We have a public school that has a 457 plan paired with a 401(a) plan. They are asking if the 2 plans can be merged together. Is this permissible?

if a client files an extension on their corporate return for 2015, (they are an S Corp) - do they have until the extended due date to fund the profit sharing contribution to be able to deduct it for 2015? I think so, but want some back up. Thanks..

For a due date on an IRS inquiry, is that satisfied by mailing an item on the date or does it need to be received by the IRS by the response date? Can you tell me your support for this?

Can a VEBA be set up with an omnibus account? If it can't, can you provide me with a cite?

Don't I have to use the same account balance to calculate 2nd RMD when the 1st RMD is not paid out by the December 31 of the RMD year from a DB Plan?

Background information:

While the plan is on termination process in 2015, the 100% owner has attained Age 70.5. The owner elected single sum distribution from the plan to roll it over to IRA.

Based on my understanding of the Reg., one can use the exception in calculating the RMD based on the Account Balance method as if DC plan.

Also, since the owner participant didn't received the 1st RMD by December 31, 2015, he is due 2 RMD to be paid to him from the plan by his RBD of April 1, 2016.

can someone refer/provide me the section of the Reg. that tells me to use the same account balance in the above scenario?

IRS says "don't answer them!

https://www.irs.gov/Retirement-Plans/IRS-Compliance-Questions-on-the-2015-Form-5500-Series-Returns

So, yay.

If a participant has excess deferral, and when calculation the gain/loss the participant incurs a loss. I thought the proper procedure was to refund the full amount back to the participant and the loss was reported on the participants taxes.

per the below, I this method might not be correct.

(2007) IRS Publication NO 525 Elective Deferrals

Report a loss on a corrective distribution of an excess deferral in the year the excess amount (reduced by the loss) is distributed to you . Include the loss as a negative amount on Form 1040, line 21 and identify it as "Loss on Excess Deferral Distribution".

Please advise if the amount should be reduce by the loss.

I have a client who sold off part of their business during the plan/calendar year. Several HCE's were part of the sale and got distributions of 100% of their account. One of them rolled his $$$$$$ to an IRA. The 1099R's were prepared and sent by the platform they are invested in.

The plan failed the ADP test....refunds were due to one of the terminated HCE's.

I researched and found that he should have gotten two 1099R's - one coded for the corrective distribution as an 8 and one for the amount eligible for rollover. He originally only received one 1099R in January. This is an issue because who does ADP tests mid-year as a rule?

Other than corrected 1099 R's - what type of correspondence is the plan sponsor/plan platform/TPA responsible for sending to the terminated participant? is there a standard letter, notice. I assume this should come from the platform, but I found the issue....we are the TPA but have no control over funds.

Sorry for typo in title of topic.....

Does any IRS guidance prescribe the latest date by which an employee must submit claims for reimbursement of claims for reimbursement under a health care FSA? For 2015, for example, can the plan allow as long as to December 31, 2016 for claims submissions?

We have a plan that we discovered is in violation of Code Section 409A. We would like to correct it so that it is in compliance with Code Section 409A going forward.

If we do this, will amounts deferred under the plan in future years still be at risk for the 20% penalty since amounts deferred in prior years were deferred in violation of Code Section 409A? Even if we started a new, compliant plan, wouldn't amounts deferred under the new, compliant plan be subject to the 20% penalty since the new plan would be aggregated with the old non-compliant plan?

In this situation, do we just have to scrap the idea of having a nonqualified plan altogether?

21 & 1 with semi-annual entry

3% Safe Harbor using entry date comp

New Comp PS allocation, entry date comp, HCE’s receiving >15% of comp.

Plan is Top Heavy

NHCE Participant A hired 3/1/2014 and worked over 1,000 hours in first 12 months. A's work schedule changed to “as needed” 4/1/2015. Employed on 7/1/2015, and entered the plan 7/1/2015. Still employed beyond 12/31/2015, but no compensation during 7/1/2015-12/31/2015. A has $6,000 of compensation in 2015, all of it prior to 7/1/2015 and receives $180 of PS as a TH minimum since she is a participant and employed on the last day of the plan year.

Anyone had this situation come up before? If so, what did you do for gateway and (a)(4) testing?

does this count?
"Hello, Dolly!" won the Grammy Award for Song of the Year in 1965, and Armstrong received a Grammy for Best Vocal Performance, Male. Louis Armstrong also performed the song (together with Barbra Streisand) in the popular 1969 film Hello, Dolly!.
.........................

Hello, DB well hello DB
It’s so nice to benefit for working long.
You’re looking swell DB, I can tell DB
You’re still glowin’, you’re still growin’, you’re still goin’ strong
I hear the plan saying, a benefit it’ll be paying
For all those years of service from way back when So
it’s a snap fellas, a DB ain’t no crap fellas
DB’s will never go away again

Interlude

Hello, DB well hello DB
It’s so nice to benefit for working long.
You’re looking swell DB, I can tell DB
You’re still glowin’, you’re still growin’, you’re still goin’ strong
I hear the plan saying, a benefit it’ll be paying
For all those years of service from way back when So
PBGC fellas, a DB is guaranteed fellas
DB’s will never go away again

hellodolly-louisarmstrong.mid

We know that if a pension fund has had a mass withdrawal termination, employers must pay their withdrawal liability payments without the benefit of the 20-year cap on payments (redetermination liability). Such employers are referred to as "infinity payers" and may have to continue making payments for decades. However, it is my understanding that there is a practical limitation on the length of the infinity payments. This occurs when the pension fund no longer has any living participants and beneficiaries so that there are no longer any pension payments being made and no reason for the associated pension trust to continue. Upon such trust termination, it is my understanding that employers no longer have to continue making withdrawal liability payments. Does anyone have any authority that confirms this understanding? I am having trouble finding it athough it makes sense and several actuaries so believe. Thanks.

