We were just told that a 2013 ADP refund (processed by 3/15/14) was done for the wrong amount. Lets say the correct refund should have been $2,000 but the amount processed was $1,500 (so we're short $500 now).

Since we're in 2015 and passed the 12/31/14 deadline, do we have to do a 1-1 QNEC plus remove the remaining excess+earnings? If we do the QNEC, each participant will end up with $1-2. Is there anyway to write this off as a clerical error and just process the distribution?

If the QNEC is necessary, could we avoid deposited the $1-2 for NHCEs from the 2013 plan year that are still active but never had/still don't have an account?

Thanks!

If I have a controlled group of companies A, B, and C, all participating employers in Plan X, is it possible to design it so that each separate company can make a different discretionary profit sharing contribution (or none) based upon how well that company does? Without QSLOBS.

Thanks

Let's say a participant terminates employment on 1/1/2010 and he's 50% vested in the matching portion of the account, can the plan forfeit the non-vested balance right away?

I know that the IRS states that the forfeiture of more than 0% but less than 100% vested account can be recognized at the earlier of 1) 5 years of break in service and 2) participant electing a distribution.

Is it possible for the plan document or the adoption agreement to have language that allows to forfeit the account before such date occurs?

Client offers a safe harbor 401(k) plan (3% nonelective) which has a discretionary profit sharing contribution with no allocation conditions. Client wants to add a 1,000 hour allocation condition to the profit sharing contribution. If done, it is expected that only 2 HCEs will receive the profit sharing contribution (client is a physician's office which employs 13 HCEs and 8 NHCEs, most of whom work only a few days a month due to hospital commitments). Since all employees receive the 3% SH nonelective contribution, I believe we pass coverage testing (even if none of the HCEs receive the discretionary profit sharing contribution, because they are at least getting some nonelective contribution). But, do I need to test the discretionary profit sharing contribution for discrimination under 401(a)(4) as well? If so, do I have any chance of passing if 2 HCEs will benefit and no NHCEs will?

I have a participant that received life insurance from a parent's death and the participant has received the cash, can this cash be rolled into the 401(k) Plan. To the best of my knowledge the answer would be no, dose anyone know anything different?

My wife left a job in CA on good terms in 2013, and received a letter of an overpaid match to her 401k in July of 2015. The amount is about $1000. First letter ignored. Second letter threatened collections. I spoke with HR and they are sending us audit evidence to show the overpayment, which stopped the clock on collections. I don't feel like the audit was done timely, and do not want to give the money back unless I am sued and a judgement entered against me. Can they legally send me to "collections" or must they sue to recapture the funds? What are my options? We used the 401k to pay for professional graduate education tuition, and would be paying out of pocket (with student-loan money).

Company A will acquire company B on Nov 1. This will be controlled group. Company B does not have a plan. The will join Company As plan.

Even though Company B does not have a plan, can Company A use the transitional rule and bring the participants into the Plan 1/1/2016. Company B participants would not be include in any 2015 testing.

Thoughts??

The Company sponsored a SEP with 2 participants. It turns out 1 participant provided no services to the Company and was ineligible to receive SEP contributions. Does that mean the other participant's SEP account could be disqualified?

Hi. What is the EPCRS correction method for correcting the following error: employer's plan provides for a 4% matching contribution. Employer has been contributing an amount equal to a 6% match to participant accounts since the beginning of 2015.

Thanks.

So I have a situation where Company B will be doing an asset purchase of all of Company A's employees. Company B is new structure of Company A. So an assumption of the plan is presumed to be fine.

The issue is that the new Company B will actually consist of Company B and C with employees going to different companies both B and C. There is no issue in setting up another plan with the same provisions as the assumed plan for Company C.

My question is does there need to be corporate event- transaction to do a asset transfer or trust to trust transfer of some of the participant accounts from the assumed plan to a new plan for Company C after the asset sale is done?

Should this be done during the asset sale. It just does not make sense to me to have an assumption and at the same time split the plan assets. It seems to me there should be an order to follow.

