Help! an employee became a partner mid way through the plan year. For 2015 he has 415 comp and self employment earnings. To keep it simple he has 85,000 in 415 wages and 85,000 in self employment earnings. Contribution formula is 7.5% of comp plus 5.7% of comp in excess of 118,500. Since he only became a partner mid way through the year, he is not taking a deduction for the employees' contributions only his own for the self employment earnings. The other partners are taking the deduction for his contribution on the 415 earnings.

How would I calculate his contribution and divide it between the 415 comp and the self employment earnings? He also has deferrals for the year.

thank you

I have a plan where the following groupings are used in a "everyone in their group" plan:

Department Heads (probably ok!).

People w/ More than 5 Years of Service

People who terminated AFTER the end of the plan year

People who work less than 30 hours per week.

For those of you who read this and say "hey, is this the same plan he was posting about a couple of weeks ago?" the answer is yes, but my specific question here is, can I use the Average Benefits test.

I should point out that I have it from a very very trusted ERISA expert that allocating a zero % contribution to people with less than 5 years of service does NOT violate 410(a) as long as the plan otherwise satisfies coverage and nondiscrimination.

So, can I use the average benefits test with these groupings dictating whether or not people actually get contributions. It seems to me that a reasonable business classification can either be interpreted very broadly (hey, of course it's business!) or very narrowly (e.g., business lines, geographic locations, position)...

Does anyone have any great suggestions for code books? I'm not looking for the ERISA outline book, the Grey books or anything else, but rather books of the actual internal revenue code, including ERISA, and the treas. regs.

In this digital age, I know everything is available online, but I like have a printed book to highlight, mark-up , flag etc.

For quite awhile I've used "Selected Sections Pension and Employee Benefit Statutes and Regulations" by Bruce A. Wolk

http://www.gettextbooks.com/isbn/9781599415154/

The last version I have is from 2009, so other than for the basic 401(k) rules that I know i haven't changed, these days I usually use it just to figure out what code sections or regs might be relevant and then look up updates or the most recent versions online.

But it doesn't have things like §4971 excise tax section, §412, etc. And the treasury reg portion of the book is a bit small for my liking.

Does anyone have a great print version of the retirement plan code / Treas. regs that they would recommend?

​happy special pi day rounded to 4 decimals 3 14 16

Scholars argue about whether last year or this year is the pi day of the century, but clearly today, rounded pi day, is the people's choice for pi day of the century, since it's far more common to find round pi than square pi.

http://abcnews.go.com/Technology/pi-day-2016-extra-special/story?id=37630134

I have a copy of the K-1 with a number - say 200,000 in line 14A

Line 20 has an amount that is medical insurance payments - say 5,000

Then the client gave me the 1/2 self employment tax from the 1040.

They are also said the line 14A includes LTD and LTC Premiums. and gave me a reduced number that didn't include that.

Not sure what to use for compensation, as I have never been given a reduced number in the past.

Any ideas?

Pat

This has to be the oddest question I have ever asked. The law allowing banks to put into mortgages a "due on sale" clause, has an exception for trusts. This exception voids this clause when being transferred to a trust.

Is a 401(k) Plan a trust for this purpose?

Can anyone direct me to where i could find if corrective refunds for ADP are performed on a FIFO or LIFO basis?

I searched the forum and found a thread on the subject, but it referred to Treasury Regulation 1.401(k)-(1)(f)(4)(ii), but that seems to be regarding special rules for direct rollovers of Roth contributions.

I've been looking in chapter 11 of the EOB, but i can't find anything.

Thanks in advance!

For the party in interest rules of ERISA 3(14)(G), is an LLC treated as a partnership? Can't seem to find any express authority out there... Thanks.

When a benefit statement is requested and not otherwise required by law, can the plan charge the participant and, if so, is it limited to the reasonable charges of other requests of .25/page?

We have a 401(k) plan that uses a bundled insurance product that each participant has control over for their investment choices. During the 2015 plan year, the plan trustee/15% owner of the company named his brother as the investment broker for the plan. He is only receiving commission from the insurance company. Is this allowed or is he a disqualified person and we have a prohibited transaction? The definition of family member is spouse, ancestor, lineal descendant and any spouse of a lineal descendant. The commissions he is being paid appear to be reasonable. I just want to make sure I let them know that it's okay to retain him as I initially told them that I didn't think they could. Egg on my face, of course

Our client is engaging in a transaction wherein it will be acquiring a company and giving a chunk of money to the company's ESOP and the ESOP will distribute the money. I'm a bit concerned there is a prohibited transaction here. If it turns out there is, I've often heard the DOL say they will unwind the transaction.

