We have taken over a 401(k) plan which had a deemed loan for missed payments. From what we could see, the plan had the normal cure period listed in the plan documents. Loan amortization schedule was based on bi-weekly payments but employer payroll frequency was semi-monthly and neither the recordkeeper nor employer caught this discrepancy. Employer submitted payments semi-monthly. The recordkeeper had instituted an Auto Default/Deem loan process if loan payments were not up-to-date and deemed the loan without notification to the participant or plan sponsor. The end of the cure period is 9/30/15 according to the RK but loan was deemed 7/1/15 and the participant was not given an opportunity to bring it up to date.

Should the RK have amended the plan document/loan policy for the Auto Default/Deem procedure? No updated SMM's or SPD's have been provided. The only documentation is a letter to the plan sponsor. RK says it following IRS regulations; however, it doesn't look like it following the terms of the plan as far as i can tell. I'm not sure if the loan agreement disclosed the terms of the auto default process. They claim they cannot correct or reverse the 1099 which is hard to believe.

I am advising a client that will soon be involved in the spinoff of a subsidiary. For various reasons, both buyer and seller are interested in the transferring employees remaining on sellers plans for a period following the date of the transaction. The client's vendors are advising that this arrangement is common and does not create a MEWA since the arrangement won't last beyond the end of the plan year following the year of the termination. Although I agree that the arrangement would be exempt from M-1 filing requirements, I view the arrangement is still a MEWA and am concerned that no exception to any applicable state laws would apply.

Have any of you heard of/participated in these types of arrangements? How have you dealt with state laws on MEWAs that would seem to have no exception comparable to the M-1 filing exception?

Plan terminated and paid out in 2012. In 2015, plan has an expense recovery of $56,000, which needs to be distributed to 75 participants. What are the mechanics for re-opening the trust and handling the payouts so that they can be rolled over?

Can (or is) a church plan with multiple employers also be considered a Multiple Employer Plan (MEP) or a Multiemployer plan? Thanks for any help.

The financial institution who is the recordkeeper for a 401k plan with self-directed accounts replaced its money market fund with another MM fund. The amount involved was more than 5% of the plan's BOY assets but I am wondering whether this must be reported on line 4j, as it was an involuntary transaction on the employer's part.

Also, if it must be reported, the required attachment for line 4j asks for the purchase and sale prices as well as the cost and the current value of the asset on the transaction date - are they not the same thing? Or is the purpose to find out whether the purchase or sale price differed from FMV? N/a in this case since share prices of both cash funds were always $1, but just curious about the redundancy.

12/31/13 - Local division files their medical plan 5500 with 1000 participants.

1/1/14 - Corporate office assumes the Medical plan and considers it part of their own welfare benefit plan

Seems to me that 2013 was a Final filing, but there were over 0 participants. How would we close it out?

This seems to be a very basic question but I am now having

"third-thoughts".

Employer asks us to review a Top Heavy safe harbor match 01(k) that another TPA firm currently handles.

No employer contributions beside the safe harbor match.

OK, but there are a few employees that have met the age and service requirements and have opted not to defer. OK, no match for these participants.

Since the plan is top heavy and these people are eligible and were

employed on the determination date, must these individuals receive the top heavy minimum 3%?

We say yes, the current TPA says no and this is the way they

"handle" all their 401(k) plans and has the audacity to back-

up the claim by telling me she has "many years as a TPA"; and has

requested the citation from us.

So, I'd like to know where to locate a cite.

Is it legal to Add safe harbor 401(k) to profit sharing mid year?

I have a prospective client that wants to do one plan for two employers. There is common ownership, but it is not a controlled group.

ABC is an engineering firm.

XYZ is a mechanical, electrical and plumbing contractor.

ABC provides traditional engineering services for XYZ and XYZ provides design for constructability and budgeting services for ABC (in addition to selling work for ABC).

Any thoughts are whether this is an Affiliated Service Group?

