Participant defaulted on a loan in 2014. Never made a single payment to the loan. A 1099-R was issued in 2014. Plan allows for one loan. Only source of money in plan is Salary Deferral.

Participant took a new loan in 2015. Is this allowed?

FYI: Partcipant has not met any requirements for a distributable event.

I'm a bit rusty on the separate Plans issue...

company has 365 nHces and 38 Hces

division 1 has 208 nHces and 30 Hces

division 2 has 157 nHces and 8 Hces

division 1 = 208/365 / 30/38 = 72.18%

division 2 = 157/365 / 8/38 = 204.32%

so looks like they pass RPT -- can each company have a completely different 401k Plan [with no non-elective]...e.g., division 1 have a 100% 1st 6% SH

and division 2 have non-SH 100% first 3%

my recall says yes...but if they add NEC, then ABT must be passed...

The headcounts are after 1 yr/age 21 application -- I assume that's OK.

I'd appreciate any thoughts...

Employer A is selling (stock sale) a number of subsidiaries to an unrelated buyer. The buyer will assume sponsorship of the 401(k) plan in place for employees of the subsidiaries. Employer A typically makes a discretionary contribution based on a % of compensation for participants who are employed on the last day of the plan year. the plan has a calendar-year plan year. The sale is expected to close on 9/30.

Due to the sale, Employer A would like to amend the Plan prior to the sale to provide the discretionary contribution to participants who are employed as of the closing date of the sale (9/30). The employees are being hired by the Buyer and will continue to participate in the 401(k) plan after the sale. The employer would like to make the contribution based on 100% compensation earned through the first 9 months of the plan year.

Under Treas. Reg. Section 1.401(a)(4)-2(b)(2), employer A can satisfy a safe harbor under an allocation formula that allocates to each participant the same percentage of "plan year compensation". Under Treas.Reg. Section 1.401(a)(4)-2(b)(4)(iv), the allocation formula will not fail to be a safe harbor allocation formula if the allocation formula is limited to a "maximum percentage of plan year compensation."

Question: Can the employer make the contribution based on 100% of compensation for the first 8 months of the plan year? Or must the employer make a contribution based on 75% of compensation for the first 8 months?

The concern is that an employee who terminates right after the closing date would receive an allocation based on 100% of his/her plan year compensation, whereas an employee who works until year-end will only receive an allocation based on 75% of his/her plan year compensation.

Any thoughts are welcome!

A 401(k) plan has audit issues going back several years. DOL suggested terminating current plan and starting clean with a new 401(k). We feel the successor plan rules would require deferrals to be transferred/merged into new 401(k) and not distributed.

Would the problems associated with the old plan also transfer/merge to the new plan? These are not problems with the deferrals themselves but rather other plan issues.

Thanks.

Participants have been making Roth deferrals for several years, but document provider was never advised to add the provision. Is there any way to correct?

Thank you for any thoughts.

We have rehired some retirees on a part-time basis. The retirees are receiving an annuity from our defined benefit plan but are no longer eligible to accrue additional benefits under that plan. These employees also will not have deductions taken out of their pay for social security.

Must we take the mandatory 7.5% out of their pay or can we exclude these rehired retirees from our FICA Alternative plan.

Thank you.

We have a large plan that we were under the assumption transferred to a new provider 3/1/15. Come to discover the plan termed and merged to a newly formed plan effective 3/1/15 and came to the conclusion we would be responsible to prepare the final 2015 Form 5500. Auditor is telling us and the client that the plan may defer the 2014 audited financial statements and file with the 2015 short plan year utilizing Line 3d on SchedH. My understanding is this maybe used if the first of two consecutive years is a short year end, not the second. Of course our software wont even allow a large filing be submitted without an audit report.

Does any one have a recommendation? The only one I have is so old I'm looking for something more current for someone just getting into the business.

I used to have a handy-dandy spreadsheet that helped calcuate self-employment comp given net sched c or k-1 income and the rest of the ER cotnributions.

Does anyone have one handy for 2015 they would like to share?

Participant wants to purchase rental property as an investment in his self-directed 401(k) account.

Just throwing this out there, but does anyone suggest any good sources that cover the issues related to this sort of transaction? Any books, articles, IRS guidance, etc., that talk about the aspects of this transaction as the property is brought in the trust, issues while it is held in the Plan trust, issues that arise when the property is disposed by the trust, how the property is valued for ERISA and 5500 purposes, how the property can/cannot be used by the participant, etc.?

Thanks in advance.

Plan sponsor is a government contractor with 2 contracts in different states requiring 300 employees/participants each.

Sponsor loses one contract and terminates those 300 participants on 8/1/2015, easy conclusion that we have a partial plan termination.

Current IRS position seems to be we have to vest all participants who terminated (or will terminate) in 2015 whether they terminated voluntarily or not and whether they were associated with the lost contract or not.