How would that work here? The ESOP wouldn't have the money to be able to pay our client back. It seems unfair that our client would have to give the company back, but not get its' money back.

Can a doctor who sold his practice to a hospital set up a Defined Benefit plan based on additional income he now gets. Specifically:

1) MD and his two employees are now on the hospital payroll and he does surgery for hospital patients

2) Excluded from his contract with the hospital are other medical procedures (elective surgieries, routine consultations) for which MD gets fees paid to his corporation which he still maintains.

Any issues with :

(a) setting up a plan using that non-hospital income, or

(2) those other two employees not being covered under the MD's own plan?

Is it legal to own precious metals in a solo -k?

How about an IRA?

If not, can anyone give me an idea where to find the regulation or law?

401(k) participant directed plan allows participants to have a Self Directed Brokerage Account with the custodian.

Question;

Does the Trust file the 990 T for any Unrealed business taxable income (UBTI) resulting from all self directed brokerage accounts. For example ther are 75 SDBA, and 5 have UBTI, are the accounts aggregated and one 990T is filed? If the taxation is in excess of $1,000 who pays tax? the Plan or the participants whose accounts were reported?

Never worked with UBTI before, and the particiapnts/administrator are getting letters from the platform about these investments and potential taxation.

thanks

An employer has a 401(a) plan with a pick-up of 4% of compensation and also has a 457(b) plan. An employee makes $50,000, so $2,000 will be picked up and contributed to the 401(a) plan. The employee is deferring 10% of compensation. Do you take 10% of $50,000 or $48,000? Is this dependent on the 457(b) plan's definition of compensation? I think no matter what the plan's definition of contribution compensation is it would be $48,000 because pick-up contributions are considered employer contributions.

Can you please confirm this. Thank you.

When we got our 2015 census data for Client M, they mentioned that they have leased employees that started with them in late 2014 and are still employed. It seems that they meet the requirements of 414(n) at this point so they are considered "leased employees".

The plan has a six-month eligibility for 401(k). If we're supposed to count service back to the original date of hire, do we have a missed deferral opportunity? It seems like we shouldn't, since they weren't eligible as of that date. My thought is that we count them as eligible as soon as they meet the criteria to be counted as a leased employee.

Thoughts? Thanks.

I have a QUADRO already filed with the courts some years ago and I am the

named alternate payee, and according to the QUADR0 have the same rights

to information as the participant, but the company will never give them to me,

nor will they answer any letters. I have sent them to the Plan Administrator.

I have also provided the Plan Administrator with a copy of the QUADRO.

This was a very large supermarket chain in the Northeast. Thank you for

your help.

Company with Volume Submitter document (adopted prior to 1/1/2016) amended the document after 1/1/2016 and, as a result of the amendment, it no longer has Volume Submitter status. It can no longer rely on its 3/31/2008 VS opinion letter and is therefore an individually designed plan.

Notice 2016-3 states that sponsors of individually designed plans now have until 4/30/2017 to adopt a pre-approved plan, but also states that employers who adopted pre-approved plans prior to 1/1/2016 continue to only have until 4/30/2016 to restate their plans.

If the company wishes to regain VS status for its plan document by restating the plan onto another VS document, what is the deadline by which the plan document must be restated? Is it 4/30/2016 (because it previously adopted a pre-approved plan prior to 1/1/2016)? Or 4/30/2017 (because its previously adopted pre-approved plan is now an individually designed plan)?

After sitting on the requested information for months, (in one case over a year) I now have 4 DOL investigators who are demanding information between March 11 and March 15. Has anyone heard if one of their new regulatory agenda items is killing TPAs?

Detail: New plan to us in 2015. Plan has been in existence for decades. Safe Harbor 3% with Cross tested design. The employer was "told" that the division he purchased in 2006 could be excluded and everything would be fine. The excluded division was discussed in some manner at the sales process. I was not there, I don't know all the details. I got the privilege to try to sort out mess. Employer would like to keep division excluded if possible. (It's not)

Well fast forward to 2016 and 2015 testing. I have all the census information and sure enough, it won't pass 410b coverage. The excluded division is killing the numbers.

Hide sight would have been to not bring the whole division, but to have them meet eligibility and treat like any other division; knowing that coverage was going to be an issue and several of the employees would never be eligible.

I need some direction.

Thanks!