Plan Sponsor wants to tier their match whereby the match rate increases as deferrals increase. We have recommended against that, but they are still considering.

I know that the issue is whether the match is effectively available at all rates of deferral. I know that it is a facts & circumstances test and there is not a safe harbor percentage whereby plan sponsor can be assured that the effective availablity is met. Having said that is there a percentage of the NCHE's (less than a 100% of course) whereby the plan sponsor can at least feel a little comfortable that the they have met effecitve availabity?

Thanks for any guidance.

I guess I can only blame myself for trying to do something like this during this insane time of trying to get so much done with so little time left. Sometimes you just don't think quite clearly...

Yesterday, I went over to the local Bass Pro Shop to get a small 9mm for home protection.

When I was ready to pay for the gun and bullets, the cashier said,

"Strip down, facing me."

Making a mental note to complain to the NRA about the gun control wackos running amok, I did just as she had instructed.

When the hysterical shrieking and alarms finally subsided, I found out she was referring to

how I should place my credit card in the card reader!!!

Received QDRO and processed benefit package for alternate payee (AP) to make elections. While waiting for reply, found out that since package was issued the AP went to prison. Our normal practice is to suspend distribution until AP returns elections, which is normally not a problem. Logic is that if person returns elections there should not be any further issues about QDRO, such as contesting amount. Anyway, is there any required period for suspension, since the participant has terminated and wants payment of benefits? I note that AP's benefit is segregated into separate account for the AP.

Currently have a Safe Harbor only plan which prevents us from being Top Heavy because no funds other than the Safe Harbor were being made. Now hire 6 union folks and the collective bargaining agreement requires a small percentage of pay contribution each year.

Question, does this now mean we have additional employer money in the plan and now have to make top heavy minimums to non-key folks or does the fact that we are only providing the small employer contribution to the union folks separate us from the top heavy issue?

My brain is not working clearly and wanted to see what you think.

We have a new client, and S- Corp(Company A) family owned.

They are starting a new 401k plan. The stock ownership for S Corp is as follows:

Dad 43%

Mom 36%

Adult Son 20%

As we are working on the adoption agreement for the new plan we found out that the S- Corp also owns 98% of a newly formed LLC that will do the same type of business in different location.

The ownership of the LLC is

98% company A

2% unrelated person

After typing this out I am pretty sure it is a control group and they should cover the new LLC. Currently the only employees of the LLC also work for the company A and receive w-2 wages from them. So in my mind they are covered already by the new plan. Future employees though will have to be included for coverage testing if they client opts not to cover the LLC. correct? Sorry if this is a stupid question

I have a plan that has a very rich death benefit. If an active participant dies then the spouse gets a 100% J&S payable immediately. There is no reduction for early retirement. The normal form for the plan is 10cc. The benefit is converted to 100% J&S using the plans factors.

A participant aged 45 died. The spouse is 41.

My question is how to calculate the 415 limit on the benefit.

I assume that I would reduce the dollar and pay limits to age 45 by using plan and applicable assumptions and take the lesser of these.

What if the spouse decides not to immediately commence benefits? The plan provides for actuarial increase from the date the benefit could have commenced. (Month following death)

The benefit will increase each month. Does the 415 limit increase each month also?

Do I use the participant's age or the surviving spouse's when calculating the limit?

I love being able to click the little button/bullet and go directly to the first unread message in a thread instead of having to scroll through all the ones I've already read.

However, about a week ago (or so), I noticed that when I do that, I can only read whatever message shows up on the screen in the thread. There is no ability to scroll down through the rest of the thread. I've tried using the keyboard page down and arrow keys. I also tried the scroll button on the mouse and "grabbing" the scroll bar on the right side of the screen.

Anyone else??

Small illiquid REIT in a 401k plan. Do I report as a real estate? The investment is definitely not filng a separate 5500 as a DFE so I thgouth I had to look through at the underlying holdings.

I have seen similar posts on here over the years, but have been unable to locate one with a definitive solution.

Assume that a DB plan participant dies without naming a beneficiary. Under the Plan's default beneficiary structure, the death benefit goes first to the spouse, then to any descendants, then to the estate. The participant doesn't have a spouse or any descendants. If no one opens an estate proceeding, what are the plan sponsor's obligations?

• Is the sponsor required to open the estate proceeding itself?
• Does the sponsor simply hold the funds and be prepared to pay in the event that a claim is ever made?
• Does the sponsor have an obligation to use some sort of good faith efforts to locate next of kin (similar to a missing participant situation), to ask them to open the estate? What if they refuse (e.g., due to the cost)?
• Perhaps some other solution?

Thanks for any ideas!

Does anyone know how to get deferred compensation reinstated for a provider that was once getting deferments and now they have stopped. I was told that he would need to send his claims with his individual NPI number in order to participate. Does this mean since he is using his group NPI and is now considered a group, he doesn't qualify? Or is there just some paperwork that needs to be completed? Any help I can get will be appreciated.

Ongoing multiemployer defined benefit plan (so not terminating).