I have a client whose owner is also 100% owner of another company. Both companies maintain their own plans and both just converted to a safe harbor for 2015. The owner has compensation at both companies but only defers to the plan I do not administer. His compensation at each company is below the limit for 2015 but combined is over the limit. Obviously he does not receive a 3% safe harbor contribution from each employer because that would put him at over 3% of the annual compensation limit. The client is hoping that the plan he defers in can just give him the full 3% of $265,000 since it is a controlled group. I've researched but I can't find anything regarding this situation. Does he need to get something in each plan or is doing it all in one plan permitted? Thanks!

This plan is an age weighted, 3% non elective safe harbor, calendar year 401k plan. There are two HCE's. One HCE is younger than the 2 NHCE's. As a result the rate group test and the average benefits test fail for 2015. Is it possible to give the two NHCE's a higher contribution to get the general test to pass? The compliance software I use indicates it can't be done because they are not in a separate allocation group like a new comparability plan.

Mr. Smith is a Participant in a Defined Benefit retirement plan. Mr. Green was previously married, but this ended in divorce about 8 years ago. In the Settlement Agreement with his first wife she was awarded 50% marital share of his pension. He subsequently remarried about 5 years ago.

Recently Mr. Smith filed for retirement and he chose a 50% JSA with his current spouse. Approximately 6 months after Mr. Smith’s retirement his former spouse filed a QDRO to the plan administrator asking for 50% of the marital share of Mr. Smith’s pension in a Stream of Payments. Her attorney, however, asked for a 50% marital share of the Single Life Annuity (SLA) amount, and not the marital share from the payments being received by Mr. Smith. His reasoning was that Mr. Smith's former spouse should not be subsidizing the JSA awarded to the current spouse.

Mr. Smith’s attorney argued that Mr. Smith, because he was married when he retired, was required by ERISA law to select a 50% JSA naming his current wife as beneficiary, unless she declined the benefit in writing. The only other way in which the previous spouse would have had access to the SLA would have been with a selection of a “carve out” (separate interest) annuity through a QDRO submitted prior to Mr. Smith’s retirement.

What happens in the situation where the ex-spouse believes her portion of the marital share should be based on the (fictitious) SLA rather than on the current payments being received by the Participant?

EPCRS says we need to adjust excess allocations for earnings (someone was over-matched).

Section 6.02(5)(a) says if you cannot make a precise calculation, you can make [a] "reasonable estimate." Then, if a reasonable estimate is not possible, we can use the VFCP calculator.

We are in a situation where a precise calculation would be too onerous and expensive. However, I believe the DOL calculator just compounds the error by imputing gains on the excess allocation where most accounts over the time lost money.

Since there is no published (by the gov't) "reasonable estimate," management says we should go with the DOL calcuator for now.

(There are Earnings Adjustment Methods in Appendix B, but they specifically state the section doesn't apply for corrective reductions of account balances. Further, it says to look to "section 2.02(2)(a)(iii)© for rules that apply to the Earnings adjustments for such reductions." Umm, Section 2.20 is "Modifications to VCP submission procedures" and has no subsections.)

So, I'm looking for anything published as to what might be considered a "reasonable estimate" that would apply to excess allocations.

I have a new situation and I am not sure how to correct the error. A company started a new safe harbor 401k plan in 2015. Employees completed forms and elected to defer. The payroll company entered the employees' elections in their payroll system, but coded them as "safe harbor". The employer used the payroll reports to submit the "deferrals" to the plan each pay period. The employer also submitted the safe harbor match each pay period based on the "deferrals". The deferrals were never withheld from the employees' pay. The employees' W2's show no deferrals. The employer technically corrected the "missed deferral" each pay period during the year. There were no lost earnings because their "deferrals" were deposited each pay. They also received the correct match each pay. The employer funded the deferral for all of the employees for the entire year. Should the "deferrals" be coded as QNEC? Has anyone ever have this situation before? Does anyone know what the proper correction should be?

a more realistic approach to the world of DBs and actuaries as
presented by

Sam Cooke in "What a Wonderful World"


Don’t know much about this DB
There’s a funding de-fi-cien-cy
And I know that they are on the hook
I-R-S wants to take a look
And I do know that the dollars are few
And the contribution’s overdue
What a terrible plan this DB

Don’t know much about ac-tu-ar-ies
No sense of humor, no per-so-nal-i-ties
Let us cut it quickly to the core
Everyone knows they are a bore
They will tell you one and one is three
Or whatever you want it to be
What a strange world this ac-tu-ar-y

Now I know, I’m not an “A” student [“A” for actuary of course!]
I’m not trying to be
For maybe by being an ac-tu-ar-y
No one would understand me

Don’t know much about P-B-G-C
Supposedly it’s a guar-an-tee
Then the rules changed under P-P-A
Even more confusion to this day

So let’s eliminate them two by two
For if actuaries were a few
What a wonderful world it would be.

Instrumental pause

So let’s eliminate them two by two
For if actuaries were a few
What a wonderful world it would be.

wwrld.mid