I have notified all of my clients that I am retiring and closing my TPA business by the end of this year. However, I have one client, with a 401k Safe Harbor plan who is also retiring and closing his practice as of January or February next year. I do not want to have to restate his plan for only two months of operation in 2016 because of the cost to him and the time/effort by me. Is there a tack-on amendment I can use for my EGTRRA prototype plan that will pass if the plan assets do not get 100% distributed before the April 2016 restatement deadline. Or is this cutting it too close for comfort?

We have clients who participate in minimum premium arrangements with insurers (which, in a nutshell, offer insured coverage but with cash-flow advantages of self-funding). At least one of the insurers has taken the position that a minimum premium arrangement is self-funded, rather than fully-insured, and as such, the insurer will not be reporting on Form 1095-B. Instead, the employer, as self-funded sponsor, should report on Part III of Form 1095-C. This was a surprise to clients and to me. I checked the final instructions and they don't appear to call out filing obligations for minimum premium arrangements or any "partial self-funding" situations. I would like to push back on the insurers so they do the reporting, but I'm not finding any clear authority. Thanks in advance if you have anything to share.

I saw where jpod asked a similar question back in 2013 (I was hoping he may have found an answer to it). My question is how to set up a 457f defined benefit that mimics a pension; multiplier x years of service x final pay. From what I have read, after the benefit is vested you would have to calculate the value of the future stream of income and the employee pay taxes on that amount. Each year this would be updated with the new accrual (e.g. The year applied to the multiplier and the increased salary the new multiplier is applied against) and the employee would pay taxes on the difference from the previous year?

What would be the best way to fund this type of DB plan? A Rabbi trust or just setting aside funds to payout a defined contribution on a vesting schedule while the employee is still employed seems fairly straight forward but how would that work for a DB plan? A rabbi trust seems questionable; what if it ran dry while the plan still had liabilities? Also, the organization would continue to have to pay to administer the plan long after the employee left. I guess this goes back to jpod's question back in 2013; could the organization purchase an unqualified annuity to pay out the defined benefit to the employee upon his retirement? Could that be setup in the original 457f agreement as an option? An annuity would seem like the best option for the employee that has left the organization (I.e. Change of heart; sticky fingers) and for the organization to remove the future liability.

Any good 457f plan administrators out there for a DB type of plan like this? The organization in question doesn't really have a lot of experience with 457f plans and would need to be as turn key as possible. Thanks for the help.

Employer knowing their plan would be top heavy for 2014, intended to implement safe harbor provisions for existing 401(k) starting 1/1/2015 providing instruction to service provider in early-December 2014. Document was restated and a 4% match with 100% vesting added in order to comply with Safe Harbor requirements. Many, but not all employees made changes to increase their deferrals before 1/1/2015. The plan has been operated according to Safe Harbor rules throughout 2015. However the prototype plan adoption agreement did not have the box for the Safe Harbor election checked when it was signed in 12/2014. How can the document be corrected to accurately show that it is a Safe Harbor plan? Much documented evidence of employer intent and instructions to document preparer going back over a year.

A 401k participant, who happens to also be a fiduciary, requested an in-service distribution after he turned 59 1/2. The plan administrator allowed the distribution, which the participant then rolled over to an IRA. The terms of the plan only allow in-service distributions upon turning 62 years of age.

Transaction occurred in 2014 and discovered in 2015. Amount was approximately $500,000, which represents about 25% of plan assets.

The operational failure seems easy enough to correct, but is this not also a prohibited transaction? Any suggestions for addressing the prohibited transaction? Apply for individual exemption? Would a retroactive plan amendment allowing the distribution be feasible? If the distribution was allowed under the terms of the plan, a statutory exemption appears to apply.

Has anyone reviewed the New Mexico Vaccine Purchasing Act? It purports to assess a fee upon ERISA group health plans, including self-funded plans for the cost of vaccines that the Department of Health purchases to have on hand for all children in New Mexico. The plans are invoiced for a proportionate cost of the vaccines provided to the health care providers. It seems to me that the law would be preempted with respect to such plans by ERISA but I'm hearing no discussion about it anywhere. The Act does not prevent the providers from then billing the plans for the immunizations, as well, creating duplicate payment scenario. In addition, there is a $500 per day penalty assessed for failing to pay an invoice.

