A plan was set up with a start date of 5/1/2015 for purposes of processing a plan transfer in from a multiple employer plan (MEP). However, per the document, contributions were stated to start deductions on 6/1/2015.

This plan had only 15 participants transfer money from their former plan under an MEP. The plan has > 150 people eligible on 6/1/15 (even though maybe 10 people actually contribute).

Would this plan qualify as a large plan and therefore have to have an independent audit for 2015, or do we say its a small plan for the initial year by using the 5/1/15 start date?

Thanks for any feedback.

Plan is a calendar year plan.

Plan is converting to a MEP 7/1/16.

Since the conversion is mid year - can I use full calendar year wages for 401k testing and can I still test the groups together in this year of conversion?

I'm not quite sure how the 410(b)(6)© rules apply when I'm taking a plan into MEP territory....

It's converting to an open MEP, but the employers in the plan this year are carryovers of those already in the plan previously so they are related

Question 1: Plan is a multiemployer DC plan classified as a profit-sharing plan. Employee contributions are not permitted. All contributions are from employers only as dictated by a Collective Bargaining Agreement. Can that plan allow hardship withdrawals?

Question 2: Assume that the Plan can add hardship withdrawals. It adds the safe-harbor hardship withdrawal language effective July 1, 2016. Are participants able to access their entire account balances come July 1? Or is it only on money that is contributed on or after July 1, 2016?

Thanks.

I have a plan that started 1/1/2015. It has 1 year of service and 1000 hours for eligibility. It also had open enrollment on 1/1/2015 to allow employees to come in that had worked for another company.

My question is regarding the count on the Form 5500. I have informed them that they need an accountant's report since they are a large plan. They are given me push back on it.

My counts are as follows:

line 5 is 124.

6a(1) 0

6a(2) 115

6b 0

6c 5

6d 120

6g 37

Is there any way around not having to file as a large employer?

Thank you.

My client is a dentist in a dental office shared by two other dentists, each with his own PC.

Some of the employees are shared among the dentists, and that has been addressed and not part of this discussion.

The three dentists own identical interest in a corporation they formed, the sole purpose is for medical billing, paying the office rent, and other joint expenses, etc for each of the dentists.

My client is covering his employees plus his share of the shared employees in his current plan. He also gives a W-2 to two employees who work for the corporation - one is part- time, a few days per week; the other is full-time.

Looking at the ASG/Management Org regs, I would think that this is an ASG situation, my client has to cover the full-time employee who is paid from the separate corporation, but not the PT employee who only works a few days per week.

Or, the employee could waive out (but why would she?) or be excluded from participating, as long as the plan passes 410(b).

Any thoughts??

Assuming the plan document allows - can a 401(k) plan force out terminated participants, who have attained normal retirement age, and have a vested balance over $5,000 (no rollover) ? If it can be done, I'm sure it would be to an IRA (or annuity if that is the plan's default payout form), not as cash.

Mind you - this would not be part of a plan termination in any way. It would strictly be due to age.

I had never heard of such a thing outside the context of a plan with annuities. but today, as part of John Hancock's webinar series, Kimberly Martin's presentation on distributions seemed to have stated exactly that.

From part of her slide:

Terminated at age 65 (NRA)

$100,000 Deferral

$50,000 Match

$150,000 Balance

--> No consent required

-->Default form

Is she talking strictly about plans with an annuity as the default form of payment? Most of the 401(k) plans I work with have no annuity provisions.

For a plan with no annuity provisions, and the force out would be to an IRA, is the force out still possible? (assuming of course all of this is in the plan's doc)

Anyone have a regulation? other citation?

We have what I shall euphemistically refer to as a "difficult" client who doesn't like to provide any information that we ask for.

They recently sent us an e-mail with a section that had been cut and pasted from somewhere unknown, asking for information on costs of any Defined Benefit and Defined Contribution plans. Client referred to this as a "us census data request." Although we are trying to get additional details, as I said, client is difficult and may not provide.

