Trying to send off our Extensions Form 5558 via UPS for proof of delivery today and the IRS address on the form is simply

Department of the Treasury
IRS
Ogden, UT 84201-0045

No street address.

Can we use the 5500-EZ filing address for private delivery service?

In determining if a profit sharing plan for an association is top-heavy, is an officer of the association who earned over $165,000 last year a key employee? Obviously, there are no key employees due to stock ownership but is an officer/participant in an association a key employee? I have found references on line that state that the top-heavy rules do not apply to a plan of an association but that statement seems to contradict the Treas. Reg. § 1.416–1, T–15.

T–15 Q. For purposes of section 416, do organizations other than corporations have officers? A. Yes. For purposes of the top-heavy rules, sole proprietorships, partnerships, associations, trusts, and labor organizations may have officers. This rule is effective for purposes of determining whether a plan is top-heavy for plan years which begin after February 28, 1985.

I've done some research on this matter, but received conflicting information.

Let's say that the plan's effective date of termination is 6/30/2014. However, the last distribution from the plan actually takes place on 12/31/2014.

For 415 limit ($52,000 plus catch up), as I understand it, the limit is pro-rated and is only $26,000, because the plan terminated half way through the year.

1) Is that a correct assumption?

2) As I understand it, the catch up limit is not pro-rated. Is that correct?

Is the 401(a)17 limit ($260,000 for 2014) pro-rated? I've read that there are 2 ways to interpret this limit. It could be affected by the effective termination date (in which case, it will be decreased to $130,000) or the actual date of the final distribution (in which case it's unaffected). Let's say the plan document offers no guidance on this, can the plan use either way to test the plan?

Finally, let's say the termination date and actual date of final distribution were 6/15/2014 and 12/15/2014 respectively. Would that have any effect on the way the limits are pro-rated. Would you simply take number of days divided by 365 or not?

We are taking over a client that is currently funding a 5% non-elective safe harbor. Can they reduce this to 3% mid-year without having to do ADP/ACP testing?

I've read a few articles and there is one obvious question that I have not seen answered - will the sponsors be required to restate their documents periodically? I sure hope so as I have dealt with plans written in the 90's with 35 amendments attached (and yes I am exaggerating).

If a "Critical and Declining" plan elects to lower accrued benefits, how does that impact a contributing employer's withdrawal liability? Is that run through the calculation like any other "gain"?

In other words, are there any special rules that exempt the impact of the reduction from the withdrawal calculation?

Does anyone have any guidance on what to tell these compliance departments at the wire houses for which boxes to check regarding type of account?

We use a Rabbi Trusts. Of course there is no option for Rabbi Trust on the forms, not even a grantor trust. Should it be just a corporate account? Butt hat would seem to negate the purpose of the Rabbi Trust because then the corporation would control the accounts and not the Trustee...

Wondered if anyone had any direct experience with a VCP submission on a 403(b) plan, where the submission proposed no correction for minimal benefits that do not exceed a certain threshold. For example - a 403(b) plan incorrectly excluded certain part time employees. Many of these people worked there only a few days or weeks, and terminated employment. A corrective contribution might be only a few dollars, and the cost of locating, providing, and processing would be prohibitive.

In such a situation, have you proposed no correction for benefits not to exceed, say, $25.00 or some other cutoff point, and if so, with what results?

Also, I presume if you must make such payments, the check would be made out directly to the former employee, (similar to what is allowed for "orphan" contracts) as an annuity provider wouldn't even accept such payments for a non-active employee.

We are trying to determine the following:

A S-Corp owned by a family , Father, Mother, 2 sons, 2 daughters - they all work for the company

Father owns 10% of stock - controls 100% of voting stock

Family Trust A owns 22.5%

Family Trust B owns 22.5%

Family Trust C owns 22.5%

Family Trust D owns 22.5%

The beneficiaries of the trusts are the respective children.

Are the spouses of the beneficiary children Key EE's?

We have never seen this before.

I ran into an interesting problem today and was hoping for some guidance, as my research has come up a bit gray.

New safe harbor plan for 2015 with a former HCE/owner who switched to part-time, working under 500 hours the past 5+ years. The goal is the not have the former HCE eligible to participate without a direct exclusion.

I understand that for 5 breaks in service, they (seemingly) have to be a participant at some point. Would the one year rule negate the prior eligibility, or does he have to be a "participant" at some point for that, as well?

Thanks. If more info is needed just let me know.

I am wondering if it is known for certain whether all partnership interests(limited or general) are to be counted for scheduled I item 3(a) or perhaps just the non publicly traded partnership interests?

I do not think I have a good handle on EOY Valuations.

Facts:

CB plan established 1/ 1/2014

EOY Valn 12/31/2014 (also first plan year)

4 participants (2HCEs 2NHCEs)

1. Funding Target = $ 0
2. Target Normal Cost = $ 47,766 = MRC
3. Assets 1/ 1/2014 = $0; Assets 12/31/2014 = $55,000 (all receivable and for 2014 plan year) and at Market Value
4. Employer Contributions totaled $55,000 deposited in Jan and Feb 2015
5. Discounted Employer Contributions = $ 54,727
6. Increase in Prefunding Balance = $ 6,961 (i.e. $54,727-$47,766)

Q1. What is FTAP and AFTAP at 12/31/2014?

A1. 100.00% (which is $0 FT divided by $0 assets since contributions are all receivable)

A2. 114.57% (which is $ 54,727 discounted contributions divided by $ 47,766 TNC)

A3. 100.00% (which is ($ 54,727 - $6,961) divided by $47,766)

Is this the percentage that is entered in line 14 and 15 of 2014 Sch SB? My initial thought is 114.57%.

