I have a client with a 457(b) FICA Alternative Plan. The employer contributes 13% of compensation to each employee's account and the employee has the option to defer more (up to the applicable limit).

Employees are starting to realize their social security benefits (primary or spousal) are reduced below their expectations.

The employer understands the reduction due to the employer contribution, but is having a hard time understanding the reduction due to the employee's discretionary deferrals.

My understanding is that:

1. the discretionary elective deferrals are not subject to FICA when deferred

2. the reduction in benefits is determined by either WEP or GPO and doesn't really delineate between what the employer contributed and what the employee elects to contribute.

Am I missing something?

I've seen some other threads on this topic but still somewhat confused on this issue. A plan is a safe harbor match plan with no allocation of other employer contributions (including profit sharing). The plan excludes bonus compensation. When the 414(s) test is run it fails (none of the two HCEs have any bonus).

What is the correction, if any?

I was reading a Q&A from an Ft Williams presentation and they mentioned that if you have a safe harbor matching plan and choose to exclude bonuses you do not need to apply the compensation ration testing.

I've got a 403(b) plan that wants to leave the current fund platform, but there is a decent back-end charge that would hit the accounts. The plan sponsor would like to cover the fee, but the fund company will not bill the plan sponsor; they will only debit the accounts.

Is there any legal mechanism for the plan sponsor to 'reimburse' each account for the amount that was taken as fees? This is a plan with no HCEs, so there's not a nondiscrimination problem to worry about...

Can a business owner who is over age 70 1/2 establish either a SEP-IRA or a SIMPLE-IRA and contribute?

It looks like RMDs will be required each year ahead but I'm not certain if contributions are allowable past age 70.5 for the business owner.

Company A has a long term, Trustee Directed PSP on the books. About 300 employees in total.

Company A buys a new business, under new DBA and corporation. Does not want to add the employees from the new Acquisition to the existing PSP. Would prefer to keep them separate. Does not want to offer a plan to the employees of the new business.

Is it possible to keep the existing plan, with no additional new money contributions?? Or would the plan have to compensate the new employees from the new acquisition? Or have to dissolve the existing plan if not willing to add the new employees to the existing plan? Or start a new plan all together for them??

THanks,

T

I have a participant that wants to roll over money from his former employer's ESOP plan into his new employer's 401k plan. The 401k plan does allow for rollovers.

Is this possible? Would he be better off not rolling it over?

Thank you.

deleting post - information provided to me was faulty.

I am starting to second guess myself here. Who does the notice go to on a plan conversion to another carrier? All eligible participants or participants with account balances and terminated with balances?

Just curious as to how things are handled in real life, and if theory and reality match.

Suppose you have a 401(k) with PS component. Non safe harbor, new comparability allocation formula. Let's say the plan definition of compensation INCLUDES applicable post-severance compensation. Calendar year plan. Assume for this poll purposes that participant is NOT highly compensated or key.

Participant terminates employment on December 15, 2014. In February of 2015, some post-severance vacation pay is paid. Participant never did any election to cease deferrals. Employer never reports this post-severance comp to TPA or plan auditor, but it naturally shows up on the 2015 census.

1. Do you: (a) treat it as a "missed deferral" and correct under SCP, or (b) handle in some other fashion?

2. With regard to profit sharing contribution, do you (a) (make the contribution under SCP that the participant should have received, and leave it at that, or (b) something else?

3. Now assume the participant was HC - any changes in your answer to #2 above?

Just curious. Don't have this situation, but another related question brought it to mind.

Company X is a corporation organized and operating in the US. It maintains a number of subs in the US and abroad, including one in Chile. P is a US citizen and is working in Chile (having been transferred there by X). X has a self-insured medical plan. Assuming that P will be retained on the Chilean payroll, how can X arrange to cover P under its medical plan?

Client has terminated PC safe harbor 401K because he can not afford the match.

He has matched 3% non-elective through the date of termination, 8/31.

Must he do the 3% non-elective on W-2 for the full 12 months or just for the 9 months through date of plan termination?

I believe only through date of termination.

Trying to understand what rights the ESOP shareholders have under the following scenario.

A company is moving from Situation A to Situation B.

Situation A:

100% ESOP-owned S-Corp holding company

Situation B:

~10% equity ownership of an LLC

~90% ESOP-ownership of LLC

We have a safe harbor enhanced 4% match 401(k) plan. The only two participants are a step-mother and a step-son. The step-mother deferred and received a 4% safe harbor match. The step-son did not defer. The step-son made double in W2 wages compared to the step-mother but both wages are below the integrated level. With that in mind, the step-mother can only get 21% maximum in a profit sharing contribution. Can the step-son also only get 21% or can he receive the entire 25% in a profit sharing contribution? If the plan has a prorata profit sharing then the step son can only get the same proportion in profit sharing as the step-mother?

We've been capping HCE's at 8% to avoid testing failures and refunds. A participant has been deferring 5% all year but now wants to maximize her contribution for the rest of the year. We have quarterly changes so she can increase her deferral to 8% on 10/1, and is over 50 so will also elect catch up contributions as well.

My question is how can we help her have the maximum withholding possible? Is there a way to set up her catch up contribution to take advantage of the full $6,000 between now and year end? Any ideas would be appreciated.

Company X, a US Company, maintains its headquarters and the bulk of its employees in the US. It has a Chilean sub to which a number of US citizen employees have been assigned. What are X's options for covering these employees in the US benefit plans (viz., 401(k) and medical plan)?

I have a 12/31 plan that needs to refund a few hundred dollars to a participant for 401k deferral b/c it was erroneously with held on severance pay in 2015. What is the best way to correct this now in 2016? Just a check to the participant and what is the tax code? Is there any other way? TIA.

During 2015, match was incorrectly calculated for several NHCE employees - they all received too much match money. My question is - if we move this excess to the forfeiture account - what, if any, earnings are required to be calculated and what is an acceptable method to calculate earnings? What if their account had a loss during 2015? Do we HAVE to reduce the amount moved to forfeiture by the loss? I don't think any refunds would be in order since they were not due this match in the first place.

Thoughts? suggestions? Thanks!

What are the disclosure requirements when terminating one person Non-PBGC DB Plan (any checklist)?

Does any of PBGC Standard Termination disclosure requirements including NOIT applies?

Plan sponsor wants to end one welfare plan on 12/31 and merge it with another existing plan on 1/1 (the next day). For 5500 purposes this would mean a terminated plan is ending the plan year with participants. What is the general best practice way to do this? My preference would be to terminate and merge them on 1/1.

Bonus question - can a welfare plan be terminated on 12/31 with the resolution being signed the following calendar year?

A plan is adding Roth deferrals as an option mid-year. Should each participant be required to complete an updated deferral agreement?