Can anyone point me to the IRS or DOL guidance on this subject? I saw something a few years ago, but can't remember where or even exactly when.

Small profit sharing plan is trustee directed, picks a high risk asset that over the course of several years tanks, and becomes worthless.

Trustee (is owner of plan sponsor) wants to make the plan whole for the losses.

I think in 2008 or 2009 a colleague showed me a bulletin or something that had the above facts as a similar example and gave restoration of the losses by the plan sponsor as a permissible correction. I don't know how old the guidance was, I think it was from way before 2008 or 2009, but I think that's when I remember seeing it.

Anyone know what I'm talking about?

Are there other threads on Benefits Link that have clues?

I have a question for top heavy determination. I have a plan in which an owner gave up ownership as of 12/31/14. So when using the 12/31/14 balances to determine the 2015 top heavy, he is still being included. Is this correct?

A DB plan is undergoing an IRS audit for which the sponsor has assigned her longtime CPA to be the POA. We administer the plan and are working closely with the POA and have provided all of the items initially requested by the auditor. The auditor has since requested additional copies of prior year paperwork and although there's still ample time to provide this additional info, a DOL rep has contacted the POA to inform her that they will be requesting in writing copies of various plan items. The DOL rep also said that they will be calling to interview the sponsor, the TPA, and anyone else involved with the plan, and said that a conference call will not be acceptable - every conversation has to be a 1 on 1. I suppose anyone who is contacted should ask that any info requests be made in writing rather than answering questions on the phone. Has anyone ever had this type of experience?

Since it's been quite a while since our last DOL audit, we're wondering whether this is how the DOL now conducts inquiries or whether they're overstepping their bounds. It's hard not to think this is overkill since the IRS hasn't yet finished its audit and the DOL is taking such a broad approach - is there anything that can be done to limit their scope, or at least establish a POA situation where they contact only one person? If the IRS has found a problem would they involve the DOL before sending out correspondence announcing their conclusion? All help is greatly appreciated.

Trying to find some concrete specifications on this - if a plan has three trustees and only one has signed the PPA document by April 30, 2016, is the plan considered executed? Or do all three have to sign before the document is considered compliant?

Question: Can a plan "back-sweep" and automatically enroll participants at 3% if the participant is contributing at 2% and still qualify as an EACA?

Proposed Answer: No. Treas. Reg. 1-414(w)-1(e)(2) defines an ACA as "an arrangement that provides for a cash or deferred election and which specifies that, in the absence of a covered employee's affirmative election, a default election applies under which the employee is treated as having elected to have default elective contributions made on his or her behalf under the plan." Because the participant has made an affirmative election, automatically enrolling him will result in the arrangement not being an EACA.

What are your thoughts?

This may sound stupid, but when exactly does a distribution occur?

This is an ADP refund question. If the process to pay out a refund was started on 3/14/16, ie the shares were sold and converted to cash, but the trust account doesn't reflect that the money actually left until 3/16/16, is it beyond the 2 1/2 months?

Our recordkeeping software will show the distribution on 3/14/16 even though the money didn't leave the trust account until 3/16/16.

I know the safest answer is 3/16/16 is the distribution date but technically, did we make the 3/15/16 deadline?

Thanks.

How do you calculate the EBAR for someone who is nearing or has reached NRA?

Our testing system (DATAIR) for some reason assumes that once the participant reaches NRA (let's say the participant is 67 years old), that his retirement is always 2 years from that point (so in this case, it would be at 69 years old). It uses these numbers for the calculation of EBAR.

So, what happens is that once is someone above 65, his EBAR actually starts increasing (as opposed to decreasing when a participant normally becomes older, assuming everything else is equal).

For some reason, that does not seem right to me. Logically, once the participant reached NRA, he should continue to have 0 years until retirement and the calculation of EBAR should be based on the cross-testing factor table in which the years until retirement should be 0. So basically, it would make sense to me that if the participant receives the same Profit Sharing contribution as a percentage of his compensation year after year, his EBAR should be the same for any age after NRA (65 years of age in our case).

Our documents provide no guidance on this issue.

Could someone with experience with EBARs provide some guidance on this issue?

Thank you for your time.

A Section 125 plan is designed to reimburse a participant up to $400 of qualified dental services.

A participant is asking whether they can purchase an individual dental insurance policy, and be reimbursed the $400 that the employer offers towards the cost of the policy.

I think the answer is no, but I am not sure. Any replies would be appreciated.

Thanks.

A public university has a NQDC plan subject to 457(f). The annual benefit is never subject to a substantial risk of forfeiture so that amount is always reported as W-2 wages in box 1. However, the annual benefit is paid out to the employee only upon retirement, so it is not subject to income tax withholding while the employee is still employed. Because of this, the plan provides for annual distributions to help the employee pay the income tax bill on April 15.

My question is whether the annual tax distributions are subject to income tax withholding reported in boxes 2 and 17. Seems like they should be since they are a plan distribution.