Seems to be a gross expansion of the rationale behind the partial termination rule.

Anybody support a position that in addition to the 300 participants who terminated 8/1/2015 we only have to vest the participants that worked on the lost contract and were involuntarily terminated this year?

Planning pointer: if you have large government contracts that are subject to being lost maybe put in separate plans for each contract?

I have a solo 401k and a SEP IRA with a prototype plan with schwab (so I can use both at the same time) - I'm a sole proprietor so no employees.

I read a lot about there being no advantage to having both but isn't it the case that if I wanted roth contributions I could contribute to a sep IRA and then roll it over into a roth IRA? Sure I could have a roth 401k but that has more restrictions - mainly the inability to withdraw contributions early unless a very small number of scenarios are met.

Is there anything stopping me putting my employer contributions into the SEP IRA and rolling over to a Roth IRA each year (or less frequently) and then contributing the employee portion to the solo 401k?

Thank you

I am not sure how to interpret the VCP fee chart. The plan has 52 participants.

There is only 1 participant affected. More than 5% owner, still working, age 80. Plan has never distributed any RMDs.

Is the fee $2,500 PLUS $500 for the 401(a)(9) failure? Or is it just $500?

The title basically says it all. Can a plan that does not allow Roth Deferrals allow Roth Rollover into the plan or is that not permitted?

High blood pressure is one of the most prevalent health problems in America. However, I have determined that the main cause of this epidemic is NOT, in fact, due to obesity, sodium, etc.

No, the real problem is that when you have an appointment at the doctor’s office at a given time, you are invariably ushered in late. This, in and of itself, is annoying but not unduly so. Where it gets bad is that you are then ushered into an examination room, so you think, “Aha, finally getting somewhere.” Instead, you then wait for anywhere from 45 minutes to 6 months before the doctor actually comes in for your SCHEDULED appointment. At this point, you are so mad that your blood pressure is likely to show that a stroke is imminent.

So, the cure is simple, and will save Medicare billions. Instead of medication, just make sure the damned physicians get you in on time!

I have seen some variations of this topic, but not my specific question. I have a client that is a partnership. The partners receive draws (at same time as the other employees' pay period) of which they each elect to defer a flat dollar of each draw. No problems there. The plan also has a discretionary match determined per pay. They calculate the match off the draw amount for the partners which I understand isn't technically "compensation". Each of the partners' actual plan compensation at year end (based off their K-1 self-employed income) is higher than their total draws for the year. So theoretically they could have received more match. Are they REQUIRED to do a true-up depositing the additional funds or are they permitted to just leave what was deposited throughout the year? I know if they deferred or match TOO MUCH, that would have to be corrected. But I wasn't sure about the other way around - if it was truly required to deposit additional money. In this particular instance, the partners would prefer not to deposit the extra $ to their own accounts.

For the year in which a sole proprietor dies, can the surviving spouse and/or executor of the estate step in and make a SEP contribution on behalf of the deceased owner/participant based on earned income for that year? I think the answer is yes, because the SEP is an employer-sponsored plan, and the spouse/executor is acting to wind down the business, which may include making SEP contributions.

I also have the same question regarding a SIMPLE Plan. Here, I think the answer is no, since the election to defer would have to be made by the owner/participant, and not by a third-party.

Dentist client is taking RMDs from the Plan. The Plan holds 17 Krugerrands (market valued) and "100 Silver Dollars" (valued at spot silver prices).

If Dentist were to take distribution of this gold and silver as part of his RMD, the remaining assets could be rolled to a generic IRA and the Plan terminated.

The "market value" is less than the RMD amount.

The question is "How do we establish that the assets have changed hands from the Plan to the Participant?" Appraisal? 1099-R filing?. I'd like to make sure the Dentist is credited with taking the full amount of the RMD (some cash plus the gold and silver).

Let's say the plan is cross-tested and the owners want to max out and give themselves the profit sharing contribution that will bring them to the 415 limit. The plan gives a 3% Safe Harbor non-elective contribution as well.

However, there is an allocation condition (have to be employed on last day of the plan year to receive an allocation) on the regular profit sharing contribution. A few people were terminated during the year and while they receive the Safe Harbor non-elective, they are not entitled to the regular profit sharing because they didn't meet the allocation condition. Because they don't receive the regular profit sharing contribution, the plan fails to allocate the minimum gateway.

My question is this: can the document be retroactively amended in 2015 in order to remove the allocation condition and allow all the employees to receive the regular profit sharing contribution?

Can you set up a profit sharing only plan (not 401k) in the same year that a SIMPLE plan exists? I know you can't have a 401k and SIMPLE in the same year but I was wondering if it made a difference if the second plan was employer only contributions?

Thanks