I was just curious if anyone had ever seen any type of similar request, or could fathom a reason? I doubt it is a scam, although of course it could be, but I'm having trouble imagining what, if any, government agency would be asking for this and why. Don't think there is anything connected with the ACA that would request this...

Anyway, any thoughts appreciated.

Interested in guidance regarding how to go about correcting a share allocation error for a few years similar to the situation described in TAM 201425019. Our facts are not exactly the same as the TAM but close--basically a different variable interest rate from the one required by the plan document and loan document, etc. was inadvertently used for a few years which resulted in slightly fewer shares being allocated than should have been.

The allocation error seems easy enough to address and to put participants back in the position they should have been in by recalculating the allocations and allocating the few missed shares to affected participants through VCP / EPCRS.

In addition to that, however, seems we have a prohibited transaction issue as well and presumably need to pay an excise tax. In the TAM, the ESOP apparently got audited by the DOL and the DOL agreed not to take any action (i.e., no excise tax / penalty) if the ESOP corrected by fixing the share allocation which it did. The IRS, however, apparently came in on the heels of the DOL and determined that an excise tax was due.

In our case, we do not have an audit by either DOL or IRS. ESOP just wants to correct and is willing to pay the excise tax. Can it file VCP under EPCRS and also pay excise tax to the IRS but not pursue a separate correction with the DOL? Alternatively, should it try to notify the DOL of its correction with the IRS or perhaps fix with the DOL directly and not pay the excise tax to the IRS? (I have been thinking this might play out similar to delinquent contribution situations where an excise tax is paid to the IRS and DOL follows up based on the affirmative Form 5500 response but does not pursue further action once notified of the correction/ excise tax payment to the IRS.)

Would welcome any guidance / experience on dealing with dual IRS / DOL regulation in this context. Thanks.

I have a plan that has terminated, but the employer is still continuing. We are now working on the final administration, etc. before payouts. A participant is requesting an in-service distribution (which was allowed by the plan). Is this still a valid request after the plan termination date? Thanks.

Can catch-up contributions be excluded from the ABT?

A 501©(3) org changed to a governmental employer. The 501©(3) org had a 401(k) plan that they froze when becoming a governmental employer. They then started a 457(b) plan and 401(a) profit sharing plan that matches deferrals in the 457(b) plan.

They would like to get rid of the 401(k) plan. Is the 401(k) plan considered a predesessor employer plan so they can't terminate and disburse the deferrals until an event? Can they merge the 401(k) plan into the governmental 401(a) plan?

I can't find anything definitive. I think they may be stuck with the frozen 401(k) plan.

Thanks!!

I have a plan adding a QDIA to their plan in 2016. It is on a FT William VS prototype. The Adoption Agreement does not mention the QDIA, it is included in the administrative elections.

Since it is not mentioned in the adoption agreement, I'm assuming that an amendment does not need to be made.

Is a corporate resolution or any other type of documentation needed to add it to the plan?

I just returned from vacation to discover that a plan for which I am the TPA and document provider persuaded an attorney to draft a plan termination resolution effective upon signing (last week). No advance notice was provided to the employees. The termination was required by the company purchasing the stock of the plan sponsor, who failed to act do anything until the day before the closing.

What are the possible repercussions of failing to provide appropriate notice of terminating the safe harbor contribution? I don't know if the employees are still being paid by the plan sponsor, or are now being paid by the new company.

The plan calls for a 3% non-elective safe harbor contribution based on full year compensation (even for mid year entrants). The recordkeeper was directed not to accept any additional contributions as of last week, although additional contributions will be required for any 2016 new entrants. Our relationship with the recordkeeper is such that I expect to be able to fix this.

Since the deal has apparently already gone through, what happens if the new owner refuses to fund the required contributions?

I have a client who is a technical school with different campuses all in one plan. Each campus processes it own payroll and has its own EIN #. They file a consolidated Tax Return with all EIN #'s listed.

Should they have each signed a participating employer adoption page when the PPA document was executed?

