This is a weird situation. Controlled Group with two employers. Employer X has a non-safe harbor plan. For 2015 (calendar), there was one eligible HCE and about 50 eligible NHCEs. Easily passes 410(b). Employer Y, which is Employer's X's parent holding company that is essentially winding down out of existence, has a safe harbor match plan. One eligible HCE, zero eligible NHCEs. It doesn't pass coverage under any of the available tests. As I understand it permissive aggregation is not allowed because one plan is safe harbor and one is not.

Here's the catch. The one eligible employee - who was an HCE - did not contribute anything or receive any employer contribution. So, technically it flunks coverage because he was eligible, but is any corrective action required to avoid disqualification? In looking at the -11(g) rules, we can amend to make enough employees of the other controlled group member, Employer X, retroactively eligible for Employer Y's plan to satisfy 410(b), and then make QNECs for them. However, the QNECs for them only have to be equal to the ADP and ACP of the otherwise eligible NHCEs, but THERE WEREN'T ANY OTHERWISE ELIGIBLE NHCES!

I know that -11(g) says that the amendment must have substance, but when you read -11(g)(5) it only describes certain instances where there is no substance, and this isn't one of them.

Any thoughts? Am I missing forest through the trees?

basic db/dc combo..er has used cushion to advance fund db..now

would like to get out of the arrangement sooner than later..two questions.

1.)currently only lump sum ae is 417(e)..if plan is amended to use greater of 417(e) and some other rate(e.g. 3.5%)..how does one test for nondiscrimination...seems difficult to me...

2.)if the excess funding is transferred to 401(k) replacement plan and allocated over 7 years can this excess be used for any type er money(qnec,matching,prshar etc.)?

any thoughts are appreciated...

HAs anyone ever heard of an outlook plug in that will scan emails and attachments and warn you if it finds SS#'s?

We have a DB plan that has a 9/1 - 8/31/ plan year. Therefore, its 5500 filing date is 3/31 and, each year, we have filed a 5558 extending the deadline to 6/15. The plan terminated 8/31/2015 and, In late December 2015, the last participant was paid. Therefore, the final 5500 is for the short plan year 9/1/2015 - 12/31/2015. When I try to prepare a Form 5558 using our government forms software, I get an error stating that I can't extend the deadline to 6/15/2016, as this doesn't sync with a plan year end of 12/31/2015. Should I just override the software, as it doesn't recognize that the 6/15/2016 really is valid?

Any responses would be appreciated!

Under the most recent EPCR rules to correct missed deferrals how is it determined if a QNEC needs to be made if the period missed overlaps a year end. EX. participant elected to defer effective 10/1/15 and was missed and deferrals implemented 3/1/16. Is a QNEC required for 10/1/15-12/31/15 period and because of the brief 3 month exclusion no QNEC required for 1/1/16-3/1/16 period?

What does the "rolling 3-month period mean". Under the above circumstances does this mean a QNEC would be required for the entire period 10/1/15-3/1/16?

I am familiar with governmental plans using a PSP for matching employer contributions based on deferrals to a 457(b), however, this is my first time seeing it done with a MPP.

The money purchase plan has a fixed employer contribution 10% of earnings (no mandatory participant contributions) for the City Manager and ALL OTHER employees receive a variable employer match up to 5% of earnings based on their contribution to a 457(b).

How is such a contribution formula fixed or definitely determinable?

My employer has been contributing to a personal SEP-IRA account for the past 5 (or more) years. After switching accountants they were informed that in order to contribute to a SEP-IRA you must contribute to all the employees that meet the required criteria. What rights do the employees have to go backwards and collect send SEP-IRA contributions?

Sponsoring employer is a partnership who reports their income tax returns on a fiscal year basis ending August 31.

The plan is a calendar year 401k with a safe harbor match. Does the partnership report calendar year income for determining wages for the 401k or does they use their fiscal year income for 401k purposes ie calculating the match?

We administer a 60 participant 401(k) plan where one of the owners of the plan sponsor never wants to see one dime of traditional money in his account.

I explained to him that the profit sharing contribution must be traditional, but once deposited he can convert to Roth.

In this case, the plan sponsor decides each year if they want to make a profit sharing contribution. If so, they contribute it March 15 for a December year end.

For example, for the 12/31/15 valuation, we showed the $35,000 profit sharing contribution as traditional receivable. Then when contributed on March 15, 2016, we gave him a Roth conversion form. He signed the form March 16, 2016. We will provide him a 1099-R in January 2017 showing the conversion taxable for 2016.

He now wants to get as close as possible to never having any traditional money in his account. He wants his 2017 profit sharing contribution funded to his directed account January 1, 2017 and convert it to Roth the first week of January. Meanwhile everyone else (referred to him as traditional losers), will need to wait for their allocation until March 15, 2018.

