I have a SH nonelectve 401k plan that is considering allowing the participants to
sell part of their accrued vacation time to help pay for their medical insurance. Part of their medical insurance will also be deducted from their pay in 2016.

What options do I have for compensation definitions?

Thanks

Pat

1 plan, 2 related companies.

all employees eligible.

owner takes 150,000 at company 1 and 120,000 at company 2.

cross tested plan, owner is in own group.

is he allowed to take 52,000 from company 1 and therefore at 415 limit so nothing from company 2. (or split the 52,000 between the companies in any way shape form he wants?)

One of my client's changed the name of their business. We advised them to change the business name in the Plan document and they refused. Does it matter?

A plan allows lump sums. Early retirement is defined as 55&10 and provides subsidized early retirement factors. A participant who is 40 but has 10 years of service wants to retire and take a lump sum, so we are calculating the annuity available at BCD.

Do you have to provide the early retirement reduction factors and then actuarial equivalence reduction thereafter? In practice, we do that for plan terminations but this is not a plan termination and the plan document doesn't state to do this.

Thanks!

I have a plan with a missing participant and need to get the funds out of the plan. (Acct balance between !000-5000). I'm having trouble finding a custodian or financial platform that will accept a force out without the participant's signature. We have followed the IRS guidelines in the field book for locating lost participants. The platform that currently holds the plan does not accept them. Does anyone know of one that will accept this forced transfer?

I have a two part question and need advise. I and another highly compensated partner started an s-corp. We have NO employees other than ourselves. We both own 50% of the company so we report the majority of our income on W-2's and the rest of the income is divided equally and reported as profit sharing on K-1's. In addition, the s-corp is a partner in a general partnership. There are 9 partners in the general partnership some are incorporated and some not. The general partnership has NO employees.

My partner and I in the s-corp each opened a solo 401k and have been contributing to both. The s-corp as the employer and the two of us as the employees.

My first question is, my partner and I, are we allowed to contribute to solo 401ks? Are owners of s-corps who are highly compensated with no employees other than themselves allowed to have this type of retirement plan?

My second question is, our corporation allowed to start a retirement plan without including the other partners in the general partnership, I have not asked but the other partners in the general partnership probably have their own retirement plans.

I would like to thank you for any time spent on this post.

Sincerely,

Tomf

In a new comp 401(k), is it acceptable for each partner to decide their employer contribution? The plan is set up for individual groups.

Partner A - makes the maximum. Partner B - does a flat $5,000 and Partner C - wants to contribute zero.

Is there a reg. that we can refer to?

Thanks

I had an earlier thread discussing a plan sponsor who borrowed money from the plan, not realizing it was prohibited transaction. As of yesterday, all money borrowed plus lost earnings has been repaid to the plan - the plan is now whole.

I am preparing 5500 (PYE 06/30/15) and 5330 and need some feedback from anyone who has ever dealt with such a situation. Instructions for Form 5500-SF, Line 10b include the tip shown below. Can anyone shed some light on what would allow us to NOT report the transaction and file the 5330 (thereby saving sponsor the excise tax).

From 5500-SF instructions, line 10b:

TIP: Applicants that satisfy the VFCP requirements and the conditions of PTE 2002-51 (see the instructions for line 10a) are eligible for immediate relief from payment of certain prohibited transaction excise taxes for certain corrected transactions and the requirement to file the Form 5330 with the IRS. For more information, see 71 Fed. Reg. 20261 (Apr. 19, 2006) and 71 Fed. Reg. 20135 (Apr. 19, 2006). When the conditions of PTE 2002-51 have been satisfied, the corrected transactions should be treated as exempt under Code section 4975© for the purposes of answering line 10b.

I have a basic profit sharing plan for a group of 10 ees;2 are hces and 8 are nhces.

usual cross testing technique doesn't work that well do to demographics.I would like to do the following and hope that it is valid.

two component plans with 1 hce and 4 nhces in each. each plan would pass the ratio% test. for 401(a)(4) I want to cross test one component plan A. the only rate group will have one hce and 3 nhces which is >70%(3/8/(1/2))(I am counting those in the other component plan(B) as 0s for this purpose). for the other component plan B I want to allocate as if it were a 401(l) integrated plan using 4.3% and a $41k integration level. the ratio% for B is>70 also. The whole plan satisfies the ratio% test but not the average benefits test. Anything seem off here??

