Company X has historically paid those of its employees who went out on short-term disability a percentage of their salary during the period of disability out of its payroll, and it deducted 401(k) contributions and included the benefits received in the employee's compensation. Company X has decided to provide short-term disability on an insured basis or a self-insured basis administered by an insurer. Employees on short-term disability receive payments from the insurer and the insurer issues a Form 1099 to reflect the amount of benefits that were taxable (all of them since it is provided on a noncontributory basis). Is there any way that 401(k) contributions can be deducted from these amounts, albeit in arrears and not violate the requirement that deferrals have to be made from prospectively received compensation?lllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

I will preface this post with stating I know very little about church plans and how they operate - however, I've received a question and hope someone out there can help.

One of our advisors is trying to set up a church plan and was asked - if the pastors are receiving contributions in this plan, does it cause any issue with the "tax-free" status of their housing allowance?

Thanks, in advance, for any guidance!

We have one participant who received a QNEC in 2015 because the company incorrectly believed he never enrolled. However, he has submitted enrollment paper work to them a couple of years ago and was attributable to receive the amount he chose to defer. Now, the QNECs have been funded on his behalf to compensate him for missed deferrals.

I have a couple of questions:

1) Should these QNECs be counted in the ADP/ACP tests or should they be ignored?

2) Since the participant missed deferrals for a couple of years and received the QNEC in 2015, should that QNEC be counted as received in 2015 (and tested only in 2015), or be considered individually for the years in which the failure took place (and be counted for testing in those years)?

Thanks for your help.

But the groups are operationally defined as follows:
People with More than 10 YOS get 10%
People with More than 5 YOS get 5%
People with Less Than 5 YOS get 0%

Please tell me the consensus is that this violates ERISA. Prior TPA said "No, it's ok because everyone is in their own group."

Defined Benefit pension plan permits Lump Sum benefit upon retirement (Normal or Early at Age 55). Participant just turned 55, wants to "retire" and take his large Lump Sum payment, and return to covered employment immediately after. He has expressed to the plan administrator and his employer that he has no intention of retiring, but wants to take his lump sump payment now.

The Plan defines Retirement as follows:

Retirement - The term "Retirement" shall mean termination of employment for reasons other than by death after a Participant has fulfilled all of the requirements for entitlement to a Normal, Early, Normal at Age Sixty (60), Normal at Age Fifty-Five (55), or Disability Retirement Pension. Retirement shall be considered as commencing on the day immediately following a Participant's last day of employment, as determined in the sole and absolute discretion of the Trustees.

Thoughts on whether this is permissible?

Brother Sister group exists between our Plan Sponsor and another company. The other company is Canadian. I understand that we would not have to consider any nonresident aliens with non us based income in our coverage testing. I am concerned, however, that if the Canadian company has US employees working for them in the US. I am curious, in practice, how other administrators handle this. Do you ask, as part of the administration work about US employees of the foreign entity? Am i correct that if any do exist, they have to be considered for coverage testing?

Thank you

The beneficiary of my uncle's IRA is a trust fbo my brother (my brother needs someone to manage the funds or else he will spend them). As trustee of the trust, I want to change custodians. How can I do that without suffering tax consequences? I want the IRA to be at my bank so I can make quarterly distributions to my brother (which I know he will be taxed on when paid). My bank is telling me that the trust can't be the owner of the IRA. Any sight would be greatly appreciated!

We just realized we didn't pay FICA upon vesting OR upon payment. We want to go back and fix it. Since the IRS can only audit going back 3 years, are we safe just correcting back to 2013?

We will be paying both the Employer and Employee portions of FICA. Do we have to amend employees tax returns?

Are there any other penalties/interest, etc. that we should be aware of?

Recordkeeper sent out a 1099-R for a 2015 loan default. It turns out the sponsor made a mistake on loan payments and now we are doing an EPCRS filing to correct.

What are the participants options with respect to his 2015 tax return?

Can he file it now?

Should he include an explanation that an IRS application is pending?

I assume the IRS will respond that income from a 1099 is missing, at which point we would resend the same explanation?

I assume this would delay any refund for the participant?

Is it permissible for a safe harbor 401(k) plan (basic match) to cap the amount of safe harbor match received by an HCE?

I know that the plan can provide that HCEs are excluded from receiving the safe harbor match, or that there can be allocation restrictions for HCEs, but is it permissible to put a dollar limit on the safe harbor match to HCEs?

Thanks.

What if owner sells his stock to an ESOP on January 1 and plan is calendar year. Considered an owner on 1/1 or not for ADP test purposes?

Does anybody have a good excel worksheet to calculate SE net income ? or can you point me to a site that has something to build upon?.

I have a partnership (2 ptrs), and neither made way over 265000, so I need to calculate their income - taking into account their share of employee profit sharing contributions.

