Plan participant has $125K in his account. Resolution to terminate has been executed. This is a very small plan. The participant does not know where his wife is. He as hired a P.I. and begun divorce proceedings. How can he get his account out of the plan so it can shut down?

I'm confused by the EPCRS discussion / instructions regarding the potential determination letter requirement (and available exemptions) when correcting an operational failure by adoption of a retroactive amendment.

If you have an operational failure that doesn't come within the limited items permitting correction by retroactive amendment in SCP and the plan is maintained on a volume submitter, do you potentially have to file for a determination letter? In this case, the error is not being solved by adopting a volume submitter plan or an IRS model amendment but would include the adoption of an "optional amendment" to the existing volume submitter plan document. Is that enough to avoid any possible Determination Letter obligation? (The amendment would be to provide for full vesting of all accounts as of a prior date. TPA erroneously coded all accounts as 100% vested. Plan sponsor is fine with giving full vesting as only 2 NHCEs were impacted, amounts were small, and plan is now frozen.)

An employee discovered that his employer incorrectly calculated his deferral for this week's payday. Employee has cashed his paycheck so it can't be voided and redone. Can employee pay back the employer and the employer make the correct deferral deposit to the plan? Or does the employer need to make a QNEC contribution?

Plan has a last day & hours requriement to receive the match. Participant terminates with less than 500 hours. Can the be counted as "excludable" for match coverage test? I know they can for profit sharing.

Thank You!

Solo 401(k) plan was established 6/1/2013.

Trust ID was obtained.

The plan was never funded so balance has been $0.00 since inception.

Form 5500EZ never required to be filed since balance was under $250,000.

Client now wants to terminate the Plan.

Is a Form 5500EZ required to be filed as a FINAL since it is terminated even though the plan was never funded and Form 5500EZ was never filed in the past?

Thanks for any guidance.

I have started a business with a partner (LLC) and we have done well in our first year making 35K each.

We are in the process of setting up our solo 401k.

I am wondering how to set up our business

structure to max out my pretax contributions.

My facts:

I make 450,000 in my day job as a doc.

I max out my workplace 403b (17.5k)

My wife is a stay at home mom with no other income.

I have maxed out my individual FICA taxes.

My inclination is to split my ownership with my wife so that she may max out her 17.5 individual contribution for the year. The downside is paying fica taxes on her income, but the upside is that we can put away 17.5 individually in her name that we couldn't otherwise because of my 403B contribution.

Thoughts?

We have a client that owns a proprietorship 100% no employees and has a SEP IRA for that income

He is also a doctor and just bought 50% of a practice that has a 401k plan. Can he continue to fund the SEP for the self employed income?

Does anyone know if a Plan Sponsor that has previously filed a 5500SF can switch to a 5500EZ?

Client has downsized and it is now only husband and wife. The previous TPA continued filing an SF the last couple years even though there were no employees.

Can they switch to an EZ?

If so, any thoughts on why they should not switch?

What is the salary deferral timeline for a new plan for the owner?

My client finally decided to establish a 401(k) profit sharing plan for the 2015 plan year (January 1 to December 31) last November.

Since there will be the last two payroll to defer from and 100% of the owner final two payroll check doesn't add up to get him to the 402(g) max that he wants to contribute, will he be allowed by law if he write a personal check to make-up the remaining amount to get him to the maximum deferral amount.

What is the salary deferral timeline ramification for the other non-owner participants?

Thanks!

An employer has an unusual plan design. Most employees pay a portion of the cost of coverage on a pre-tax basis through a cafeteria plan. Other employees (don't ask why) instead pay the full cost of coverage (apparently by writing a check or checks to the employer) and then receive additional (taxable) compensation in their pay so that they effectively pay the same percentage of the premium for the coverage.

Does the employer calculate whether the coverage is affordable for this second group of employees by using the full cost of coverage or can it include the additional compensation so that it "nets out"?

Thanks for your help.

A payroll company didn't limit the comp of an HCE to $260,000 when calculating the match for the plan. I understand the excess match gets forfeited, but is it included in the ACP test first?

I stepped into the way-back machine and remember learning long ago that 402(g) excess contributions by HCE's get included in the ADP, but can't find any similar information on the ACP test.

Any guidance is appreciated

I realize now, I should have posted this in Plan Defects. The link there (http://benefitslink.com/m/qa.cgi?db=qa_plan_defects&n=122) only seems to speak to ineligible employees. Someone else asked this question, but only got that link as a response.

Thanks.

A participant (in a retirement plan that provides participant-directed investment) received a letter from the plan's recordkeeper informing the participant that the recordkeeper had been instructed by a fund to impose the fund's market-timing restrictions on the participant.