Just curious if anyone has any thoughts...

Off ball question for anyone who has experienced this.

So we have a plan for the 12/31/2014 plan year that terminated paid out all of there assets. So a final Form 5500 is going to be filed. Sounds simple, here is where the tricky stuff happens.

1. Plan sponsor can no longer be located. How should the 5500 be handled to be filed with the DOL?

2. The counts in 2013 exceeded 120 for the first time. So technically they are going to need an audit. Once again keep in mind that the Plan Sponsor went AWOL and can not be located. So we are not sure how the Schedule H should be reflecting this accurately.

Any guidance or assistance would be greatly appreciated.

I hope BenefitsLink readers will help me crowdsource a little academic task.

The goal is to get a general sense, which at this stage may be anecdotal rather than scientific, of how many continuing-professional-education hours are required of each of several kinds of professionals.

Are actuaries, accountants, attorneys, enrolled agents, enrolled retirement plan agents, certified financial analysts, certified financial planners, and other professionals similar or different in what each license requires?

How many CPE hours? In what measurement period?

Is the CPE requirement a condition of a governmental license or privilege? Or is the CPE requirement a condition of using an association's trademark or certification mark?

I'll start: I must do 12 CLE hours a year. But this need not be evenly paced because there are three-year cycles, and there are limited carry-forwards of some credits not used in a previous cycle. This CLE requirement is a condition of my license to practice law in Pennsylvania.

So how many continuing-professional-education hours are required of you?

Is it possible to classify partners who retire early as terminated so that they may receive a distribution under their plan if they are receiving s-corp distributions but no w-2 wages?

Hi All,

My soon-to-be (marrying in 2016) minister hubby is facing some very large tax liabilities and has zero retirement savings (outside of Social Security), due to pathetic and egregious (if not downright “criminal”, in my opinion) tax return preparation and planning by his former tax preparer, bad and/or non-existent advice from his home church and somewhat willful ignorance of his own financial and tax situation.

I am involved because A) I realized the first time I saw his tax return that something was very wrong and started asking questions B) am in the accounting field (not a preparer or CPA, though) and love it so I understand all of “this” much more than he does and, C) am a bit panicked at the thought of having my modest retirement savings the source of support for both of us in the not-so-distant future (he is 59).

He/we do now have what I believe to be quite adequate tax representation but I would also like to get input from those of you who seem to know what you're talking about and, with the October tax deadline looming, his CPA is somewhat unavailable.

For now, we have increased his withholdings substantially and are about to open a 403(b)9 in order to defer income to decrease his tax liability. My questions regarding the TPA are probably going to be another post.

He makes approximately $30,000 in salary and $20,000 via housing allowance. My fantasy is that we can defer the majority of his compensation to the 403b plan (we can both live off of my income).

If I understand correctly, income deferred into a 403b is exempt from both income and SE taxes. Am I correct?

If I understand correctly his housing allowance cannot be deferred to a 403b because it is not considered taxable income (even though he pays SE tax on it). Am I correct?

If he cannot defer the housing allowance, can his church contribute into the 403b instead of paying the housing allowance (which would reduce the SE tax)?

If the church can contribute:

Would that make it impossible for the retirement distributions be allocated to housing expense?

If the church cannot contribute:

Should we request that the church reduce his housing allowance and increase his salary in next year's contract in order to defer a larger amount of income?

By the way, no, he did not file form 4361 because he was not aware of it until it was too late (and, likely wouldn't have filed it anyway because he doesn't really feel “right” about it).

My apologies for the long post and my thanks in advance for any input you have.

~Stephanie

ETA clarification.

We know it is easy to have a safe harbor 401(k) plan with SHNEC only to non-keys. Then in a good year a 3% NEC can be given just to the keys resulting in all participants getting a 3% contribution.

Does a safe harbor match work the same way? In other words can just non-keys get a safe harbor match and then in a good year keys only get a discretionary match?

Our document seems to allow this.

