When a participant is receiving a rollover distribution of both Roth and Non-Roth monies (match and profit sharing) are there two 1099R's required? (one for Roth rollover and one for non-roth)...Thanks!

The final 415 regs go on ad nauseum about how post severance comp cannot be included for 415 comp definition. I'm looking for the connection that it can't be used for benefit accruals, such as 401k deductions?

I know that it cannot, but where does it say there is a connection between the two?

So what is to stop me from making post-severance comp eligible for allocations, and then using a 415/414s compliant definition for nondiscrimination testing? I know there is something, but again, what is that something?

Company X is publicly traded and maintains Plan A, a 401(k) plan. Company Y is not public traded and maintains Plan B, a 401(k) plan. Company Y is merged into Company X in January, 2015. Assume that both plans have calendar plan years and that Plan B is merged into Plan A effective December 1, 2015. Plan B uses the look-back rule for purposes of the ADP test and applies the top-paid group election in determining HCEs. For testing Plan B for ADP compliance purposes, would the employees of Company X be taken into account in applying the top-paid group rule since Company Y was merged into Company X effective in January 2015? Could Company X apply the transition rule in delaying the application of Plan B's top-paid group rule in determining highly compensated employees? I would be most interested in your observations on these questions.

401(k) plan has terminated participant, age 28 with two years of participation, who elected a lump sum distribution. Monies are Roth, safe harbor match and discretionary profit sharing.

Will two 1099-R forms be needed to report her distribution because of the distribution codes?

First 1099-R for the Roth portion of the distribution:

• Gross Distribution = Roth deferrals plus earnings
• Taxable Distribution = Earnings only
• Federal Income Tax = 20% on Earnings (Taxable Distribution)
• Box 5 = Roth deferrals only
• Distribution code = 1B
• Box 11 = first yr of Roth deferrals

Second 1099-R for Employer monies (SH Match and Disc PS)

• Gross Distribution = SH Match plus Disc PS plus earnings on both
• Taxable Distribution = Gross Distribution
• Federal Income Tax = 20% of Taxable Distribution
• Distribution code = 1

Or should the reporting of this distribution be handled on one 1099-R?

I appreciate any comments.

Employer filed a Form 5310 to terminate its 401(k) plan effective September 2014. Form 5310 was filed April 2015.

During the review process, IRS agent analyzed the data in question 16 (6 year turnover rate / non vested participants). Agent now takes the position that there was a partial plan termination in 2009 and 2010 and is requesting that all partially vested, terminated participants in those years be retroactively fully vested.

Assuming agent is correct that there was a partial plan termination in 2009 and 2010, would asserting a statute of limitations defense be viable? The 2009 and 2010 Form 5500s were both filed more than 3 years before the Form 5310 application. There is no question on the Form 5500-SFs that were filed asking about partial plan termination (i.e., the returns are accurate as filed).

One of our clients made a mistake with an elective deferral for one of their participants. This participant wanted to put in a rather large (a few thousand dollar) contribution at the end of the year, but somehow the request was not processed due to payroll company error. It's now past the end of the year and the participant missed out on maxing out their elective deferrals for 2015. They also did not receive the match that was attributable to that contribution. What should be the correct correction method?

I realize that there was recently a revenue procedure from the IRS stating that if the error is corrected within the first 3 months, the QNEC is not required to replace the missed deferrals. However, the match that would have been attributable to the deferrals is still required, correct?

Thank you.

A DC plan has a dual vesting schedule (result of a merger). Would this trigger availability testing? Thanks.

It is my understanding that if a participant goes from FT to PT and works more than 500 hours and is employed on the last day of the year, that individual must receive a contribution.

What is the cite for this??

We're telling our health insurance carrier we want a copy of all the 1095-Bs that they're sending to our 2015 covered employees.

We're identified as the "employer" on the forms and the forms are going to our employees due to their relationship with us.

Plus the employees will be calling us (and not the carrier's 800 number listed on the form) when they have questions.

So far the carrier is refusing our request (citing privacy issues) and I'm wondering what others are experiencing with their carriers.

Thanks

A company has a board resolution saying a plan will be merged as of April 1st, with contributions into the plan ceasing before that, at the prior year end.

If administratively the actual conversion of assets cannot happen until April 30th, is that an issue? Does a new resolution need to be enacted?

Have a plan that has eligibility measured from anniversary and then switches to plan year. It's the basic document language that I'm sure most doc modules read but I attached it.

So here is a scenario and I'm not sure the answer. Eligibility is 1 year of service with 1000 hours and age 21. Entry is monthly, calendar year plan.