Q2. My reading of the 2014 Sch SB instructions lead me to believe that line 2a and 2b (Asset Values) are $0. Item 3 Funding Target is also $0. Is this correct?

Employer is a general partnership. There are four unrelated general partners, each holding 25% interest in the employer, so none of the general partners are members of the same controlled group as the employer.

If employer withdraws from a multiemployer pension plan, I understand that each general partner can be held jointly/severally liable for the entire withdrawal liability (as applied under state law). But, is the controlled group of a general partner also on the hook if the general partner can't pay? For example, assume general partner is corporation x, which is wholly owned by corporation y. Can the plan or the PBGC go after corporation y?

My gut sense is no, since neither corporation y nor the general partner are in the same controlled group as the employer. But, I haven't found any cases on point. I would appreciate any thoughts. Thanks!

Small defined benefit plan covering a business owner and 3 employees. The business owner has a higher benefit than employees in the DB and the employees get a 15% of salary contribution in the DC plan.

We don't have any other plans with life insurance but this one does have a policy on the business owner. The employees will need to have comparable policies (for example if the business owner has a policy of 50 times monthly benefit, employees need the same). The problem is the employees have smaller benefits in the DB. I think the employees will then need comparable coverage in the DC plan.

The insurance agent is telling me his home office legal department claims that employees can waive insurance in the DC plan. I know this is probably the case for a DC plan by itself but don't think it is possible in this case.

Any thoughts?

Thanks.

I've got a plan that erroneously excluded a total of three employees in 2014 and one in 2015. It looks like the employer can use the new corrections procedure in Rev. Proc. 2015-28 (requiring only a 25% QNEC instead of a 50% QNEC to make up for the lost deferral opportunity). For 2014, it's fairly clear how this is to be done. However, I've got questions with respect to 2015:

1. Is there a missed deferral opportunity at all for 2015? The Rev. Proc. says you've got to give the employee a notice saying that he or she can make up the missed deferrals, subject to the 402(g) limits. Since we're only halfway through the year, the employee should be able to defer the full 402(g) amount in the second half of the year. At the same time, the procedures are different if the error is discovered within 3 months than if it is discovered thereafter, so presumably some correction is required if the error goes on for more than 3 months but still within the same year?
2. If the employer has to make a QNEC for 2015, how is it calculated? The QNEC is based on the ADP of the HCE or NHCE group. But presumably, the ADP can't be calculated until after the end of 2015. Does the employer have to defer the contribution until after 2015 ends, or is there some way to determine the amount of the QNEC before that time?
3. The notice to the employee must include "A statement that appropriate amounts have begun to be deducted from compensation and contributed to the plan (or that appropriate deductions and contributions will begin shortly)." What does this mean in the context of employee elective deferrals? Presumably, no amounts should be deducted from compensation until and unless the employee makes a deferral election.

I've got a plan that erroneously excluded a total of three employees in 2014 and one in 2015. It looks like the employer can use the new corrections procedure in Rev. Proc. 2015-28 (requiring only a 25% QNEC instead of a 50% QNEC to make up for the lost deferral opportunity). For 2014, it's fairly clear how this is to be done. However, I've got questions with respect to 2015:

1. Is there a missed deferral opportunity at all for 2015? The Rev. Proc. says you've got to give the employee a notice saying that he or she can make up the missed deferrals, subject to the 402(g) limits. Since we're only halfway through the year, the employee should be able to defer the full 402(g) amount in the second half of the year. At the same time, the procedures are different if the error is discovered within 3 months than if it is discovered thereafter, so presumably some correction is required if the error goes on for more than 3 months but still within the same year?
2. If the employer has to make a QNEC for 2015, how is it calculated? The QNEC is based on the ADP of the HCE or NHCE group. But presumably, the ADP can't be calculated until after the end of 2015. Does the employer have to defer the contribution until after 2015 ends, or is there some way to determine the amount of the QNEC before that time?
3. The notice to the employee must include "A statement that appropriate amounts have begun to be deducted from compensation and contributed to the plan (or that appropriate deductions and contributions will begin shortly)." What does this mean in the context of employee elective deferrals? Presumably, no amounts should be deducted from compensation until and unless the employee makes a deferral election.

This plan is a 401k (not a safe harbor). The plan document is being restated in July 2015 and the plan sponsor wants to change from an Integrated profit sharing contribution to a New Comparability contribution effective 1/1/2015. Would this cut back the participant's benefits and rights? I read that the new formula needs to be equal to or better than the original allocation when amending back to the first of the current year. The plan sponsor did not make an employer contribution in the prior year. Would the employees need to receive at least 5.7% since that was the integrated formula?

So the former owner of the company sold all shares to the ESOP. So he got paid for those shares in that transaction. However, now he is also a Plan participant. He would then arguably also get those shares (well at least some) allocated to his Plan account. Shares are allocated based on compensation, and since he's paid the highest, he gets the biggest peice of the shares released each year. Is this allowed? Somehow this seems wrong....

Company neglected to take loan repayments from participant's paycheck. Loan taken in 2013. Investment house defaulted loan in 2014 and a 1099-R was issued in 2015 for 2014 for the loan amount. Is there any way to have the 1099-R reversed and the loan paid back now? Participant is still employed. Can this be corrected through the self-correction program?

If an employer submits a negative contribution in 2014, can they resubmit 2014 deferrals to be reapplied back into the participant's account? can you do this as a QNEC?