Thanks,

Ken

Client has two 403(b) adoption agreements - a TDA for the employee contribution (Plan 002), and what they call their DC plan for the employer match (Plan 001). Recordkeeper is TIAA. Client filed two 5500s in 2009, and then TIAA "linked" the account balances in 2010 and the employer started filing a single 5500 using the Plan 001 designation. No formal plan merger was completed, and no final 5500 was filed for Plan 002. They take the position that both plans are subject to ERISA.

The employer changed auditors, and the new auditor is recommending a clean-up. Option 1: Take the position that the plans merged in 2010 when the accounts were linked (even though no formal corporate action was taken to merge the documents, and they continue to have two Adoption Agreements and two SPDs). Explore filing a delinquent final 5500 through DFVCP. Prepare a single plan and SPD going forward. Option 2: Take the position that they currently have two plans, and two 5500s should have been filed. Use DFVCP to file the missing 5500s for Plan 002, and amend the exiting 5500s to remove references to the assets from Plan 002. Then perhaps merge the plans formally and move forward with a single 5500.

I understand from a plan adviser contact that this issue is pretty common with TIAA plans following the finalization of the 403(b) regs, so I would love to hear if anyone has encountered it before. Thanks much!

a 401(k) Plan is terminating at the end of this month. One non-owner employee is beyond age 70.5 but still employed. Assuming he remains employed at least until 1/1/2017, does the plan termination trigger a 2016 RMD?

I'm not finding anything that says it does and I realize that a 2016 RMD would be triggered if he retires in 2016.

Loan taken out in July of 2015. No payments were ever made.

Is it deemed and taxable 12-31-15 or 1-1-16?

SOP 99-3 allows for the aggregation of account investments of a self-directed brokerage account into a single line item on Form 5500 Schedule H reporting purposes. However, FASB ASC 820 appears to require a supplemental schedule listing each plan investment as supporting detail. Is this true? Is the supporting detail required for Schedule H?

Hello. A participant took a hardship in 2014 and the deferrals were suspended. Who's responsibility is it to restart deferrals after the hardship? Its not stated in any procedures the plan sponsor keeps. In this case, the plan did not restart after 6 months.

Are there any special considerations in reporting the impact of stock dividends on form 5500 schedule h??

Now that the ADP deadline is past and I have a little more time to hunt some of these things down,

I think of this every time I feel out a Schedule C

Karaoke Time

........................................

Oh Schedule Cs

How I hate to report fees

What I lack, What I lack

The info that I lack

I abhor

Oh Schedule C

For my heart, it detests thee

Worrisome, worrisome

All these fees, worrisome

Where to start

Oh D-O-L

But this form is so sorry

Forgive me

And please wave the big fine

The schedule C

It came back with an error

What to do, what is wrong

Its messed up, whatd I miss

Its my fault.

Oh schedule C

Just how do I report thee?

Direct comp, not 5 thou

Oh no wait, its not that

It is more

Oh schedule C

Oh my dear Im so silly

Dont attach, dont attach

To SF, Dont attach

Oh this form.

return_to_me_r1_rt.mid

Representative of a MEP just called me and said they want me to terminate the 401k plan I administer, distribute the assets and file a final 5500.

Does joining a MEP avoid the 401k distribution/no plan for a year issue?

Doesn't sound right to me.

Thanks

Suppose a non-profit employer has a 401(k) or 403(b), and in addition, has a 457(b) plan. The 401(k) and 403(b) plans define compensation to include deferrals to 457(b) plans.

Suppose for a given year, the employer contributes $18,000 to the 457(b) plan as a nonelective contribution - the employee does NOT make a deferral election?

Although the general treatment of 457 employer contributions is a deferral for purposes of the elective deferral limit, it seems less clear to me how this should be treated for compensation purposes in other plans. 1.415©-2(b)(1) includes the clause ..."(or to the extent amounts would have been received and includible in gross income BUT FOR an election under....457(b)." (emphasis is mine)

415©(3)(D)(ii) says any amount which is contributed or deferred by the employer "at the election of the employee"...

So it seems to me that employer nonelective contributions should NOT be added back in as compensation for purposes of other plans, as the employee has made no "election" for those amounts to be contributed? Thoughts?

I can also argue it the other way - if it suited my purposes...

If an age 50+ participant contributed $18,000 for the 2015 Plan Year, can the employer make a Profit Sharing contribution of $41,000 and remain in compliance with 415 limits?

The participant had elected to contribute the maximum 401k + catch up limit of $24,000 for 2015 PY, however the payroll company ceased withholding Oct 2015... end result is only $18,000 deferred in 2015. Starting Jan 2016, withholding commenced again.

In light of the fairly recent IRS 3 new safe harbor procedures correcting missed elective deferrals, this employer seems to meet the 3 month correction period, therefore no makeup contribution required.

To make this participant whole, the employer would like to contribute $41,000 in Profit Sharing provided the $18,000 deposited can be characterized as $12,000 401k and $6,000 in catch-up by making such a contribution -- the reasoning being the "recharacterization" is necessary to comply with 2015 415 limits.

Thoughts? Thank you.

I want to track down the DOL guidance that recommends formally assessing a plan's recordkeeper on a regular basis. We look at fees all the time, but how often should we do a full-fledged RFP. Anyone know the DOL guidance off-hand? Thanks!