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!

I have a small PS plan with an integrated formula where the owner just wants to receive the same percentage allocation as his employees and forego the excess piece of the formula. I thought he could simply set the excess percentage to be 0%, but I'm not finding anything that specifically says he can do that (admittedly, just a 10-minute google search). Everything I find says that the excess percentage is the lesser of the base percentage or the maximum disparity percentage, without specific exceptions to be lower than that.

Any cites or insights will be greatly appreciated.

Not many people recall that the actor Fredric March was into
apiculture. He kept several hives of bees and produced honey for many
of his friends.

Fredric's friend, Sid Caesar went to visit him in his apiary one
spring day but was unable to locate the bee colonies. He did, however,
encounter one of the busy little insects gathering pollen on a nearby
flower so Caesar stopped and asked, "Bee, where're the hives of
March?

..........

It's a little known fact that Julius Caesar did NOT die from stab
wounds, but rather he died from envy.

Caesar and Brutus were master harpists and were often seen in fierce
competition. However, Brutus was more skilled as a composer, giving
him an advantage. Caesar began to lose the battle against the
brilliance of Brutus.

Caesar could surpass Brutus only in arpeggios. However, to Caesar's
dismay he saw that Brutus had produced a masterful practice
composition designed to improve his own arpeggios.

That was the straw that broke Caesar's spirit.

He died shortly thereafter, saying to Brutus with his dying breath,
"Etude, Brutus?"

We have a new plan. Plan was effective 1/1/15 with deferral effective 10/1/15. Plan is a safe harbor with 3% non-elective contribution. Plan uses full year compensation.

I have 2 employees who terminated prior to 10/1/15 but based on eligibility entered the plan on 1/1/15. Does client need to provide 3% non-elective to these terminated employees?

My answer is no since they were not eligible for the deferral portion of the plan because they terminated before that feature began. If not eligible for deferral, then not eligible for 3% non-elective.

Does anyone agree?

What would you do if you were aware of a TPA who had altered plan documents already signed by sponsor? Changes might be made well after the fact and to various selections on Volume Submitter Adoption Agreements, or corrections to amendments.

Help! an employee became a partner mid way through the plan year. For 2015 he has 415 comp and self employment earnings. To keep it simple he has 85,000 in 415 wages and 85,000 in self employment earnings. Contribution formula is 7.5% of comp plus 5.7% of comp in excess of 118,500. Since he only became a partner mid way through the year, he is not taking a deduction for the employees' contributions only his own for the self employment earnings. The other partners are taking the deduction for his contribution on the 415 earnings.

How would I calculate his contribution and divide it between the 415 comp and the self employment earnings? He also has deferrals for the year.

thank you

I have a plan where the following groupings are used in a "everyone in their group" plan:

Department Heads (probably ok!).

People w/ More than 5 Years of Service

People who terminated AFTER the end of the plan year

People who work less than 30 hours per week.

For those of you who read this and say "hey, is this the same plan he was posting about a couple of weeks ago?" the answer is yes, but my specific question here is, can I use the Average Benefits test.

I should point out that I have it from a very very trusted ERISA expert that allocating a zero % contribution to people with less than 5 years of service does NOT violate 410(a) as long as the plan otherwise satisfies coverage and nondiscrimination.

So, can I use the average benefits test with these groupings dictating whether or not people actually get contributions. It seems to me that a reasonable business classification can either be interpreted very broadly (hey, of course it's business!) or very narrowly (e.g., business lines, geographic locations, position)...

Does anyone have any great suggestions for code books? I'm not looking for the ERISA outline book, the Grey books or anything else, but rather books of the actual internal revenue code, including ERISA, and the treas. regs.

In this digital age, I know everything is available online, but I like have a printed book to highlight, mark-up , flag etc.

For quite awhile I've used "Selected Sections Pension and Employee Benefit Statutes and Regulations" by Bruce A. Wolk

http://www.gettextbooks.com/isbn/9781599415154/

The last version I have is from 2009, so other than for the basic 401(k) rules that I know i haven't changed, these days I usually use it just to figure out what code sections or regs might be relevant and then look up updates or the most recent versions online.

But it doesn't have things like §4971 excise tax section, §412, etc. And the treasury reg portion of the book is a bit small for my liking.

Does anyone have a great print version of the retirement plan code / Treas. regs that they would recommend?

​happy special pi day rounded to 4 decimals 3 14 16

Scholars argue about whether last year or this year is the pi day of the century, but clearly today, rounded pi day, is the people's choice for pi day of the century, since it's far more common to find round pi than square pi.

http://abcnews.go.com/Technology/pi-day-2016-extra-special/story?id=37630134

I have a copy of the K-1 with a number - say 200,000 in line 14A

Line 20 has an amount that is medical insurance payments - say 5,000

Then the client gave me the 1/2 self employment tax from the 1040.

They are also said the line 14A includes LTD and LTC Premiums. and gave me a reduced number that didn't include that.

Not sure what to use for compensation, as I have never been given a reduced number in the past.

Any ideas?

Pat

This has to be the oddest question I have ever asked. The law allowing banks to put into mortgages a "due on sale" clause, has an exception for trusts. This exception voids this clause when being transferred to a trust.

Is a 401(k) Plan a trust for this purpose?

Can anyone direct me to where i could find if corrective refunds for ADP are performed on a FIFO or LIFO basis?

I searched the forum and found a thread on the subject, but it referred to Treasury Regulation 1.401(k)-(1)(f)(4)(ii), but that seems to be regarding special rules for direct rollovers of Roth contributions.

I've been looking in chapter 11 of the EOB, but i can't find anything.

Thanks in advance!

For the party in interest rules of ERISA 3(14)(G), is an LLC treated as a partnership? Can't seem to find any express authority out there... Thanks.

When a benefit statement is requested and not otherwise required by law, can the plan charge the participant and, if so, is it limited to the reasonable charges of other requests of .25/page?

We have a 401(k) plan that uses a bundled insurance product that each participant has control over for their investment choices. During the 2015 plan year, the plan trustee/15% owner of the company named his brother as the investment broker for the plan. He is only receiving commission from the insurance company. Is this allowed or is he a disqualified person and we have a prohibited transaction? The definition of family member is spouse, ancestor, lineal descendant and any spouse of a lineal descendant. The commissions he is being paid appear to be reasonable. I just want to make sure I let them know that it's okay to retain him as I initially told them that I didn't think they could. Egg on my face, of course

Our client is engaging in a transaction wherein it will be acquiring a company and giving a chunk of money to the company's ESOP and the ESOP will distribute the money. I'm a bit concerned there is a prohibited transaction here. If it turns out there is, I've often heard the DOL say they will unwind the transaction.

How would that work here? The ESOP wouldn't have the money to be able to pay our client back. It seems unfair that our client would have to give the company back, but not get its' money back.