Suppose a plan sponsor had been issuing company stock as a form of match contributions to employees who deferred into their 401k plan. Now suppose the plan document provisions do NOT list this type of match, and the stock certificates were not listed in the name of the plan. Keep in mind that while these WERE match contributions, they were also NOT officially part of the plan.

By offering these employer stocks, has the plan sponsor violated the Contingent Benefits Rule? If so, how can this be corrected, as this type of violation is not listed under the VCP covered transactions?

We have a 401k Plan where the owner of the company has never received a payroll check or been listed as an employee in any census records. He has owned the company for over 10 years.

They always fail ADP testing. They want to know if he starts getting a payroll check in the last quarter of 2016 and does not defer, can his compensation for 2016 be counted in the HCE group to help with passing the ADP testing.

My first question is what is his real hire date? Their plan has a six month wait; no age requirement, and monthly entry. Second question, is when is he really eligible to participate in the plan? 2016 or 2017 after he meets 6 month eligibility.?

Any comments would be welcome.

We have a company that offers a wellness incentive, which is a dollar amount based on years of service to be used towards medical premiums or reimburse certain wellness items such as gym memberships.

This incentive is reported on W-2 and their plan document states to use W-2 income and does not exclude any type of compensation. They would like to amend document to exclude this wellness incentive from compensation. Could this type of amendment be done retroactively to beginning of current or prior year? (This is not a Safe Harbor plan).

Assume a corporation has a fiscal 9/30 year end, but it sponsors a DB pension plan with an 11/30 year end. And the contribution for the 11/30 plan year is $120,000, which is deposited before the due date of the 9/30 tax return.

How much is deductible on the 9/30 tax return? The full $120,000, or 10/12 x $120,000?

And does the answer change if the owner (who has most of the income) took the bulk of his income during November (after the corporate year end)?

Any help is appreciated. Thanks, Greg

Are there legal reasons why a Buyer may request a Seller to transfer its health and welfare benefit plans immediately prior to a stock deal? (Similar to typical provisions in stock purchase agreements where buyers may request a seller to terminate their 401(k) plans just before closing because of the 401(k) plan rules?)

That is a new twist on me but I can imagine there might be particular types of health and welfare plan offerings (e.g., some HDHP, HSA arrangements, etc.) that could potentially cause conflicts or issues for Buyer's general plans if the Buyer has those within its controlled group for a particular plan year (even if momentarily and the Buyer otherwise intends to terminate those plans).

If that is the case, can anyone provide a brief explanation of the issues and types of plans impacted?

Thanks

My apologies if this has been asked and answered; I haven't seen it yet.

Employer offers coverage to all employees working 20+ hours per week, with employee cost and coverage options identical regardless of hours worked. New employee in initial measurement period working 20 hours per week transfers to a new position that would have been 30+ hours per week if new employee had been hired into it. New employee is not yet in the administrative period.

Does the employer have to re-offer coverage, consistent with the ACA timing rules, when the employee moves to the new position, or is the initial offer of coverage when hired into the 20 hour per week position enough for the employer to avoid an ACA penalty?

Thank you for any insights!

I have a husband and wife with multiple companies that both want to be in a cash balance plan. They are both physicians. The wife owns 100% of of a management company. The wife also owns 100% of her MD, LLC. Her husband also owns his own MD, LLC. Both MD, LLC's pay management fees to the management company and the wife receives compensation from the management company.

I believe the management company creates an affiliated service group with the 2 MD, LLC's. Can it also be a controlled group?

The management company is shutting down and will cease to exist. Can I set up a plan under the wife's MD, LLC and include compensation from the management company as long as it is still around? After the management company shuts down, can I maintain the plan as a controlled group between the 2 MD, LLC's as they have attributed ownership due to their marriage?

IRS auditor is telling our client, a large college, that the students who work in the summer and continue to be excluded from 403(b) Plan while wages are not exempt form FICA must be offered participation in the Plan for elective deferrals, and is requiring make up missed 403(b) deferrals. This impacts more than the year under audit (2014). All students were enrolled full time in spring and fall semesters, and majority have wages that will result in make-up contributions of <$75. Fear if we agree to correction, they will go back to 2009. They will correct practice prospectively (in summer 2017).

Has anyone else had this issue raised? We have had DOL and IRS audits of other colleges where this issue was never mentioned.

