I've spent many hours researching online and this seems like the most knowledgeable forum around for retirement account issues.

- age 33, want to retire at 55

- sole owner of a consulting biz/LLC earning 300k/year for the next 5 years at least, taxed as S corp, no employees

- may join another totally separate company next year as full time employee (wouldn't impact consulting biz) and would be eligible for their 401k plan

If the goal is maximum tax efficiency, what's the best combination of accounts to achieve this? From what I've read I believe it's a combination of solo 401k + DB plan. How would the #s work on that, assuming the first year DB contribution was something like 40k? Do I need to pay myself 100% of comp in salary (versus distribution) in order to max out? I talked to a couple different CPAs and got differing answers, one said that the two accounts are aggregated together in terms of contribution limits and the other disagreed; it's clear that even very qualified people are confused by some of this material.

wasn't sure where to post this question and realize client needs to consult with counsel. this is more for my own curiosity.

client is removing a trustee from the Plan who is an employee but not an owner. The employee still works for the company. the question asked is what liability would this employee have in the future if litigation is brought against the Plan and/or Trustees that might include the period of time that the employee was a Trustee of the Plan? Employee is not the sole Trustee.

Would ERISA's fiduciary six year statute of limitations apply?

I have a seperate interest DRO for a DB plan that allows an alternate payee to commence benefits any time after the participant's earliest retirement date.

I was under the impresssion that alternate payees had to commence no later than a participant, as QDROs are commonly drafted to include that language, but I could not find a citation to back that up. This is not an RMD issue.

Any thoughts?

The auditor is insisting we report the corrective distributions (for the 2014 plan year, corrected on 3/1/2015) on the Schedule H in the same manner they are treating these distributions in their financial statement. Specifically, the auditor wants us to -

1. Report these corrective distributions as a payable at 12/31/14 for excess contributions paid in the following year. We are to list them on line 1j(b), Other liabilities.

2. Reduce the Participant contributions reported on line 2a(1)(B) by the amount of these corrective distributions because their best practice is to reduce employee contributions because these were not eligible contributions. The audior says these contributions are required to be remitted back to participants and therefore were not actual contributions in 2014.

3. Not report the corrective distributions on line 2f, on either the 2014 or 2015 Schedule H, because the participant contributions are being reduced by this amount. The auditor will add a footnote to the financial statement describing this activity.

I know the Generally Accepted Accounting Principles (GAAP) the auditor uses for the financial statement wants the corrective distributions handled this way, but I never heard of the Schedule H being completed in this manner.

Has anyone come across this situation this year? If you have, how did you handle it with the auditor and the client?

Not sure this is the right board to post this question, but would appreciate it if someone could provide the names of 4 or 5 insurance companies who might be interested in selling us annuities for our current DB plan retirees.

Is it safe to assume that the giant insurance companies would not be interested in what is probably a $2 to $3 million deal?

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.