Plan has regular match forfeitures that occurred after the safe harbor match was implemented, due to non-vested terminated participants taking their distributions. Document allows us to pay expenses from forfeitures however the contract is written such that we don't bill the client directly. I'm left with a few grand in forfeitures to allocate to roughly 18 people. Plan is top heavy and the key defers. The only other option currently in the plan allows me to reallocate with employer contribution or on a salary ratio basis. Client wants to amend the plan at the end of the year, for future years, to use any new forfeiture to offset an additional employer match. (Plan document doesn't currently allow for match in addition to the safe harbor match). The client also wants to 100% vest this new match source. Can forfeitures be used in this manner? I thought I read that forfeitures that originated from non-vested accounts could not be allocated as a money type that would be 100% vested (the reason we can't use them to offset safe harbor match)? Or am I reading too much into that position? Thanks.

I've gotten different opinions/responses on this, so figured I'd see if anyone here knows for sure. Plan started January 1, 2014, do they need a restated document by April 30 or does their original document suffice?

Thanks in advance!

An employer maintains a retirement plan that allows non-highly-compensated employees to make elective contributions. These contributions are by affirmative election. The employer is unwilling to provide any automatic-contribution arrangement. The plan provides no nonelective or matching contribution.

Although the plan has no difficulty with any coverage or non-discrimination test, the employer’s human-resources people want to “do something” to urge more employees to choose retirement savings. But whatever is to be done must involve no work time of the HR people, and must not ask the employer to spend any money.

The plan’s trust has a plan-expenses reserve that resulted from mutual funds paying shareholder-servicing, 12b-1, and revenue-sharing fees in amounts greater than the recordkeeper’s fees.

The HR chief would like to use this trust subaccount to add a credit, perhaps $48, to the plan account of a participant who persuades his or her coworker to make elective contributions.

The plan and its trust each includes a provision, following Internal Revenue Code § 401(a)(2), that the plan’s assets must not be “used for, or diverted to, purposes other than for the exclusive benefit of [the employer’s] employees or their beneficiaries[.]”

What are the arguments for and against using the plan-expenses reserve to provide the proposed credit?

Is a publicly traded partnership considered Eligible Plan Assets for 5500 purposes?

If a plan provides for actuarial increases after 70.5 and also provides for continued accruals but does not provide a "better of" calculation, can PA make administrative decision to do "better of" calculation for benefits?

Does anyone do their general testing using the accrued-to-date method? We have a client whose prior TPA did their calculations that way and I can't make heads or tails of it.

I understand the general premise, but Relius cannot do the calculation so it would have to all be done by hand. (Or, rather, spreadsheet)

Questions: for average compensation: are you taking the average compensation over the measuring period? Last 3? High 3?

Does the measuring period have a minimum length? 2, 3 years maybe?

Is this a popular method to use? This is the first time I've come acrosst this since reading about it for an ASPPA test like 10 years ago.

must have been a lot of complaints from certain higher-ups.


https://www.irs.gov/pub/irs-drop/a-16-16.pdf

the announcement describes things this way:

Following publication of the Proposed Regulations, the Treasury Department and the IRS have given additional consideration to the potential effects of the provisions that would modify §§ 1.401(a)(4)-2© and 1.401(a)(4)-3© on the adoption and continued maintenance of qualified retirement plans with a variety of designs and have concluded that further consideration will be needed with respect to issues relating to those provisions. Accordingly, the Treasury Department and the IRS will withdraw the provisions of the Proposed Regulations that would modify §§ 1.401(a)(4)-2© and 1.401(a)(4)-3©.

......

so I guess something is coming eventually, but we don't know what.

Participant filed for bankruptcy in 2015. Now he wants to take a loan from the 401(k) Plan.

Any reason preventing him from taking the loan?

Since a loan is not a taxable event, am I correct in thinking the loan amount is not subject to creditors?

Does the fact he filed bankrupt impact his ability to take a loan???

An employee recently went under the Medex 3 plan and is no longer eligible for the company's HRA plan. She had 2 dependents when she was under the regular

Are those 2 dependents still eligible to be in the HRA and under the company's regular health plan?

Thank you.

Does anyone know how to comply with the Hacienda Act? None of the recordkeepers I work with will send withholding tax directly to Puerto Rico.

Can a current regular 401k plan " convert" mid year to a SH plan? If so, do they go back and match the deferrals prior to the date the SH provision is effective? If not, then would there be testing for part of the year? I have looked this up many ions ago and I think they can amend if there are at least 3 months left in the year, but the specifics elude me..... and it is tax season in my world right now..... c'mon April 19....