Thanks!

Company A has a 401(k) plan, with participating employers Company B and Company C. They are a controlled group. Employee X owns 30% of Company B, but has no ownership in companies A or C. Is he still considered a 5% owner for determination of HCE and key?

I have a client who terminated their 401k plan and merged its assets with an MEP plan. Now it wants to leave the MEP plan and start another 401k plan. Plan id will be 002. Is there anything I should be aware of when setting up this new plan?

Thank you.

I found this thread from 2002 and thought it might be time for a new discussion:

http://benefitslink.com/boards/index.php/topic/15137-nipa-vs-aspa/

What are your feelings on:

1) The organizations as a whole? Is one geared toward a specific field (RK vs. TPA) or Employer size?

2) What about the credentials they offer? Is one more known and/or respected - either in the industry or to clients/financial advisors?

3) Education (including webcasts)?

4) Conferences? Both seem to have comparable "annual" conferences and now both have business owner ones too.

5) Networking opportunities?

As a small-business owner, NIPA has a business owner membership which allows my employees to all have (non-credentialed) memberships under me. Their annual conference is a bit more affordable too. But, to me, ASPPA and it's credentials just has a more recognized name in the industry.

I am anxious to hear your thoughts. Thank you.

Participant requested a hardship earlier this month. Today he contacted out distribution administrator to tell her that the sale might not go through as the current owner found out the property had a lien on it (from a prior owner I guess) and current owner doesn't want to pay/might not show up to the closing today.

Do, if participant doesn't close on this house, what should he do with his h/s distribution? Taxes have been paid on the disbursement and MassMutual sent the money to his bank account. If the closing doesn't go through today, the participant will continue to look to purchase another primary residence.

Thoughts?

A top hat plan credits participants with deferred comp each year until age 60. At age 60, participants vest, but further credits stop. Payout is on separation from service at any time after attaining age 60. Questions:

Does the ADEA apply to top hat plans?

If so, does this plan violate the ADEA?

If so, does that have any consequence under 409A (e.g., does an ADEA violation cause a violation of 409A, if the plan otherwise complies with 409A)?

Thanks for any help.

Hello,

Plan in question is a start-up - both plan and plan sponsor.

Plan sponsor established 5/1/15 & Plan effective 8/15. So first plan year is 8/1/15 - 12/31/15.

Eligibility is 18/no service for deferrals and 18/1 YOS for SHNE...monthly entry for all sources.

Anyone employed as of 7/31/15 is eligible for all contributions in the plan as of plan's effective date.

Out of 29 EEs, 25 were employed as of 7/31/15 and therefore are eligible for all contributions. The four hired after 8/1/15 are all eligible for deferrals, but not SHNE (duh).

I understand that when there is a dual eligibility situation, there is the potential for needing to segregate certain employees and test them if there is an HCE in that group. Most of what I find regarding this situation alludes to using permissive disaggregation of statutory EEs (to make up the safe harbor "plan") from those who are not 21 and haven't completed a YOS (tested "plan"). BUT - in this case, wouldn't that mean everyone in the plan falls into this category, and so I would need to test the entire plan for ADP? This makes for a return of $3150.00 and probably an angry plan sponsor and flabbergasted relationship manager.

To put it another way, when there is a situation in which some EEs are eligible for SH contributions, and others are not, is the OEE rule the only rule applied to testing, or is the option there to only test those who have not met the PLAN'S eligibility for SH contributions? If I were able to do that, I would have four people in my test - 1 HCE and 3 NHCEs. Under this scenario, I would have a return of about $20 bucks, and (hopefully) an understanding plan sponsor and (but probably still confused) relationship manager.

***Just for fun, the plan is also Top-Heavy for the first year (and probably forever - there are 13 keys), so those three NHCEs would also be getting a THM (HCE is also a Key, which is probably obvious to all of you ERISA experts!)

(And no, I had no input on plan design...)

Thanks to anyone who read this and offers advice!

Slappy

I'm having a "chemo brain" moment.

Plan is SHNE and top heavy. Eligibility for deferrals is immediate. Eligibility for SHNE is 3 months. Is it only the people not yet eligible for SHNE who must get a top heavy minimum, or everyone?

I was watching a webinar yesterday about a demand deposit alternative offered to qualified plans. The speaker was asked whether this account, which is FDIC-insured, was available to all defined contribution plans, including 403(b) plans. The speaker answered in the affirmative.

I am under the impression a 403(b) cannot have this type of FDIC-Insured Demand Deposit Account as it is not an annuity or mutual fund.

Was the speaker incorrect?

This is relevant as our bank is introducing a FDIC-Insured Investment Account as a money market alternative for qualified plans. It is available for advisors, providers. TPAs, and sponsors of qualified plans, but we were under the assumption it was not available to 403(b)s.

Thank you.