I have a client that believes she should limit the Per Payroll Deferral Calculations to the Annual Compensation Limit divided by the number of Payrolls in the year for employees that have a base salary that is greater than the Annual Compensation Limit.

The Plan allows employees to continue to defer on money after they've reached the Annual Comp Limit.

I'm looking specifically for documentation to prove that she's incorrect in her interpretation of how the Annual Comp Limit works but I'm having difficulty finding anything and she's refusing to budge.

Example:

Employee Earns $360,000 Annually and has elected 5% Pre-Tax. EE is paid $13,846.15 on a Bi-Weekly basis. Payroll calculates a Pre-Tax Deferral of $692.31. Plan Sponsor says this is incorrect. States that since the EE earns > than $265,000 the Bi-Weekly Pre-Tax Deferral should be $509.62 = ($265,000 / 26) * .05.

Thank you,

Does everyone agree that Prime + 1 for participant loans is officially 4.5% (3.5 + 1)?

I'm just surprised I haven't seen articles or email blasts on this topic yet.

Does anyone have a recent list of which states do & do not tax monthly pension annuities?

we are a quasi state governmental entity

thanks

Alexa

An employee (not a 5% owners) participates in a 401k plan sponsored by his employer. The plan allows IRA accounts to be transferred into the plan. The plan does not require employed participants to begin taking distributions at 70 1/2. RMDs can be postponed until actual termination of employment.

If the employee is post 70 1/2 and has taken his RMD from his IRA for the calendar year, can he rollover the balance into his employer's plan to defer taking RMDs from the IRA monies?

I have a client who is being told they have to execute the PPA restatement of their safe harbor 401(k) amendment by the end of this calendar year with a 1/1/2015 effective date because the original effective date of the plan was 1/1/2009 and that plans must be restated every six years.

I am telling the client that the IRS is none too keen on retroactive safe harbor plan amendments and their deadline to adopt the PPA restatement is 4/30/2016, so they should just make their amendment effective 1/1/2016. [We are actually recommending they make some changes to the plan's design anyway, so 1/1/2016 makes sense.] I am trying to convince them that the six year clock is only in reference to the restatement deadlines and not the date of your last restatement (or in this case, the original adoption of the plan.]

The provider is insistent that they have to adopt BOTH the 1/1/2015 plan and then they will do the 1/1/2016 amendment.

The safe harbor notice timing issues aside ... has anyone heard a stance like this on the "six year clock"???

Does anyone know where I can get the permitted disparity factors for a DB Plan? I'm looking for the grid that adjusts the factors based on the juncture of NRA and SSRA. So 65/65 = .75 and then everything else is adjusted upwards and downwards.

If everyone is in their own group, you fail the reasonable classification test. So does that mean I must pass rate group testing with 70%?

Do I also lose the ABT for coverage?

I forget how that affects things. Seems like everyone is just loving the own group thing, but I know it has drawbacks.

Situation: A owns 100 shares of C Corp. C Corp sets up plan. A rolls money into the plan from prior employer's plan. Then C Corp sells 900 new shares to plan.

A owns LLC that in turn owns a building. LLC leases the building to C Corp.

Is that an indirect leasing of property between A, a disqualified person, and the plan?

Or since the plan assets, stock of C Corp, is not involved in the lease transaction, it is not a prohibited transaction?

If overpayments in pension benefits are mistakenly made to participants/beneficiaries, and the full amount cannot be recouped from the participant (for example, if there are no future payments to be made from the plan and the participant cannot repay the full amount), is the balance of the amount required to be paid back by the "plan sponsor?" I can understand this approach in a single employer plan where the company is the plan sponsor, but how does this work in the multiemployer world where a Board of Trustees is the plan sponsor? Should they file a fiduciary liability claim with the insurance company to recoup the overpayment? Any thoughts?

The assets held in a nonqualified plan are subject to the claims of creditors in the event of a liquidation/bankruptcy. Do you know if there is a particular kind of insurance a company can acquire to protect the participants against the risk of default?

In this particular case, the participant has several hundred thousand dollars.

Note that we have a rabbi trust but of course that does not help alleviate the risk presented by the insolvency/bankruptcy of the plan sponsor.

With Roth 401(k), I assume Box 1 of W-2 includes Roth contribution, unlike traditional 401(k) which would be box 1 plus 401(k).

Therefore, does the 25% maximum contribution (assuming a one-participant plan)

include Roth contributions or are they in addition to the employer 25% contribution?

As well, the maximum $53,000 (plus catch-up) includes both Roth as well as traditional 401(k).

Cites?