Step 1 - Assume the plan by the buyer

Step 2 - Trust to Trust Transfer for those employees of Company C

The other option would be to do an asset transfer from the Company A Plan to new Plans set up for Company B and C. ( All three plans would be exactly the same. Plan is 100% vested already.) In this scenario we would have to terminate Company A's plan after transfer.

Other than Board Resolutions and language needed in the asset sale agreement I do not think a 5310-a is needed.

Any thoughts on either scenario?

I have a plan which excludes bonus wages from the definition of compensation.

When running ADP/ACP testing, do I have to test using the compensation as described above or can I use the full year compensation? The client did not withhold 401k or give match on the bonus amounts.

Prior TPA showed Life Insurance in the 401k plan. In working through the 2014 valuation work, we, the new TPA, are thinking that what the client actually has is an annuity contract (investment vehicle) and not Life insurance (welfare benefit).

We are basing this on the Schedule A information provided by the Insurance Company holding the contract. And the fact that there is no mention of cash surrender value or death benefit on the pages as provided by the Insurnace Company.

Am I missing something?

I have a money purchase plan that was effective on 1/1/14. They ended up without prevailing wages in 2014 so they did not fund the plan. Do I still file a 5500 with 0 dollars and 0 active and total participants?

Thanks.

For the "a" penalty I've seen estimates of $2,080, $2,084 and$2,120, anybody seen an official release?

For the "b" penalty I've seen $3,120, $3,126 and $3,180?

Thanks

We have a QDRO for a plan that is only valued annually. In this case the QDRO is silent as to the payout date for the alternate payee except for "as soon as administratively feasible." It does require us to calculate gains/losses on the amount for the alternate payee from the determination date (last year's valuation date thank goodness) until the date of segregation (note this is not the date the alternate payee gets their money as they have the option to leave it in the plan).

So the question is... how do we calculate the interest when we don't get a financial statement until the end of the year? This plan is not invested with a custodian or in mutual funds where I can simply work with units instead of dollar amount either. We are debating between estimating the gains based on last year, vs. waiting until next year when the valuation is complete.

We have a client with first year audit requirement who waited to hire auditor. Auditor will not have report completed by 10/15 filing date and wants client to attach the "Draft" copy of report which we received today.

Any thoughts?

A foundation with 11 employees, has Deferrals only to 403b plan and a flat percentage to everyone into a SEP. I am trying to figure out if they need to file a 5500. The SPD says it is set up to qualify under 404c of ERISA. Does this make it an ERISA Plan and need to file a 5500? .

Also, can anyone think of anything in Particular I need to watch for with a SEP - 403b combination?

Calendar year plan terrminates in December 2014, but assets remained at 12/31/14.

Plan had individual brokeage accounts. The last assets were rolled out of the plan in February. We just found that out. It is my understanding that the final 5500-SF was due by 09/30.

I am hoping to avoid the $60 DFVCP penalty (we will get it filed tomorrow). We filed for an extension on the 12/31/14 filing. Any argument that that extension woud extend the 2015 short year return also? I don't really believe that it does, but I'm hoping that I am wrong.

Thanks in advance for any guidance.

Here are some changes listed on the draft form 5500-EZ.

I suppose the same rules will apply by the time they release the instructions for the 5500-SF as well.

Trust information on line 4 is no longer optional. You are required to answer these questions relating to the name and EIN of the trust, and the trustee’s name and telephone number.
Preparer information on the Form 5500 is no longer optional. You are required to answer these questions relating to the preparer’s name, address, and telephone number.

................

I knew the trust info was coming due to the 5500-SUP, but the preparer info caught me off guard.

Let's say a participant has 2 IRAs and needs to take an RMD this year. I know that he can take the RMD from just one of the IRAs (unlike the requirement to take RMDs from each 401k plan). My question is this: can this participant take a direct rollover from one of the IRAs first, before taking the required RMD for the year?

Let's say the participant has $10,000 in each of the IRAs and his RMD for the year is $1,000. Can he rollover $5,000 from one of the IRAs early on in the year and then later take the required RMD of $1,000 from one the IRAs, or must he first take an RMD and only then be allowed to rollover?