I know a QACA has to be in effect for a full 12 month plan year, but what about a EACA? Can it start mid-plan year?

I have so little information at this point that I'm not certain I'm even asking the right question. However, I'll give it a shot. Not our plan, and thankfully won't be.

A town sponsors a defined benefit plan. One participant is a union employee, and potentially the town wants to transfer him (and his assets) out of the plan so he can join some sort of state munipical employees plan. He'll still be working for the town, and has not reached Normal or Early retirement age.

Assuming the state plan allows such a thing, is he permitted to transfer his accrued benefit lump to the state plan to "buy" service credits, etc.? If the town plan does not provide for such a thing (if it is even permissible in the first place) I assume it could be amended.

Seems to me that it might be easier to just amend the town plan to exclude members of whatever union is involved, but I don't know about this whole purchase of service credits and transferring assets.

This out of my sphere of knowledge or experience.

Hi, I'm a single member LLC owner, which is taxed as an S-Corp, taking 70k W-2 and about 200k pass-through, although some years that pass-through can increase substantially. I have two employees - one is part time, 10 hours per week, the other is 25-30 hours per week. Employees are non-highly compensated. I don't believe the 10 hour per week employee would want to use any of their wages for a retirement plan. The 25 hour per week employee may be interested but I haven't discussed with them.

I want to maximize my tax deferred contributions; I am only 26 and my marginal tax rate is 42%.

I would love to find an option that allow employer match and/or profit sharing to maximize my contributions, however I do not want to substantially increase required compensation or contributions for the employees (Employee turnover is high, and it's an unskilled position mostly packing and filling orders and reading packing lists)

I also want a self directed plan that has minimal fees but I suppose that is more dependent on the provider I go with and not the type of plan.

During the current audit we discovered that a Trustee of the plan engaged in a prohibited transaction. On further review it was determined that this had also occurred in a prior year for which the form 5500 had already been filed. I believe that we should go back and amend the 5500 for the prior year to reflect that a prohibited transaction had occurred and also include the Schedule G for the prior years amended 5500.

Has anyone else have experience with a similar circumstance and how did they handle the prior year problem.

DB plan with a 70% AFTAP. Plan document allows lump sum payments to term vesteds, but now restricted to 50% of the otherwise payable LS.

The 436 amendment says that there is no new ASD when restrictions no longer apply.

Does that mean that you cannot allow someone to elect to receive the 50% LS now and delay receiving the rest of there benefit to a later date...because that would require a new election which would be a new ASD....or is the new election not a new ASD?

To All Pension Professionals and Actuaries,

A potential 71 years old self-employed client with current year income over 1 million and anticipated future years income under 200, 000.

1- RMD - Reg. 1.401(a)(9)-6 RMD for DB Plans and annuity contract Q-6, Q-5 & Q-1, is not very clear as it refers back

Is there any additional guidance how to deal with RMD for the un-vested portion of the account balance when it comes 100% vested in 3 years when the potential client turns age 74?

2- Max. Contribution

what does the initial plan year Max. contribution for Funding purposes looks like?

Many thanks to All PPA

AD

I have a plan that is failing the 414(s) test on the percentage test. I did not run it through the rate group test.

They are excluding bonuses, and everyone is getting one. My difference is ~5.4% higher for HCEs.

This is a SH Match plan that is determined on a payroll basis (not annual).

Because no deferrals are taken from bonuses, there is no match.

Do I even need to have a correction? If so, what would it be?

Payroll provided stopped the deferral at $18,000. However, the participant is over 50 and had changed his deferral percentage in June 2015 so that by the time the last payroll of 2015 he would have deferred the max.

Payroll issue has been corrected so going forward deferrals will continue for participants catch up eligible.

the fist payroll since hitting the 402(g) limit there was no withholding. The employer has set up the catch up contribution to begin with the next payroll check.

Client is concerned about missing the withholding the first payroll following the $18,000 limit.

Am I correct in saying Rev Proc 2015-28 provides relief to the employer since the error was brought to their attention by the participant and the employer implemented the withholding to start the next payroll period??

No QNEC is required. Since this is a 3% Non Elective Safe Harbor, no match is required to be made.

This is not an auto enrollment plan.

thoughts??

They go by a calendar year, correct? My renewal is next year and I have enough credits for my 3 year cycle, but if the new cycle technically starts on 1/1/16, then I will sign up for the APC that SunGard is going to have here in Orlando in February.

I last renewed in 2013 and am drawing a blank on this....

For a non-ERISA (governmental) plan, can anyone point me to published guidance that would indicate that payment of a VCP fee from the trust would violate the exclusive benefit rule (or for another reason would not be permitted)?

I've always understood that correction expenses should not be paid from plan assets, but I am having trouble documenting that.

Thanks!

I do see in the IRS manual that if there is an indication that the compliance fee check came from plan assets, that the application will not be reviewed until it has been demonstrated that the plan has been reimbursed. This is EPCRS policy, but is it grounded in law?

