Hello,

I'm working with some US Citizens who are resident in Japan. They are business owners there that own a Japanese company. They typically do have income in excess of the FEIE level.

I was wondering if they would be eligible to open a plan in the US based on their Japanese company..from researching this it seemed like a Solo (k) might have worked if they weren't a partnership, but I can't find anything solid.

If anyone is aware of a plan that they could adopt, I would be glad to hear from you about it.

Thanks!

I ran across an interesting thread on a financial advice website. The OP is terminating employment on 6/22/2016. However, the administrator will not allow him to take a distribution after this date because he was still receiving severance payments, and therefore is technically active.

A couple of proclaimed administrators from "big banks" posted that this was accurate and was standard procedure.

If the plan document indicates the termination date is when you stop providing services, and it also provides for immediate distribution, I don't see how treating a participant "active" in this situation is correct. What further surprised me is multiple industry people confirmed it.

I am curious of the opinion of the people on this board, in case a similar situation comes up with a client.

I am new to the topic of qualified charitable distributions (QCDs) where the donor neither has taxable income by reason of the distribution nor is entitled to an income tax deduction.

My understanding is that such can be made from an IRA, but not an ongoing SEP or SIMPLE IRA.

If benefits are rolled from an ongoing SEP or SIMPLE IRA, or from a 401k plan, into an IRA, may the QCD then be made from the regular, 'rollover' IRA or is such subject to the step-transaction doctrine and treated as if the QCD was made directly out of the 401k plan, ongoing SEP or SIMPLE IRA?

Any citations to authority would be greatly appreciated as well.

A Cash Balance plan uses ET for benefit accrual....so a participant joins plan 1/1/2015....terminates 12/28/2015....looks to me like she gets no benefit accrual [Pay credit] for year.

Any thoughts -- I haven't seen an ET plan in about 15 years.

Sole prop 401(k) plan. Owner is sole participant. He makes $100,000. Defers $18,000. Deposits $30,000 in PS.

He's $5,000 over 404(a)3 deduction limit.

What is the remedy?

A participant was terminated (fired) on May 2. She is age 56. She has an account balance of $9000 approximately. The plan does not offer an early retirement provision.

Her broker's question is whether she meets an exception to the penalty. He is reading PUB 575 page 35. I was always under the impression that unless you were 59 1/2 - if you took a lump sum distribution upon termination - you paid the 10% penalty.

Would she qualify for the exception and not have to pay any premature penalty if she withdrew the $9000 in lump sum? It certainly looks that way upon first reading .

Am I missing something here?

p575.pdf

Do HIPPA regulations apply to self-insured health plans? At what address should children over the age of 18 receive their explanation of benefits/reimbursement checks/ notices etc? Their residence or the parent's residence?

I know, I know, 30 days after the end of the plan year-end. But isn't that just based on the DOL's plan asset rules? For deduction purposes, shouldn't they have until they file their 1040 or business tax return?

When opponents of the Labor department’s investment-advice fiduciary rule still were trying to delay the rulemaking, one of the arguments was that the Labor department shouldn’t set standards for “retirement” investment advice until the Securities and Exchange Commission had set standards generally for a broker-dealer’s investment advice, including for advice about accounts beyond those for which the Labor department’s interpretive powers has a legal effect. Once the Labor department’s rule takes effect (in about 3½ weeks), that point is over.

But the SEC still has on its agenda considering a rulemaking that could set some new standards for a broker-dealer’s advice to a retail customer.

How much is left for the SEC to do?

Perhaps it’s biased by who my friends and neighbors are, but I sense that while many people have investments under employment-based retirement plans, Individual Retirement Accounts, Archer Medical Savings Accounts, Health Savings Accounts, and Coverdell Education Savings Accounts – all of which the Labor department’s rule applies to, few have significant investments outside those forms.

Is my guess right? Is your experience different?

What’s your guess about the portion of the population with investments beyond the tax-favored accounts named above (and § 529 plans, which have some investment-advice regulation by other means)?

Is there survey evidence or an economist’s study on this?

Nonprofit has a 403(b) for deferrals and a SEP for Employer contributions..The need to update the document. Because they have the 403(b), they can't use form 5305. American Funds Doc says American funds is custodian. VanGard doc says Vangard will hold assets.

How does this paragraph play out in real life?

Accounting Question:

When a plan offers Roth Contributions, is there an order in which deductions are withheld from the paycheck.

Pre Tax Deferrals with held first

then Federal Income Tax and Social Security

The question is if the participant has several after tax deductions, is the Roth the first or is there a hierarchy as to which after tax gets withheld first?? Or does it matter???

