I've inherited a 403(b) plan that was intended to terminate in 2012. For reasons that are unclear, the annuity contracts in the plan were never distributed to participants in accordance with Rev. Rul. 2011-7. Instead, participants were contacted and asked to elect to withdraw their balances. Unsurprisingly, not all of the participants did so in a timely fashion. The plan was effectively forgotten until this summer, when 5500s were filed for 2013 and 2014 because the plan retained assets during those years.

After this TIAA-CREF was finally contacted and a termination/distributions of the annuities was requested. TIAA-CREF went forward with the termination and distributed the annuities, but backdated the termination to the date of the original resolutions in 2012. So now the question is how and for what year do we file a final 5500 if TIAA-CREF is treating 2012 as the year of termination and a full 5500 has already been filed for 2012, 2013, and 2014?

Obviously this also raises questions of whether or not the assets were distributed as soon as administratively practicable. Will the termination be deemed invalid, and, if so, what then? My understanding is that some of the assets were withdrawn by participants back in 2012.

Thanks for your help.

Re: Non-electing church plan. The church is hiring someone to do repairs on the church. They want to make him an employee because of liability and workman's comp issues, but they don't want to give him an employer contribution if he is still there a year from hire. The only contribution the church makes is an employer contribution of 12% of pay once an employee has been there for a year. No salary deferral or match.

If he is still there after a year, can they exclude him from the employer contribution?

Can anyone recommend a TPA in the U.S. that specializes in administering plans for resodents of Puerto Rico?

Thank you in advance!

Participant elects to defer 3% of pay in 2015 and employer doesn't implement election fro 10 months. 3% of pay equals $10,000. Employer does applicable notice to employee and deposits $2500 per 2015-28. No match.

Questions: Can employee defer add'l $15,500 ($18,000 less $2500) or are they limited to $8000 (18000-10000). IRS Webinar from a while back seems to say 402g limit is reduced by missed deferrals so i'm thinking participant limited to $8000 but cant find anything really concrete on this.

Also, does the $2500 count as employer contribution in general test. I think not, but again, cant find anything concrete on this.

I am preparing PBGC Form 501 for a DB plan that terminated and has paid everyone out, with the exception of about a dozen missing participants, who will be reported on the Schedule MP. A Form 5310 was filed, but the determination letter hasn't been received yet. My reading of the PBGC Form 501 instructions is that for line 3b (Date of receipt of IRS determination letter), if the plan isn't relying on the distribution deadline based upon receipt of the determination letter, line 3b can be left blank. Is this correct?

Thanks for any responses!

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.