A Participant vested in a benefit over 30 years ago, then left and was never heard from again. Assume for the sake of argument that the Plan's administrator did what it was supposed to do in trying to locate him, but to no avail.

Well, the guy just surfaced and is applying for his benefit.

Per the terms of the Plan, benefits commence 60 days after the close of the Plan Year in which the participant turns 64 unless the Participant elected otherwise. Obviously, that did not happen. So, for this guy, his benefit should have commenced in 1998.

He turned 70 1/2 in about 2003 or so.

So, my question. I'm assuming that we now pay him his benefit retroactive to 1998 when his benefit should have commenced. But, do we need to do anything regarding the RMD that was missed? Or will that be encompassed by the fact that we're paying it back to when he was 64?

I know there are big tax consequences to the Participant if he doesn't start the RMD when he's supposed to. I'm considering going through EPCRS (just considering it, not definitely doing it).

Your thoughts? Anyone go through this?

Thanks.

I have a quick question about the Roth Distributions... Let's say a participant takes a partial distribution, does basis leave first or is the distribution taken pro-rata from basis and gains? It's my understanding that the treatment is different depending on if it's a 401k account or an IRA account:

1) For 401k distributions, the distribution of Roth source is considered to be taken pro-rata from the basis and earnings.

2) For a Roth IRA, the basis is considered to be taken first until all of the basis is taken out. Once all of the basis leaves the account, the earnings will have to be pulled.

Is my line of thinking correct?

Do you need to vest everybody if you freeze a profit sharing plan?

Thanks

A one-person business owner forgot to file his 5500-EZ due 7/31/15 and no extension was filed either. It's a solo-401k with more than $250k of assets and 5500-EZ forms were filed in 2013 and earlier as required. It looks like the penalty is $25 per day ($2,000+)!

Does anyone know if there is a way to reduce or eliminate the penalty or is it best to just file the 5500-EZ ASAP and wait for the bill from the IRS?

Thanks.

I received in the mail a check dated in 1984 for $235 from I presume a plan participant who stated he never cashed it. It is a former pension plan trustee we had way back when

He wants us to reissue

Are there any rules out there on this?

I've spent many hours researching online and this seems like the most knowledgeable forum around for retirement account issues.

- age 33, want to retire at 55

- sole owner of a consulting biz/LLC earning 300k/year for the next 5 years at least, taxed as S corp, no employees

- may join another totally separate company next year as full time employee (wouldn't impact consulting biz) and would be eligible for their 401k plan

If the goal is maximum tax efficiency, what's the best combination of accounts to achieve this? From what I've read I believe it's a combination of solo 401k + DB plan. How would the #s work on that, assuming the first year DB contribution was something like 40k? Do I need to pay myself 100% of comp in salary (versus distribution) in order to max out? I talked to a couple different CPAs and got differing answers, one said that the two accounts are aggregated together in terms of contribution limits and the other disagreed; it's clear that even very qualified people are confused by some of this material.

wasn't sure where to post this question and realize client needs to consult with counsel. this is more for my own curiosity.

client is removing a trustee from the Plan who is an employee but not an owner. The employee still works for the company. the question asked is what liability would this employee have in the future if litigation is brought against the Plan and/or Trustees that might include the period of time that the employee was a Trustee of the Plan? Employee is not the sole Trustee.

Would ERISA's fiduciary six year statute of limitations apply?

I have a seperate interest DRO for a DB plan that allows an alternate payee to commence benefits any time after the participant's earliest retirement date.

I was under the impresssion that alternate payees had to commence no later than a participant, as QDROs are commonly drafted to include that language, but I could not find a citation to back that up. This is not an RMD issue.

Any thoughts?

The auditor is insisting we report the corrective distributions (for the 2014 plan year, corrected on 3/1/2015) on the Schedule H in the same manner they are treating these distributions in their financial statement. Specifically, the auditor wants us to -

1. Report these corrective distributions as a payable at 12/31/14 for excess contributions paid in the following year. We are to list them on line 1j(b), Other liabilities.

2. Reduce the Participant contributions reported on line 2a(1)(B) by the amount of these corrective distributions because their best practice is to reduce employee contributions because these were not eligible contributions. The audior says these contributions are required to be remitted back to participants and therefore were not actual contributions in 2014.

3. Not report the corrective distributions on line 2f, on either the 2014 or 2015 Schedule H, because the participant contributions are being reduced by this amount. The auditor will add a footnote to the financial statement describing this activity.

I know the Generally Accepted Accounting Principles (GAAP) the auditor uses for the financial statement wants the corrective distributions handled this way, but I never heard of the Schedule H being completed in this manner.

Has anyone come across this situation this year? If you have, how did you handle it with the auditor and the client?

Not sure this is the right board to post this question, but would appreciate it if someone could provide the names of 4 or 5 insurance companies who might be interested in selling us annuities for our current DB plan retirees.

Is it safe to assume that the giant insurance companies would not be interested in what is probably a $2 to $3 million deal?