I have a client who failed to include a non-cash item (trip) in the comp of several employees and therefore said employees did not have the oppty to defer on those bonuses. The plan uses the 415 safe harbor of comp with no exclusion of bonus.

I believe the only fix is to treat this as a missed deferral oppty and have the sponsor make the corrective contribution. (assuming employees aren't already maxed out, comp isn't above comp limit etc).

Any other creative suggestions?

This issue is not limited to cross tested plans, but I had to post this somewhere.

Discretionary profit sharing plan. Employer doesn't want to use the standard "last day rule" as a condition to receiving an allocation. It wants to have a rule that says the participant must be employed on the date that annual year-end bonuses are paid in December. This date is in mid-December, but it can vary by several days. In the employer's mind it feels that if an employer is entitled to a cash bonus than he should be entitled to a profit sharing contribution, even if he quits the day after. Anyone see anything wrong with the fact that the date is not a definite date but one that is subject to the control of the employer?

Do the same rules apply as in 401k plans with respect to 457(b) deferrals from severance? Or would it be permitted?

A participant chose to enroll in the plan 3 years ago. Let's say they chose to defer 4% of comp. From my understanding, a QNEC of 50% of that (2% of comp) needs to be made by the employer for these 3 years as well as any missed match/profit sharing.

My questions is this: the IRS states that this amount must be adjusted for the earnings. How do you calculate the earnings? There are two possible scenarios for this plan:

1) Use the earnings for the fully managed model the participant selected and calculate the returns for each contribution. This will take significant amount of work on the part of the TPA.

2) Use the VFCP Calculator for each pay-date. This will be a lot simpler to calculate.

Is there any guidance from the IRS as to which method is correct? What do you think is the correct method?

We are a large not-for-profit sponsoring 4 retirement plans. We have three vendors, 50+ funds, and no central recordkeeping system. We are currently using TIAA-CREF's Disclosure Assist product and are not satisfied. It is cumbersome to work with, unable to be customized for our needs, and results in a disclosure document in which is very hard for participants to find the information they need.

Can anyone recommend another product which would allow us to consolidate the information from three vendors into one document, and mail or email over 52,000 disclosures?

Participant terminated employment with a defaulted loan.

It is my understanding that if he does not request a distribution the amount of the outstanding loan is a "deemed distribution" and he includes the amount as income and is subject to 20% withholding and any 1099R would include the full amount of the outstanding loan.

At the time he requests a payout, the outstanding balance would be treated as an offset distribution and would be netted out of any actual distribution.

I just got off the phone with one of the fund companies that mentioned that they would give the participant a 1099 for the withholding only.

This just does not make sense.

The owner is over age 50 and wants to max himself out. He deferred only $4,000 for the year. Can he do a profit sharing contribution to himself of $53,000 and re-characterize the $4,000 deferral as catch up?

5558 extension on new calendar year plan (2014 first year) was filed back in late June.

The box which indicates "check this box if you are requesting an extension of time on line 2 to the the first Form 5500 series return/report for the plan listed....etc." was inadvertently not checked.

Would others go ahead and file another extension and check the box?

My basic question is: Is this type of transaction permissible?

From what I've read, if pension plan assets are transferred to a non-pension plan, the distribution restrictions must continue to apply. I do not see how that can be possible given the fact that qualified plan money is transferred to an IRA in which the participant has access to the funds. Is it possible for a SEP to be written to retain the character of the transferor plan?

A one part plan owns a farm. The plan, which used to be 2 participants, now is just one and the plan files a shortened 5500SF. I'm trying to find up the code pertaining to annual valuations. Are they required in a 1 part plan?

My plan has AUL group annuity and they furnished the Schedule A and D information. I cannot remember whether I have to file those schedules with the SF form - I know that on the SF form Part V- 10e asks about commissions. If I fill that in, is the Schedule A unnecessary? D? Thanks.

Company A is purchasing the assets of Company B. Company B's employees will be employed by Company A and be eligible to participate in Company A's 401(k) Plan.

Company B's plan currently permits loans.

I understand that loans can be rolled from one plan to another.

However Company A's plan currently does not permit loans.

Can Company A amend their plan to allow participant loans only for those employees coming over as part of the acquision? They do not want to permit new loans to anyone.

Thanks.

Actuary is saying they don't, and while I make it a point not to argue with EA's 'cause I don't know much about DB plans, I just wondered if y'all agree?

Hello,

Am in the process of filing this form based on information from Fidelity forms.

Fidelity provides 5 pieces of information:

(1) Jan 1, 2014 balance - Goes on Line 7(a) column (a)

(2) Dec 31, 2014 balance - Goes on Line 7(a) column (b)

(3) Investment Earnings - Where do I enter this? Line 8(b)? Which column (a) or (b)?

(4) Fees Deducted - Again where do I enter this?

(5) Cash Contributions - seems that this will go on line 8(a)(1) and 8(a)(2) but WHICH column (a) OR (b) should I enter this.

Thank you for your assistance.

Owner of a company with a large 401k plan was just convicted of many counts, including paying phony compensation to brother/sister/parents/uncle/daughter/cousins etc., many of whom never worked, or apparently never worked legitimate hours.

I'm not even sure where to begin to tackle this, but initially my question is, what does this mean for contributions tied to such phony compensation and how far back would we have to track this and take action. Also, what if owner appeals would this all be on hold?

It appears plan administrators are looking out for best interest of the plan.

A terminated plan participant must receive an RMD from the 401k plan by April 1, 2016. Each year the plan has mailed the terminated plan participant distribution paperwork. Because we were aware that the terminated participant must receive a minimum required distribution, we mailed the RMD notice to the participant Certified/Return Receipt with Address Correction Requested. We received notice from the post office that the participant had moved to another state and our RMD notice package has been returned to us because the participant would not sign for the package after two delivery attempts. We are concerned about our liability if we just go ahead and issue the RMD payment from the plan to the participant and someone other than the participant cashes it. Are there any other precautions that we can take before we issue the check to her at her new address? We have researched her name online and all the online people search services still show her old address. Any recommendations?

If a company adopts a 401(k) plan midyear retroactively to the beginning of the year and an employee met the eligibility requirements at the beginning of the year, but terminates employment prior to the adoption date, must he be included in the 401(a)(4) testing? Must he receive the 3% non-elective safe harbor contribution?

I have a plan that had missed deferral opportunity corrections done for the 2014 plan year (they made the 50% correction and lost earnings). The participants deferral was not set up timely on payroll. Should the amounts be reported on the 5500? Or no because its not as if they were withheld and not submitted. What's the best way to do this?

Let's say a participant has $1,000 Roth basis in the plan. The assets subsequently appreciate to $2,000, so there is $1,000 gain that's taxable (the distribution is not qualified). Let's say the TPA firm charges $50 to process the distribution. How would that $50 affect the gain? I see 2 possible scenarios:

1) The distribution fee of $50 reduces gain by $50 and the total gain is $950, which is also the taxable amount.

2) The distribution fee applies proportionately to the basis and to the gain. One half ($25) of the fee applies to Roth basis and the other half (also $25) applies to the gain. The gain is thereby reduced to $975.

Which of these approaches seem right to you? Is there any guidance from IRS as to which approach should be used?

We are a TPA firm who has subscribed to RIA's Pension & Benefits Week for many years. Several years ago we compared it to CCH's offering and felt that RIA was a little better as far as weekly newsletters go. Are there any similar publications that anyone can recommend?