The participant feels a little offended because "no one told me ...." None of the plan's "fund fact sheets" say anything about market-timing or other disruptive trading. The prospectus for the restriction-imposing fund has a disclosure, which has no table-of-contents heading, is tucked away on page 47, and is in the middle of surrounding explanations that obviously are irrelevant to a retirement plan's participant. It is believable that someone who generally read the prospectus would have skipped over these sections.

While not giving to the offended participant's view, the plan's administrator believes it would be desirable for each fund's fact sheet (customized for the plan) to include a description of the fund's policy against market-timing directions.

The recordkeeper, which uses one of the big publishers to compile the fund fact sheets, says it can't be done.

Is the recordkeeper correct?

Audited plan.

What are people doing for the Schedule A?? These are just regular policies with Cash Surrender Value. I have the info on commissions paid but I don't think anything else applies. But then again I'm not sure which is why I ask...

Can anyone confirm my general understanding of the differences between a spin-off and a transfer of assets and liabilities or point me to a good summary of the two actions? Whenever I read the Form 5310-A instructions and other posts here, I fear I may not be fully appreciating the distinctions.

My general understanding is that a spin-off is basically the splitting of an existing plan into two or more plans. After the spin-off, the spun-off plan might live on to function as a new stand-alone plan, might be terminated, or might be merged into some other plan. So, for example, if a company "spun-off" / sold the assets of a particular division and the employees of that division went along with the assets to form a new, separate company, the seller might also spin-off the portion of the existing plan corresponding to the employees of the sold division and the spin-off plan could be used to establish a new, continuing plan for the new company.

I have seen a transfer of assets and liabilities described as basically a spin-off from one plan and a merger into another plan which generally makes sense to me but I'm not sure exactly what all that means or requires. In some cases, the notion of a direct transfer of assets and liabilities seems to be thought of as more streamlined than a spinoff and separate plan merger with TPAs offering to facilitate by basically having the contributing plan amended to agree to the transfer of assets and liabilities for the group of transferring participants and the new plan formally agreeing to accept the assets and liabilities. Does that make any sense?

For example, if we have a company entering into a joint venture with other companies so that the resulting JV will not be a part of the controlled group of any of the "contributing" companies and will maintain its own 401(k) plan going forward, does a transfer of assets and liabilities from an existing plan into the new JV plan make sense and can that be done without thinking of this as a formal spinoff and then separate merger with the JV plan?

Client is considering amending to add a fixed match with no allocation conditions, and adding a last day requirement to receive their discretionary match. This would not be a safe harbor match. They have asked if they could amend or remove the fixed match mid-year in the event that they have cash flow issues.

Assuming they could pass benefits rights and features by making sure the HCEs don't front load their deferrals before such a change, would such an amendment be allowed?

401k plan terminates during 2015. For purposes of the participants at beginning of year count for 2016 would the employees who were not deferring (they have no account balances) and were counted as "active" in years before the plan terminated because they had ability to defer, still considered "active" for 5500 and audit purposes since they no longer have an ability to defer?

A CPA has suggested that we need to be careful allocating profit sharing to owners in proportion to their ownership for S Corps.

So for example, assume Owner A owns 70% and Owner B owns 30% of an S Corp. IF we do $7,000 of profit sharing for A and $3,000 for B, the IRS might suggest (according to this CPA) that this is a disguised dividend of some kind.

My proposed response was "So you're telling me every 50/50 S-Corp that is giving the two owners the same profit sharing has a problem?" But then I realized that that wasn't a good argument because it was being allocated based on compensation and not ownership (or at least a per capita allocation if comp was different). In my scheme, the profit sharing is being allocated based on solely ownership.

So I need to do my due diligence here. Anyone see a problem?

Years ago I remember there was an 800 number you could call to check on the status of a Form 5500-EZ. You could search on an automated system by EIN and PN and they would tell you whether a Form 5500-EZ had been received by the IRS. Does anyone know if this still exists? A plan sponsor is unsure if he/she filed the 2014 Form 5500-EZ. Is there any other way to verify?

"At least since EGTRRA we don't have to worry about..."

Was just thinking about 401(k) issues at work and cited EGTRRA to myself and suddenly realized the number of years that have passed since that happened.

It's been nearly as long since EGTRRA as it was before that to the big tax reform act of 1986.

I remember the senior tax partner at the accounting firm where I did a tax internship telling how he left the IRS as an auditor when 1986 reform happened because it reset the playing field and there was money to be made in tax consulting.

I'm really trying to see if this should throw a "Red" flag. The parties enter into a settlement wherein the alternate payee is paid 50% of the payee's Defined Benefit Plan. This is a small business. After the Consent is signed but before the QDRO is entered the Plan is scheduled for termination by the Plan administrator. The "Plan administrator" happens to also be the Participant. Could this affect the alternate payee's 50%? Something just doesn't feel right. I'm afraid someone is trying to pull a fast one. The participant has not retired at this point. They are asking that the QDRO, after initial review include termination language.