Participant repaid a loan for $3,000. The Plan allows for just one participant loan outstanding at a time and his intention was to take out a bigger loan after repayment. He subsequently found out that he could not take the bigger loan he wanted because the plan does not allow for loans from Roth (due to a recordkeeper limitation). Since his plans were foiled he demanded that his loan repayment be returned to him, and the recordkeeper complied because the transaction was based on bad information that they provided. The money was in his account for a week.

Now the client meanwhile thought the loan was repaid and so has not collected any loan repayments for almost a year and of course now the loan is in default. We were recently engaged to file a VCP application.

Question: Was the loan fully repaid with a subsequent impermissible distribution? Or would it be fairly easy to suggest that the loan was simply "reissued" after discovering a misunderstanding?

I have a plan sponsor asking what the deadline is for this year to process a 402(g) violation. I known that the deadline under 402(g)(2)(A)(ii) is 4/15. However, the tax filing deadline this year is 4/18. Is the deadline for the 402(g) corrective distributions 4/15 or is it extended to 4/18? Can you please provide support for your position?

In the past I have routinely provided a list of 3 - 4 advisors, ones that I work w/, and know to have their clients' best interests at heart, when asked for a referral. I always provide a list, because ultimately it is my client's decision (not mine) as to they work with. I don't receive any compensation for the referral, I do it simply to help out people who ask.

I am a CPA, that worked for a retirement consulting firm for many years, and I currently have my own practice which consists of small tax clients, and a block of small 401k retirement plans for which I provide traditional TPA consulting services. I do not sell or recommend any product, I am strictly fee based for consulting and tax preparation services.

Probably more info than what was needed - but here are my questions / comments. I've done quite a bit of reading on the new fiduciary rules, and my understanding is I do not become a fiduciary by pointing a plan to say, American Funds, or Voya, etc. Usually I'm referred by the advisor, but that is not always the case, and I do have investment companies I prefer administratively, and would recommend (not necessarily the ones mentioned here).

However it's unclear to me if I become a fiduciary by continuing to provide referral sources for advisors. I continue to read however, that if I recommend an advisor (or group of advisors) under these new rules, that will possibly make me a fiduciary, something I absolutely want to avoid.

Does anyone have any thoughts on this latter point? Appreciate any help.

We used the 436 IRS model amendment for a client. That client filed a determination letter upon terminating the plan. The IRS sent an inquiry asking for the amendment that was adopted to be amended to remove the incorporation by reference to the definitions in Sections 1.436-1(j)(1-9). I looked at that section and there is no explained definition. Where can I find that?

All I can find is that they should "meet on a regular basis, keep minutes and document the basis for all decisions.

What constitutes a "regular basis"? Any sites?

Thanks!

Was it pushed back to 4/18/2016 like the 1040's?

Plan is not Top Heavy and probably never will be.

401(k) w/ Safe Harbor Match - immediate eligibility

Cross Tested Profit Sharing - 1 YOS, 1,000 hours, Last Day rule, everyone in their own group. Business owners use the Profit Sharing to maximize their benefit at the end of the year. Employer wants to keep Profit Sharing contributions to an absolute minimum, excluding as many employees as possible.

Prevailing Wage - may be used to offset any required SH Match, if applicable.

Who gets the Gateway?

Employee 1: Made no 401(k) deferrals. Got no Prevailing Wage. Met 1 YOS requirement in a prior year. Worked 1,000 hours and was employed on the last day of current year.

Employee 2: Deferred 5%. Got a Prevailing Wage contribution that represented 4% of compensation.

Employee 3: Made no 401(k) deferrals. Got a Prevailing Wage contribution that represented 1% of compensation.

Employee 4: Terminated prior to the end of the year. Didn't defer. Got a Prevailing Wage contribution representing 4% of compensation.

Where the Gateway is concerned, do I only care about employees who received the Prevailing Wage contribution, or does an employee qualify for the Gateway simply by virtue of having provided one year of service and being employed on the last day?

Thanks!

Are federal tax withholding amounts reported separately from distributions on Form 5500 Schedule H?

Large insurance company pays compensation to both the agent directly and to an S-Corp. owned by the agent.

Agent partiicpates in the insurance companies plan based on the wages paid direclty to him by the insurance company

Agent wants the S-Corp. to adopt a SEP and receive a SEP contribution based on his W-2 wages that he pays himself from the SEP.

Any reason he can't do that? I don't see an issue right off, but that pay scenario confuses me.

Thanks in advance for any guidance