We work on a plan that is a controlled group. Out of the 3 groups we administer two and another TPA takes care of the 3rd Plan. Not a problem, however they acquired another group (4) that has a different Plan Year. We are contracted to take care of the coverage testing for all 4 groups. How do we handle the off calendar plan?

We have a 401(k) plan that until 12/31/14 had employees and owners who were participants. During the 2014 plan year, all non-owner participants terminated and received distributions. So that as of 1/1/2015, the only employees/participants left are the owners (2 owners with 50% ownership each.) Client is an LLC taxed as a S-corp. We filed the a Form 5500-SF for the 2014 plan year. We are now working on the 2015 valuation work and Form 5500.

1. Can we file a one participant Form 5500-SF for 2015? In other words, is plan eligible for an Form 5500-EZ?

2. Plan also had one late deposit of deferral funds. Is a Form 5330 required for a one-participant plan? I know when you file a one-participant Form 5500-SF, you don't answer line 10a.

Thanks to all who respond.

I submitted my prepared(draft) QDRO to the pension plan administrator and received a letter from them stating that the order "qualifies" as a QDRO. MY EX WON'T SIGN IT!. A 50% division of his pension plan for the length of our marriage( 23 years) was a stipulation in our divorce settlement 10 years ago. He has not remarried, and he is not collecting benefits yet.

What will happen if I submit the QDRO to the court for the judge to sign without my Ex’s signature? Someone advised me to file a request for order to have the judge appoint a Elisor to sign it in my Ex’s behalf. I’m hoping I don’t have to go back to court to get something that was already agreed on in the settlement. It's my understanding that I need to have the judge sign it off before sending back to the plan for final approval.

Client has 3 partnerships: One partnership has a guarantee payment and makes money, the other two actually lose money and offset the gain. Client wants to set up a solo 401k plan for him and his wife in the "money making partnership" and defer the max allowed. Is this possible to do so if he shows no income because of offset losses in the two other partnerships?

Also with the new Temp Regs intended to halt the practice of some partnerships treating partners as employees is a solo 401K even possible? How can one defer any income if its not employee income and just a distribution

I can find NO definitive answers anywhere

Any direction would be most helpful

If a business transaction occurs, a transition rule under IRC 410(b)(6)© applies for coverage purposes. Does this transition period also apply regarding 401(a)(26)?

For example, employer A covers 2 of 5 nonexcludable employees in their DB plan before the business transaction occurs. They buy company B's stock. Company B has 5 employees that would meet the plan's eligibility/entry. Does 401(a)(26) require an immediate change to the plan to add more participants, or is it transitioned just like coverage?

Short Version: A buys B in asset purchase. B has no plan. Can A amend to allow everyone employed on "x" date to enter plan, then revert back to requiring age 21 and 1 YOS?

Long Version: "A" has a 401(k) plan requiring age 21 and 1 YOS. Dual entry: 1/1 and 7/1.

A has 1 employee - Joe. Joe is very part time and would never be covered by plan.

April 2016, "A" buys "B" in an asset sale. B has no plan. A hires all of B's employees. Some are under 21.

A wants to allow Joe and all of the new B employees to enter the plan August 1st.

After that, age 21 and 1 YOS are to apply to all new hires.

If we simply amend to count service at B, Joe is still out. And, some B's are younger than 21, so they are still out.

Any problem with amending such that everyone employed on August 1st is in, regardless of age and YOS, then revert back to age 21 and 1 YOS?

Hi,

I was wondering if anyone knew whether a 401(k) could be set up for a US satellite office of a foreign company? There is only one US employee, and he is not the owner of the company so I believe a solo 401(k) isn't an option.

Thank you!

I see no way to accurately track tips in a restaurant environment of this size & we'd like to insulate the Plan from that variable. Does the exclusion of tips cause a problem with the compensation definition? How would you negotiate such a situation? They're already locked into the QACA structure unless the ERISA atty pulls a rabbit out of his hat...

Hi. I am struggling with the controlled group rules. My main concern/question is about entity C and the related testing for their 403(b) plan. Here is the scenario:

A and B are each 501©(3) entities. A owns 40% of Joint Operating Corp (JOC). B owns 60% of JOC. JOC is a shell...no employees, no payroll, nothing. JOC owns 100% of C, 100% of D, and 100% of E. C, D, and E are each 501©(3) entities. My question involves C. C has employees and sponsors a 403(b) Plan just for C's employees.

Are C, D, and E automatically in a controlled group because they all share a common 100% parent? When I look at the brother-sister rules, it always refers to the "same 5 or fewer 'persons'" when it talks about ownership. JOC is a corporation. Does that qualify as a person?

Also, with regard to C, what about A and B's shared ownership in JOC. Does that create a controlled group with C in some way?

By way of additional background (not sure if it is helpful), D and E treat each of their employees as employees of B, meaning that they are on B's payroll and B is the sponsor of their benefit plans.

I have read through the controlled group rules, but I haven't been able to read a lot of examples. Just the text of the rules is hard to follow.

Please help. Thanks.

Although many are I know - I'm not a big fan of auto enroll, at least not in the small plan market where I live.....

anyway - this hasn't come up before but I have an auto enroll plan where a person was termed and took their balance out & now is rehired without a break-in-service and can/will enter the plan immediately upon rehire.