Employer A is a very large 501©(3) and maintains a 403(b) plan for all of its affiliates. Affiliate P has participated in A's 403(b) for a number of years. Last fall, P's executive director complained about A's arrangement with provider M and wanted to have a 403(b) with Provider N instead, so it set up its own 403(b) with Provider N. Now, P wants to have amounts contributed on behalf of its employees while participating under A's 403(b) plan transferred in a plan to plan transfer to P's 403(b) plan with Provider N.

Are the plan-to-plan transfer provisions in the 403(b) regulations participant-initiated, employer-initiated or can they be either or both? It is not at all clear from the text of the regulations. I know that in the qualified plan context, the employer can arrange for a plan merger or spinoff without even informing the participants or seeking their consent. Is there an analogous concept in the world of 403(b) plans?

We were sent an order two years ago and determined it was qualified. However, before we could process it, we received word from the parties that they were not sure they wanted it processed as-is.

We tried many times to contact the parties, but we didn't get confirmation from them until recently that they want the order processed as-is.

So I have an order that's dated 2014 and is otherwise qualified, but can I process such an old order, or do I need to get them to get me a new one?

I have a plan who's 414(s) test is failing by 5.27% because the one and only HCE (the owner) has no bonus.

It's a 3% SH plan. Do I give everybody 3% of their full pay now?

I'm having a brain cramp - currently a straight PS only - no 401(k) feature. They want to add a 401k feature, with safe harbor nonelective as of, say, July 1. No problem with that. Question is this - the safe harbor feature isn't technically added until July 1. When calculating the 3% nonelective for 2016, they want to use full year compensation. Any problem with this?

The plan does not allow in-service withdrawals at any time. The plan does allow in-plan Roth rollovers. The plan also allows distribution from in-plan Roth rollover accounts at any time. The plan would like to change that so the in-service distribution options for the in-plan Roth rollover account are the same as the rest of the plan (withdrawals from rollover accounts are not permitted at any time).

Is the distribution from in-Plan Roth rollover accounts a protected benefit? Can it be completely eliminated so that the in-plan Roth distributions are the same as the in-service distributions?

A non-profit we work with has a 403(b) plan - all the participants have the individual accounts where the contracts are between them and the product directly. Now the plan sponsor wants to leave that product, but they can't unless each individual participant agrees to it - there are dozens, so I'm sure we won't get them all.

They suggested freezing Original Plan and starting a new 403(b) plan (where the employer controls the accounts, thankfully), and then the participants can transfer from Original Plan to New Plan at their leisure. But I don't think that works because the active participants have no distributable event from the Original Plan, so therefore there is no legal basis to move the money from Original Plan to New Plan. Am I making a mountain out of a molehill?

I thought we could have the plan sponsor terminate the Original Plan - that would give the participants a distributable event to move to New Plan. Twelve months later, there will still be some terminated participants who haven't moved... so the plan termination fails and Original Plan still has to continue to exist as an active plan. But the accounts that got rolled over to New Plan don't have to go back, so we basically just created a 12-month window to make these transfers. Is that OK?

Have a client who lost his job and rolled the balance within a 401(k) (with a Roth provision) into an Roth IRA.

He has since found employment and would like to roll the Roth IRA into his new company's 401(k) (that allows rollovers and has the Roth provision).

The service provider that is managing the Roth IRA won't allow it and just keeps saying, "it's not allowed because it's a Roth IRA going back to a 401(k)'??? can anyone help?

Thanks.

I'm going to research the boards on my own too, but as usual the person asking needs an answer in 20 minutes.

Person A owns 100% of Co. Y and 100% of Co. Z

Co Y has had a SIMPLE IRA for years

Co Z has had a 401(k) for years

That is a no-no.

We're trying to help him fix the SIMPLE IRA first. I know you can file through VCP, but I'm not sure of the end result.

The SIMPLE IRA excluded eligible employees and under VCP corrective contributions have to be made. Two questions:

1. Would the IRS consider the contributions made to the 401(k) on behalf of Co. Z employees as corrective contributions?

2. If Co. Z makes corrective contributions for the SIMPLE IRA failure, won't they be tainted since they sponsored a 401(k) in those years?

Thanks for any guidance

I have a Union Plan who has a low-level prescription benefit (after about $1,000 it becomes an 90% co-pay). Some participants who are over 65-years old are asking if they can also have MEdicare Part D as a "secondary" to their Rx coverage.

Does anyone know if that's possible? All I've seen is how Medicare Part B works as primary/secondary, but nothing about Part D.

Thanks in advance!