The QDRO says nothing about our distribution fee. It says to give the alternate Payee $5,000 +G/L form August 12, 2016. Do you think we can take half of our distribution fee out of her $5,000?

I am familiar with the new regs about adding ABA to all fully insured plans. Our self-funded plan currently offers some ABA therapy for speech, etc. However, we don't cover the full ABA treatments such as diagnosis, therapy, etc. since it would cost the plan $500,000-$1,000,000 a year for mid size company. In your professional opinion, could this be treated like OT/PT with number of visits being limited (20 visits a year) or maybe some other kind of other limit? Also can we limit it by age such as for children 5 and under since they would get free services through public schools (depending on the state)?

12/31/2014 - Sole Prop and 1 W-2 EE

During 2015 - EE terminated and paid out

12/31/2015 - Sole Prop is only Participant in plan

Can SProp file an EZ or one more year of e-filing?

Can't find anything in the instructions to answer the question.

Thanks

I've never heard this before - another TPA is saying you don't have to file an 8955-SSA if the participant has less than a cash-out benefit.

I've never heard this before, and I suspect what they really mean is perhaps they don't normally report, under the assumption that the cash out benefit will be timely distributed, under the terms of the plan.

But, it seems to me that if they don't get it distributed, then there's no exemption from 8955-SSA reporting just because it is less than the cash-out amount.

Anyone else ever heard anything like this?

We are a CPA/TPA firm. We have just taken over a tax new client. They asked us to prepare the Form 5500-EZ for their solo 401k. It turns out they should have filed for 2013 and 2014 as the assets exceeded $250,000 in 2013.

Typically, we would prepare and e-file the Form 5500-SF and mark one participant plan. However, I believe the penalty relief for the EZ form requires a paper filing.

Should we paper file the 2015 Form 5500-EZ? or use the one-participant Form 5500-SF and e-file?

All thoughts and suggestions appreciated.

How do people feel about using EPCRS SCP to retroactively add a participating employer if the related employees were allowed to participate?

The entity was small relative to the existing employer and all were NHCE's.

The SCP for this appears tor reference situations where employees were allowed to participate before completing the initial eligibility age/service requirements. It just seems like this issue is so materially similar that it would pass muster.

I have always told people someone is eligible for the plan with respect to the first pay-DATE on or after plan entry date. I'm thinking their must be an article or something on point clarifying that when compensation is earned is not relevant, it is when it is received that matters.

Any help appreciated cuz it comes up all the time...

I am wondering if anyone knows of a "best practices" type of resource for operating multiemployer DC plans. I've kind of been dumped in the middle of managing a multiemployer DC practice that needs some modernization, and I don't know where to begin!

Any help is appreciated.

I am working on article for a benefits class in which I am enrolled and need some data. I am not an actuary nor do I have an actuarial model but am hopeful that a member can assist. I would like to know the sensitivity of returns of pension plan trusts.

For a typical trust, what is the project long-term rate of return? Say it is 7%, what is the company’s pension liability? What happens when the rate is increased to 8%, 9%, 10%, 11% and even 12%? If anyone has a live dataset and model and could provide this information as a favor, I would truly appreciate it. And, if the article ever gets published, I would of course give attribution and the possibility for additional input into the project.

The article is due in just a few days and this information would be quite useful. I would appreciate any help that you could provide.

It's late Friday in the heat of extended 5500 season, so perhaps I'm not thinking straight...just need to bounce this off someone.

Situation:

Xtested Plan; highest rate to HCE = 20%

NHCE's receive 10%

Comp counted from date of entry

Conclusions:

Therefore all NHCE's receiving an allocation must receive at least 5% since 1/3 of 20% > 5%.

At 10% that's all fine except for new participants.

Is it correct that they must receive at least 5% of full year comp?

Where I'm fuzzy is if there is some 1/3% test we can apply to each participant?

If the Employer began in March of 2016

1- can their new plan have an effective date of 01/01/2016 for a calendar year?

2-does it matter what type of entity they are- ie corporation; sole prop etc

I know IRS said at 1997 ASPPA it's ok- but I am getting push back from my company's doc dept

A retiree has been receiving a retirement benefit based on his election of the 10 year certain only optional form of benefit over 10 years ago.

Is there any sample letter out there to inform a retiree about the coming of the end the 10 year certain only optional form of benefit?