Other than potential discrimination in operation for the timing of deposits, does anyone see a problem funding before year end and immediately converting to Roth?

Thanks.

Haven't ever seen this one. Suppose a non-profit has a formula of 10% of pay. In a given year, they contribute 15%.

There's no penalty for a nondeductible contribution because there is no deduction anyway. The question is, can/must it be ALLOCATED even though it violates the formula?

My inclination is no - it is an operational violation of the plan, so it needs to be carried over to the next year, for which they can amend the plan to increase the contribution if so desired. Any other thoughts?

Does anyone know a good way to find out when a Roth began on Relius?

Spouse of owner participants in Defined Contribution Plan A. Spouse dies. The owner rolls the funds from his wife's account to his account in Plan A. Do these funds constitute a related rollover or not for owner?

An employer has an EIN ending in 6. Its ESOP has a determination letter dated April 2014. So far, no one offers a useful prototype or volume-submitter document to restate the plan on.

If concerning an individually-designed plan an Internal Revenue Code change makes a tax-qualification amendment necessary (and Congress's Act doesn't provide a special remedial-amendment period), when must the plan's sponsor complete the amendment?

According to the regulations' ordinary remedial-amendment period without an extension or other administrative grace?

Hi,

I have a client who is a sole proprietor who set up a 401k plan a few years ago. We took over the plan last year.

Apparently back in early 2015, her accountant told her that she could not participate in the 401k plan as a sole proprietor. Her financial adviser then set up a SEP for her only. Now her new accountant told her that this is wrong and she needs to put that contribution into the 401k plan and get rid of the SEP.

My question is that can we move her money from the SEP to the 401k and count the $18,000 contribution as if it was made to the 401k for 2015?

She wants to get the $18000 contribution that she made to the SEP into the 401k plan so she can get the SH match.

When a company changes its name, can it also change the name of its retirement Plan? I didn't realize that the answer is apparantly "no", but when filing a 5500 showing a new company name and plan name, it keeps getting kicked out of the EFAST system because of the plan name change. Is this correct, can't change a plan name?

Suppose you were approached by a prospective client shortly before the April 30th deadline to prepare a PPA restatement. Further suppose you discover that an EGTRRA restatement does not exist. Would you:

1) Quickly prepare the PPA document and have it signed timely. Then subsequently prepare the EGTRRA document and submit as a nonamender.

2) Not worry about the PPA deadline, prepare both documents and submit as a nonamender.

3) Have a different suggestion.

Your opinions are appreciated.

Can anyone point me to the IRS or DOL guidance on this subject? I saw something a few years ago, but can't remember where or even exactly when.

Small profit sharing plan is trustee directed, picks a high risk asset that over the course of several years tanks, and becomes worthless.

Trustee (is owner of plan sponsor) wants to make the plan whole for the losses.

I think in 2008 or 2009 a colleague showed me a bulletin or something that had the above facts as a similar example and gave restoration of the losses by the plan sponsor as a permissible correction. I don't know how old the guidance was, I think it was from way before 2008 or 2009, but I think that's when I remember seeing it.

Anyone know what I'm talking about?

Are there other threads on Benefits Link that have clues?

I have a question for top heavy determination. I have a plan in which an owner gave up ownership as of 12/31/14. So when using the 12/31/14 balances to determine the 2015 top heavy, he is still being included. Is this correct?

A DB plan is undergoing an IRS audit for which the sponsor has assigned her longtime CPA to be the POA. We administer the plan and are working closely with the POA and have provided all of the items initially requested by the auditor. The auditor has since requested additional copies of prior year paperwork and although there's still ample time to provide this additional info, a DOL rep has contacted the POA to inform her that they will be requesting in writing copies of various plan items. The DOL rep also said that they will be calling to interview the sponsor, the TPA, and anyone else involved with the plan, and said that a conference call will not be acceptable - every conversation has to be a 1 on 1. I suppose anyone who is contacted should ask that any info requests be made in writing rather than answering questions on the phone. Has anyone ever had this type of experience?

Since it's been quite a while since our last DOL audit, we're wondering whether this is how the DOL now conducts inquiries or whether they're overstepping their bounds. It's hard not to think this is overkill since the IRS hasn't yet finished its audit and the DOL is taking such a broad approach - is there anything that can be done to limit their scope, or at least establish a POA situation where they contact only one person? If the IRS has found a problem would they involve the DOL before sending out correspondence announcing their conclusion? All help is greatly appreciated.

Trying to find some concrete specifications on this - if a plan has three trustees and only one has signed the PPA document by April 30, 2016, is the plan considered executed? Or do all three have to sign before the document is considered compliant?