Since they didn't, what options do we have for correcting? Will we have to file under VCP?

Extremely small plan sponsor (maybe a dozen participants) - with the owner going through a divorce.

The TPA received a subpoena demanding copies of all information about the owner as an individual, as well as all information regarding the business, on paper no less.

No mention of the retirement plan whatsoever.

Of course all the TPA records on that plan relate to the owner and the business, how could they not?

Overly broad, no?

Thoughts?

Looking for any suggestions on how this fact pattern is typically handled:

Tax-exempt entity has an annual incentive plan set up in much the same way as, for example, a public company. There are target financial and qualitative goals then threshold, target, and maximum bonuses. The measurement period is the calendar year.

Payouts are made by March 15 of the following year to avoid 409A. Employees must be employed on the date of payment to receive the bonus, so the vesting date for typical active employees is the date of payment. Income and FICA taxes are due and withheld from the payment. No 457(f)-specific problems as the vesting and payment years are the same.

However, employees who die, become disabled, or retire (with typical criteria, e.g., 65 with 10 years of service) during the plan year are awarded a pro-rated bonus paid at the same time as the normal payout date. Their otherwise-applicable performance criteria must be met, but they don't have to continue working. The financial performance is determined as of December 31 of each year (but "officially" approved after the close of the year). I don't think this would maintain a SROF until the administrator or committee officially approved the financial results. It sounds like everything is vested (if it ever will be) as of December 31 each year.

So do the dead, disabled, and retired employees owe taxes during the plan year in which they die, becomes disabled, or retire?

Company, for a Welfare Plan with a PYE of 12-31-2014, filed the 5500 with 2 Schedule A's, with a policy date of 3-1-13 to 2-28-14.

Company merged during 2015, but still must file a (final?) 2015 Form 5500 with Schedule A's for the policy date of 3-1-14 to 2-28-15.

But what about the Schedule A period 3-1-15 to 12-31-15 (all Welfare benefits were terminated 12-31-15, and the Schedule A's have been obtained for this time period)?

Question is can a Final Form 5500 for 2015 be prepared using the 2-28-15 policy date Schedule A's? Or is there another filing in there somewhere??

Employee A has money in a company 401k plan. Employee A is severely injured in a car accident. Husband of Employee A has power of attorney. Can husband request a hardship distribution from the company 401k plan to pay medical bills using his power of attorney?

Code section 414(k) provides for a combination DB/DC plan. However, I'm trying to figure out whether the DC portion can allow for discretionary contributions.

What we're basically trying to do here is to have the contributions to the DC portion go up or down depending on what contributions to the DB portion are required. While I may be able to figure out a formula under which that would happen that does not involve employer discretion, it would be a lot easier just to allow for discretionary contributions. However, while 414(k) talks about a combined DB/DC plan, it does not explicitly provide for a combined pension/profit-sharing plan. (A combined DB/DC could be a DB/money purchase plan, which would still be entirely a pension plan.)

For technical reasons, we don't want to have two separate plans. However, it seems to me that if the structure would be allowed in the case of separate plans, it doesn't make much sense to disallow it if the plans are combined.

However, I'm particularly concerned because 414(x), which provides for combined DB/401(k) plans, is limited to small employers. I'm wondering whether the negative implication is that other employers can't have combined DB/profit-sharing plans.

Has anyone seen any guidance, or had any experience, with this?

401(k) plan with 150 participants at the beginning of 2015 (80 were eligible but had no balances). In August of 2015 the plan adopted a resolution to terminate the plan but the company is staying in business. As of 12/31/15 there were still around 60 employees employed by the company (had not terminated employment) that still had balances due from the 401(k) plan.

My understanding is the employees with no balance are no longer participants since the plan terminated. The count would only be 60 and the plan would not need to be audited in 2016.

Per 5500 instructions, Active participants (i.e., any individuals who are currently in employment covered by the plan AND who are earning or retaining credited service under the plan). Since no balance are not earning or retaining credited service.