One of our sponsors acquired interests in a couple of companies late in 2014 and decided to bring the employees of their newly related entities into their 401(k) plan effective as of 1/1/2015. Unfortunately, they neglected to tell us, so no participation agreements were executed. Now here we are in late October 2015.

To complicate things, one of the participating employers isn't part of a controlled or affiliated service group with the sponsor, so they also created a multiple employer plan. Obviously we have document and/or operational issues here.

The way I see it there are two alternatives:

1) Correct the operational errors using SCP, although I haven't thought about what that would mean or if it would even be possible under SCP, but I'm sure nobody would like this result, or

2) Retroactively restate the plan effective as of 1/1/2015 onto our VS document, incorporate multiple employer provisions, and include participation agreements for the participating employers. Then file under VCP.

I have no doubt the IRS would issue a compliance statement on these facts, but I'm looking for a way to avoid the costs of a filing for this sponsor without jeopardizing the qualified status of their plan, but I'm not seeing it!

Anyone????

We are submitting a Form 5307 for a plan that has slight variations from our Volume Submitter Specimen Plan. Since the last Determination Letter (2009), there have been two amendments to the Plan (Good Faith PPA and Good Faith Final 415). We would consider these "interim" and not "discretionary."

Line 3f of the form asks if there have been any discretionary amendments not covered by the latest DL. The answer is NO since the two amendments are interim. The instructions say that if the answer is NO, then STOP - Form 5307 may not be used and a 5300 should be used.

Does this make sense to anyone? We have submitted 5307 applications many times, but there has always been at least one discretionary amendment that we could report. Should we consider the restated Plan itself a discretionary amendment, or should we consider the choices in the interim amendments to be discretionary (e.g., the choice to use the first few weeks rule in the 415 interim amendment).

Sorry this is so long.

Thanks for any suggestions.

New plan executed their plan document effective with a 6/1/15 date, but did not start withholding until October, which also violates the 3 month requirement I believe. What is the proper procedure? Amend the effective date?

Thanks

Employer X allows vendor G to set up an on-site medical clinic on its premises. The services provided by the clinic are either borderline insignificant in the nature of medical care while other services constitute services that are significant in the nature of medical care. If Employer X decides not to pay premiums for the ability of its employees to access the clinic but allows its employees to pay premiums for access to the clinic on an after-tax basis. If an employee of X is covered by an HDHP and pays after-tax premiums for access to the clinic, is the employee an "eligible employee" who is able to make pre-tax contributions to an HSA?

On October 21, 2015, the IRS issued IRS News release 2015-118, announcing the changes in pensions and benefits limits for 2016. Most limits were unchanged. An updated chart, showing these limits for 1996 to 2016, is available by clicking here.

We have a plan that withheld 401(k) deferrals from bonuses, which are excluded in the plan document. So we need to return the deferrals to the participants.

For corrective contributions, that is, when we need to GIVE the participatn something, we've been using the DOL calculator for earnings out of convenience.

Can this same method be used when calc'ing earnings on funds LEAVING the plan? If the participant experienced a loss in real life, then using the DOL figures will jsut serve to exacerbate the losses.

So how do you figure out the earnings for funds leaving the plan in practice?

(My software cannot accomplish this)

Good afternoon, All - We have a client looking to:

1. Exclude from 401(k) plan eligibility lawful permanent residents (LPR's) of the U.S. who are on both U.S. AND home country payroll, and

2. Exclude from 401(k) plan eligibility certain visa holders -- just as a general rule on its own in the plan document or in combination with being on both U.S. and home country payroll.

Knowing that it's a Safe Harbor Plan that passes minimum coverage testing, can one or both of the above be done without being deemed discriminatory?

Help and guidance is GREATLY appreciated. Thank you.

Brian

We just took over a plan from another TPA. Client has been allowing ROTH deferrals but there are no Roth provisions in current AA. Client informed us that they would like us to include the ROTH change in the PPA AA, but to backdate the Roth effective date to the date they stated allowing ROTH. I am not comfortable with this. Has anyone else encountered this issue and how have you addressed it?

Also, this client has been allowing pre-tax deferral amounts less than what was stated in the AA. AA imposes a 1% minimum deferral rate, but client has ignored it. What is done in this instance? We will be taking the lower limit out going forward when plan is restated for PPA.

Some recent news on the VEBA front which doesn't seem to appear in these boards:

http://www.thinkadvisor.com/2015/02/18/fiduciaries-to-pay-39m-for-raiding-death-benefit-p

https://www.courtlistener.com/opinion/2898304/odc-pet-v-john-j-koresko-v/

Plan A is less than 100 participants at BOY. In June, Plan B (also sponsored by the same employer) merges into plan A. Now there are 150 participants.

Seems clear to me that no audit is required for 2015, since the BOY count was less than 100. However, I've been wrong once or twice in my life, so I thought I'd just see if folks agree that no 2015 audit required?

Thanks.