Thanks.

I have a situation where an employer failed ADP and ACP testing for 2012 and 2013. In both cases they refunded/forfeited in the 2/1-2 correction period. It turns out that the data relied on for those tests was incomplete. After retesting was performed, it was determined that certain HCEs are (i) due additional refunds for 2012, and (ii) were refunded too much for 2013.

I'm clear on my options for correcting where additional refunds are due, but I'm not as clear on correction where too much was refunded. I found a few threads here that suggest I need to treat the excess refund as an overpayment (under EPCRS), try to collect it back from the HCE for deposit into the HCE's account, and if the HCE doesn't agree, so be it (ordinarily, the sponsor has to make the plan whole for any unreturned overpayments, but since the overpayment would have been returned to the HCE's account, that would be a true windfall). Another poster mentioned that the IRS indicated at an ASPPA conference that the HCE should have to pay the 10% early withdrawal penalty if the excess refund isn't returned (assuming the excess refund was already reported on the HCE's W-2, I guess that means amending the W-2 and reporting the excess refund on 1099-R?).

Does anyone have any other thoughts for correcting the excess refunds? For example, can the employer offset the 2012 refunds by the amount of any 2013 excess refunds due to the HCE? I am inclined to self-correct, but the employer may ultimately go the VCP route to ask for an excise tax waiver.

Thanks in advance for any input.

Hoping someone can enlighten me

Plan is Safe Harbor Non-Elective 3%.(SHNE)

Age and service waived as of 1/1 for NON-seasonal employees.

Seasonal Employees are always excluded.

Eligibility is 21 and 1 year of service (1000 hours in 12 month period) with dual entry 1/1 and 7/1

I'm being told that as long as the Plan can pass coverage then the Seasonal employees will NOT receive a SHNE contribution even if they have met the 21/1 year and entry requirements. Something doesn't seem right - isn't this the very definition of discriminatory? The Seasonal people are not covered under a different Plan.

How does one go about defining Seasonal? Do you write a very specific definition into your Plan Documents? The client grows different crops and there are 3 seasons. Can you exclude one season (say Summer season) and not Fall and Spring?

We've been using the 1984 UP life table in our calculations. (Well, in Relius)

Given that many times most of the people I'm testing weren't even born by 1984, should we be using a more recent table?

What you you guys use?

Imagine an automatic-contribution arrangement under a governmental (non-ERISA) plan that does not provide a permissible withdrawal and so need not be an eligible automatic contribution arrangement. (The plan allows only salary-reduction contributions; there is no nonelective or matching contribution.)

Imagine also that the State statute that enables the plan and its automatic-contribution arrangement does not require an annual notice.

Even if no law requires it, should the plan's administrator do annual notices?

What arguments might one make for omitting annual notices?

have a client that initially wanted to adopt a profit sharing plan effective 1/1/15 for the entire year of 2015. They now want to adopt the plan as a 401(k) with a safe harbor match. They will also make a 10% profit sharing contribution for 2015.

I believe as long as the plan is adopted by October 1, we can provide the safe harbor notice on that day as well as salary deferral elections etc.

Question: clearly when we calculate the profit sharing contribution we can use full year salary. When we calculate the safe harbor match for 2015 can we also use full year compensation or are we limited to only the compensation between 10/1/15 and 12/31/15?

Thanks a million.

Anyone have a problem with a SIMPLE Plan sponsor setting up a 0% money purchase plan to allow the owner to do a rollover and take a loan? Yes, the employees can make a rollover contribution as well.

Is there a table showing the maximum monthly benefit limits for older ages, for example, ages 66 to 80?

Profit sharing plan with 2 year eligibility. Jan 1 and July 1 entry

DOH 5/1/2013

Eligible 7/1/2015

Terminates 7/25/2015

If employer makes 2015 PS contribution, is employee a contribution?

If so, based on what comp?

Plan is top heavy but that requires end of year employment.

Can you confirm that for a new plan, there is no requirement to look to participant counts on the last day of the plan year as opposed to the first (i.e., similar to top-heavy).

I am pretty sure there is not but want to make sure I am in good company...