The client & vendor will send this rehire all of the auto enroll materials and go through that whole process again. Of course the vendor has a timeframe on the auto enroll process in order to give the participant all of the required disclosures and time to opt out, etc.

So this person won't actually begin contributing to the plan upon rehire but some later date that could potentially be as long as a month or more out. Is there an issue with this?

Seems to me (as an example) if the participant had NOT taken distribution of their account then they would simply be reactivated and could contribute as early as their first paycheck after rehire.

thoughts?

An IRA owner holds a significant partnership interest in his account that is generating nearly $100K in UBTI annually. He is going to starting filing the 990-T (he will have it prepared, the IRA trustee files it), however he is concerned that if he starts filing now, IRS may ask about prior years.

Does anyone have any experience with IRS and 990-Ts and whether or not filing a 2016 return will generate an inquiry for 2015 and prior years.

As an aside, the UBTI was much much less in prior years, but likely over the $1K threshold. A refinancing increased the leverage in the partnership.

If a company establishes a SIMPLE IRA plan by the October 1st deadline for 2016, does that mean they would have needed to distribute the initial 60-day election period notice by August 1st?

Can someone point me to a good write up of when you can send statemetns electronically?

We work with a recordkeeper who we converted a bunch of plans too. New recordkeeper essentially has no email addresses. But yet they do not send statements. Instead they say we deliver them electronically.

To me this sounds way off-base and I would love to point to some DOL document that clarifies that this does not work.

ESOP established in 2002, non-publicly traded stock. Corporation elected sub-s status in 2008. I understand that Code 409(h) excepts ESOPs maintained by sub-s corporation from the put option requirement. But must the plan document contain language to that effect? Currently the plan document contains the required put option language but does not contain any language referencing 409(h) in the event the corporation elects sub-s status. Corporation is considering terminating the ESOP and wants to know if they can make distributions in stock without having to deal with put options.

A participant is permitted to borrow up to 50% or $50,000 of their account for a loan. 50% of the account is used a loan collateral. Should the 50% loan collateral be maintained at all times? Example: A participant has an account balance of $10,000 and takes out a $5,000 loan. The $5,000 left is the loan collateral. Can the participant then immediately take a hardship for $3,000 or should they wait until they either pay down the loan or make additional contributions to give them additional funds over the collateral amount?

A 401(k) plan has 2 trustees, the executive director of the corporation and one other employee. I'll call the director John and the other trustee Sally. It is a non-profit corporation with a large board of directors, none of whom are employees or trustees.

John resigned and they have a new director, Jane. I sent an amendment to appoint Jane as trustee, with a signature line for Sally to execute the amendment as existing trustee. I also sent appointment of trustee/resignation of trustee forms. No big deal, I thought, but could not have been more wrong.

Jane does not want Sally, who works under her, to have any part of signing off on her appointment. To get around Sally having to sign, they asked if the change could be done as a board resolution instead of an amendment. I told them that would be fine. I'm not sure if that's right but I didn't see any other way around the ego trip. Now they are pushing it even further. Jane has a statement from the board that as director she can act on all matters on behalf of the employer. Given that, she is asking if she can appoint herself as trustee. Does the change have to be approved by the other trustee or the board of directors? She says if she can send a letter to John to remove him she should be able to appoint herself. She kind of has a point there, but surely there have to be some checks and balances.

An employee was working for City A and was covered under a union contract hat provided she was an eligible employee for purposes of Plan X (a defined benefit plan). After ten years of service, Employee became a certified teacher and took a job with the Board of Education for (same) City A and is now covered under a statewide retirement system for teachers of State S and no longer an eligible employee for Plan X. Assume that her last day of work with the City was on Friday and she started teaching in the schools of City A on the following Monday.

Did this employee terminate service with City A when she became a teacher or has she continued to work for the same employer and just stopped being eligible for Plan X?

Must she wait until she retires as a teacher (totally leaving employment with City A or its Bd of Ed or any other subdivision or related employer) in order to commence benefits? The plan does not permit in service commencement of benefits.

The plan (which is based on statutes, ordinances and collective bargaining agreements) has very imprecise language so it's really not helpful at all in determining whether or not she terminated employment.

If anyone can point me to guidance on how to determine separation from employment or application of controlled group rules as may be applicable to governmental plans in such a case, I would be appreciative.

Thanks!

Does anyone have any "inside" anonymous contacts where they have heard anything about how the process is moving along, tentative guesses as to approval, etc.? The silence has been deafening...

It is my understanding that an employee's contributions to a governmental defined benefit plan cannot be refunded to an employee who is no longer covered by the plan if he or she remains employed with the sponsoring employer unless he or she reached normal retirement age. This issue arises in the context of a collectively bargained employee who leaves the bargaining unit to become part of management.

Does anyone know of any exceptions or is there any authority that supports the refund of employee contributions to someone who transferred to a position not covered by the plan but has not separated from service?

I have a client who is trying to argue with me that vacation is a taxable fringe benefit and thus not eligible for contributions based on their plan provisions (which do exclude taxable fringe). I know it's ridiculous but its hard to point to something concrete...