Scenario - Hire date May 2, 2014 so anniversary date is May 2, 2015 but they didn't work 1000 hours in that first period for whatever reason. In my client case they employee a lot of interns that then turn full time. So based on my scenario, we switch to the plan year because they didn't meet the 1000 hours in the anniversary period. Plan year is January 1, 2015 to December 31, 2015. Well the client is arguing they should come in June 1, 2015 because between January 1 and May 2 2015 they became full time and worked 1000 hours so why do they have to wait for another full year. My thought is no we measure January 1 to December 1 and yes they worked 1000 hours and they come in January 1, 2016. It does seem to be a gray area in my mind. Thoughts and help please?

I'm submitting a determination letter application to the IRS and there are a lot of documents. If I submit the relevant plan documents in a (printed) double-sided format to save paper, will that be acceptable? Or is it going to be kicked back for not being single-sided?

Can non-profit board members be covered by benefits that are offered to employees? Being paid, are they considered employees?

Have a plan sponsored by one employer with a September year end with a participating employer with a December year end. They are related employers. Plan assets are pooled.

We have suggested they spin off and create two separate plans. They mentioned that it will be a disadvantage from a plan investment standpoint to do this.

We are thinking they could have two plans and a combined trust. The document is silent on the subject. We have certainly seen combined trusts before but all had the same plan year. Does anyone see problems with having two plans sharing a combined trust with different year ends?

Thanks.

So I am working on my first 5500-SF for 2015 - just adore those changes

Part IX - Compliance Questions - some of these are a bear; especially asking about last amendment/restatement dates and codes. But looking at the instructions, I see that entire section is Optional.

Does anyone have a sense of what might happen if we simply don't complete it? Is anyone completing it?

Questions regarding a proposed S-ESOP structure. Individual X owns 100% of Corporation Y and 5% of Corporation Z, each an S corporation. ESOP, which forms a portion of Corporation Y's 401(k) plan (the KSOP), owns the other 95% of Corporation Z. Corporation Z will have two officers but no other employees, although some of the services provided by Corporation Y employees benefit Corporation Z. Plan participants will receive a non-discriminatory discretionary employer contribution and will be given a one-time election to invest the contribution in Corporation Z stock. Afterward, participants may not enter or exit the stock fund except upon a distribution event or to satisfy ESOP diversification requirements. No participant will own 5% or more of Corporation Z through the KSOP.

1. Does the KSOP meet the requirements of an exempt employees' trust under section 1.1563-2(b)(4) and section 1.414©-3©(2), which would mean that the ESOP stock in Corporation Z is excluded and would make Corporations Y and Z members of a controlled group? Might Corporations Y and Z be treated as a single employer for this purpose?

2. If future contributions are not made to the ESOP portion of the plan for several years after the initial contribution, but substantial and recurring contributions continue to the 401(k) portion of the plan, has the permanence requirement of 401(a) been satisfied?

We have a small 401(k) with only 3 participants. The owner is the only one who deferred in 2015 - $3,800. She is over 50, so since all her deferrals exceed the maximum allowed under ADP testing, it seems that technically all her $3,800 deferrals may be re-characterized as catch-up.

So - owner has $3,800 catch-up, 2 HCEs have no deferrals and receive no ER contribution of any sort. Does anyone see any problems with this???

Calendar Year 401(k) Plan - deferrals are contributed throughout the Plan Year. After December 31st, it is determined that the Plan failed the ADP Test and corrective distributions were made.

For the same Plan Year, the Employer has decided to make a Profit Sharing contributions (decided after above corrections).

A colleague states that the Employer may contribute Profit Sharing over the 415 Limit to make up for the corrective distribution of deferrals that were made.

Is this possible? It seems unreasonable.

Hi-

I have an employee who elected the Roth within our plan and had one deduction. She is stating she didn't mean to sign up for it and changed back to all pre-tax. She is reqeusting a refund for the one pay period where the Roth was withheld. Since she made a Roth election which was correctly withheld in PR are we allowed to refund her? I have always gone with we need to withhold based on the elections made. Are we able to refund the deduction based on her reqeust? I can't find any wording to back up either way.

Thanks!

Is it possible for a deferred comp plan to change from a lump-sum payment following termination to 5 annual installments?

The current document indicates that participants are paid 100% of their balance 90 days following termination of employment. There are payment elections permitted of any kind.

We want the executives to be paid in 5 annual installments to help ensure that they will be in a lower tax bracket when they receive the payments, as the participants are generally expected to remain until retirement anyway.

It seems as though to allow this we are required to defer the first annual installment until 5 years AFTER their termination date. Is that accurate?