. The Buyer is not assuming any of the Plan Sponsor's benefit plan liabilities in the purchase agreement.

Clearly it will take some time for the 401k assets to be distributed after the plan termination date. So who files the Final Form 5500 in a situation like this? I would assume the Plan Sponsor is responsible for the filing as long as the entity is still in existence at that time, right? Would the Buyer have any responsibility?

I'm curious how others have seen this handled. Thank you!

Does an IRA to Roth IRA conversion start the 5 year clock?

Assume that a participant has a Roth 401(k) account and is always ineligible to contribute to a Roth IRA. As I understand it, if the participant rolled over the Roth k to a Roth IRA, the 5 year clock starts anew.

If such participant had done a conversion of a regular IRA into a Roth IRA 5 years earlier, would the 5 year rule be satisfied immediately upon the rollover from of the Roth K to the Roth IRA?

I'm going to be doing this for the first time. Has anyone done this before? Can you tell me anything about the steps involved?

can a QACA match balance be included in a hardship distribution?

Recently, we filed 9 separate 2015 5558s for a client, all at the same time. The confirmations that the client received had the correct EINs, but all of the PNs (plan numbers) were listed as 000. Has anyone seen this recently?. After contacting the IRS, their response was, oh well, at least you got 9 confirmations back, so you should be okay. Just checking to see if this is systematic for 2015 extensions or a one off. Thanks!

Is it ever possible that an employer met all of its ERISA and Internal Revenue Code funding obligations to a single-employer defined-benefit pension plan (including as of the most recent required contribution date), and yet the plan lacks sufficient assets to pay currently due benefits?

If it is possible, what circumstances would cause this?

Fairly typical scenario - employer sponsors a SEP for, say, 2015, then decides to change to a 401(k) for 2016. No problem there.

When calculating top heavy, a SEP is included. My question involves determining when the SEP is "terminated" so that SEP balances no longer have to be included in the top-heavy determination.

According to the IRS website re terminating a SEP:

"To terminate a SEP, notify the SEP-IRA financial institution that you will no longer be contributing and that you want to terminate the contract or agreement. It is a good idea to notify your employees that you have discontinued the plan.

You do not need to give any notice to the IRS that you have terminated the SEP."

This brings up a couple of issues. First, assuming such notice is given, it seems that this would be considered a "plan termination distribution" - even though no actual "distribution" takes place, so you would have the 5-year addback.

Agree/disagree?

If no such notice is given, which I suspect is often the case (the employer simply stops making contributions to the SEP) it may not technically be "terminated" - but it also seems unreasonable to not consider it terminated. It still seems to me that it would be reasonable to use the 5-year addback and just consider it "terminated."

Agree/disagree?

There seems to be a lack of specific guidance here, so it seems like you have to determine what is reasonable and give it your best shot.

I appreciate any and all thoughts.