Ok, my brain is drawing a blank. Plan was frozen in 1990, person attained NRA (age 62) in 2003 and is still working.

To do the AE increase, do I start at age 62 or do I start at age 65?

Same question if we do a suspension of benefits.

Thank you from the brain frozen.

Plan Trustee (and owner of a financial advisory firm) wants to give his employees investment advice. He wants to have one of his employees (a series 7 advisor) serve as the registered advisor. Is this possible? The payments would flow through the advisory firm itself but the employer would not take a cut, it would just be a pass through (because it has to go through the broker/dealer, etc).

It seems to me that the Schedule C instructions refer to employees who receive wages for their services to the Plan. That is what we are going for here.

Is this possible?

This has been discussed on these boards, but some conflicting opinions from elsewhere have made this.

IRC §4975 does not apply to an ERISA 403(b) plan, but ERISA 3(2) includes
403(b) plans. That, in turn, makes an ERISA 403(b) plan subject to the prohibited
transaction rules, but not under 4975, under ERISA 406.

Does this cause an ERISA 403(b) plan to be subject to an excise tax that requires Form 5330, thus completing the section of the form under 4975 and paying the 15% excise tax?

What determines whether a self employed is still in business if the employees have terminated?

Is filing a Schedule C with no income or expenses?

That is, when does the plan have to be terminated or can the plan remain "frozen" and if so, for how long??

I have a relatively unique question. I work for an employer who has a SIMPLE IRA plan and I also have a side business and generate around $30K per year in income.

My first question, which will affect the second, is can I participate in both. Can I have the SIMPLE (under my employer....I am only an employee, not an owner) and also a 401K?

If yes, what are my contribution limits? For example, could I make SIMPLE contributions and my full $18,000 in elective deferrals with the 401K?

Thanks in advance...I really appreciate it.

The Trustees mandate only a fixed dollar monthly payout option.

Q.: Under ERISA Is the Board of Trustees required to make available other payout options?

The plan has automatic enrollment with a 90 day opt out period. Employee was automatically enrolled either before or during her maternity leave. The 90 days have since passed. Employee wants to opt out and get her money back. Client wants to know if there is any extension for the 90 period. She says she "forgot" to let the employee know about the auto enrollment coming up.

The client has a defined benefit plan and is a S-Corp. So the calculated maximum deductible contribution is $300,000, the minimum required contribution is $100,000, and the net profit for 2014 is $200,000. So he made $300,000 into the plan and claimed a $100,000 in loss.

Is it allowed as a S-Corp to make the contribution more than the net profit?

it seems like this should be an easy question to answer, but I am having trouble finding anything. If employer failed ADP/ACP in 2012 and doesn't get it corrected until 2015, does the 5330 have to be filed for multiple years? I THINK the answer is that only 1 5330 is filed but because it is late, the IRS will probably assess penalties for late filing, but I can't find anything definitive on this.

Unlike the 5330s for late deferrals, which must be filed for each year until the deposit is made.... correct?

Thanks!!

Key employee wanted to take new loan ($50,000) in November 2014. He had a previously loan ($50,000) which he paid off in April 2014. When asked of the TPA the maximum loan amount, the prior 12 month loan balance was taken into consideration and the eligible loan amount was determined to be $10,000. When the year end work was done, it was determined that the plan sponsor approved a loan for $50,000.

What options does the participant/client now have other than defaulitng the loan, resulting in a deemed distribution? Under VCP, we can ask to default the loan in 2015, but the money is still due back to the plan. Is that correct?

A 75 year old, >5% owner took a partial in-service distribution from a balance forward profit sharing plan. The distribution was made during the last week of December 2014 and he deposited the check in an existing rollover IRA in January 2015. So it was basically in limbo as of 12/31/14 and not included in his balance of the plan or his IRA. Since the deposit wasn't in his IRA before 12/31/14 and therefore the rollover institution is not going to include it in his RMD calculation, should I include it in my calculation of his balance as of 12/31/14 even though my allocation report reflects that it had been distributed?