Plan only provides for one of the 409A CIC options: a "change in ownership of a substantial portion of corporate assets." Under the Regs this means the date on which a person or group of people acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by that person or group of people) assets from the corporation that have a total gross FMV equal to or more than 40% of the total gross FMV of all assets of the corporation immediately before such acquisition.

Under the terms of their plan, CIC accelerates vesting and is also a payment trigger.

A 58% owner wants to leave the company in 2 years and have the other owners absorb his 58%. If the 58% owner transferred half (29%) in one 12-month period and the remaining half (29%) in the subsequent 12-month period, does it circumvent the CIC trigger? Company does not want the transfer from the 58% owner to trigger a CIC.

Can a participant rollover funds from a 403(b)(7) into a 401(k)? Any other helpful information on 403(b)(7) would be appreciated!

Any problems or particular concerns with a 401(k) Plan amending the plan to increase the cash-out threshold from $1,000 to $5,000 (along with adopting appropriate automatic IRA rollover procedures) and then cashing out all the former employees with balances between $1k and $5k? We've been told that it is fine to apply the new limit prospectively to all accounts (including those accounts below $5k that have been in the plan for a number of years because of the old threshold). Just wanted to be sure there is no protected benefit or rights associated with the old limit. Thanks.

Plan requires all employer match contributions be made to the ESOP. Participants can contribute pre and after tax to the core investments. The participant has contributed a total of $64,000 after tax to his account. Participant is retiring and will take a distribution. Shares will be transferred to the participant. Cost Basis for the Shareis $80,000. Recordkeeper stated the particiapnt could use the After Tax contribution to further reduce the cost basis - would now be $16,000.

Question:

If the after tax is used to off set the cost basis, where does it go?? The recordkeeper stated it pays the taxes. Then stated the particiapnt would receive a 1099R for the $16,000 cost basis and have to pay taxes on this.

This does not make sense, why would you pay $64,000 in taxes and no where get credit for the payment.

What am I missing here!!!

Thanks

I'm working on the 2014 Schedule H for a Plan. The investment vendor provided a .05% credit back to participants per the contract. The credit is disclosed to the participants in both the 404(a)(5) information as well as reflected on the participant individual statements. It is also reported separately on the overall plan reporting.

I'm trying to figure out the "best" place on the Sch H to show this credit back to participants. It's not a huge amount. Perhaps "Other income"?

Where would others put this amount on the Sch H?

Thank you in advance....

To effect the election of an employer decision to exclude seasonal employees, does the employer need to do anything official, such as amend the plan, adopt a corporate action (e.g., through board resolutions), file anything with the IRS, DOL and/or HHS?

401(k) Plan was in pooled accounts prior to 2012. Funds transferred to individual accounts in 2012.

In 2015, trustee receives $11,000 check made out to the plan for excess commissions charged while the plan was invested in the pooled accounts.

My inclination is to allocate this money based on balances held as of 12/31/2014 as opposed to going back to the 12/31/2012 valuation to figure out who was in the plan at that time. This plan has a lot of turnover, therefore, the cost benefit to try to find the terminated participants as of 12/312012 is not worth it.

Has anyone been in a similar situation?

The Supreme Court of the United States, in its recent decision in M&G Polymers, provided some guidance about how to construe and interpret writings that are ambiguous about promises of health coverage for retirees.

Here's my question: Looking only to non-governmental employers, and only outside a collective-bargaining context, how often does this issue happen?

Are there still employers left that have not cut off obligations and expectations?

If so, what circumstances lead to not revising the documents?

I am just taking over this plan in which the only employee is the self-employed owner. I can;t figure out how my predecessor calculated the 4% match. The net schedule income is $94,249.16. She contributed $16,900.00 during the year. This amount was not included in the Schedule C breakdown. What should be the match be?

This a question of curiosity only, as I don't know of any such situation.

Has anyone ever done a plan for a worker cooperative? If you do, how does it work - for example, are employees paid on a W-2, or are they treated as individual "self-employed" people? I'm under the impression that cooperatives pay out amounts similar to an S-corp "pass-through" payment, but some payments are taxable and others aren't, etc... - and perhaps these are in addition to W-2 salary.

And would a worker cooperative "deduct" any qualified plan payment? I think the cooperative, as an entity, perhaps isn't subject to federal tax anyway - money is either legally retained to a certain extent - whatever that might be - or paid out either in a taxable or non-taxable form?

Again - just idle curiosity.

Hello,

What are you paying for specific recordkeeping services? I've found a lot of information in total but not for specific services. We are currently going through a benchmarking fee review however everything is in total. I was just wondering what different plans are paying for the specific services listed below.

Per participant fee

Trustee fee

Managed/unitized Accounts

Participant services:

- Distributions

- Hardship processing

- Loan origination

- Annual loan maintenance

If a plan's definition of compensation is simplified 415 and a new owners compensation is K1, does a change in compensation need to be made? If so, which one?

Say I have 2 plans. Plan A is 401k with no Keys. Plan B is a profit sharing plan covering all the Keys and enough participants from Plan A to pass coverage.

Right now, the plans are not aggregated for Top-heavy since none of the Keys are allowed to contribute to Plan A (401k).

If we allowed the Keys to contribute only the catch-up in Plan A, would the plans then have to be aggregated for Top-Heavy? The reason I ask is since we would only allow catch-up contributions in the 401k and catch-up contributions are not included in the TH test, do we still need to aggregate?

Thanks

The Instructions to Form 5500 state that an amended return should be filed to correct errors or omissions. In informal guidance or best practice, is there a materiality standard -- i.e., if the error or omission is immaterial, an amended return is not required? I realize this would introduce all sorts of subjectivity, but also hard to believe that DOL would want amended returns for inconsequential errors.

If a plan terminates 12/31/2014, then, on the 2015 5500-SF to question 11 ("Is this a defined benefit plan subject to minimum funding requirements?") would be No. Is this correct?

Thanks for any responses!

On a CB plan that has terminated and didn't file for an FDL at termination -- would this change anything for a VCP filing after the term date? The plan is being corrected for a 401(a)26 failure not timely discovered (after 9 1/2 months after the PY)

I don't think so...but not finding much to tell me either way.

A company with 10 employees has a (prototype) SEP plan where, currently, only the business owner has met the 3 of 5 year elgibility requirement. The business owner established a 401(k) plan as of 1/1/15.

1. Can the owner make SEP contributions only to himself and make no profit sharing contribution to the 401(k)?

2. Would there be cross testing between the two plans that would require the owner to make a profit sharing contribution to employees who are elgiible to participate in the 401(k)?

We have a 401k plan with match (not a safe harbor) for a public library, with only 5 eligible employees, none of whom are close to being HCEs.

The Library's director is over age 50 and will contribute the full elective deferral max of $24,000, including catch-up plus receives a match of around $2,000.

Can the Library Board make an additional employer contribution for her, perhaps up to $33,000, without giving any additonal employer contribution to the other NHCEs? With no HCEs there would not appear to be any discrimination issues. The plan would have to be amended to allow for individual rate groups and this probably could not take effect until 2016, but once that is in place, would this fly?

I think the idea is that she would go the Board and ask that her compensation be reduced by the $33,000, and the Board would then simply deposit that for her as a PS contribution.

Thanks

We have received some litigation proceeds for old 401k plans that have terminated. The businesses that sponsored the plans have closed. For one payment, we can locate the owner of the former business and for the second, we cannot locate the owner of the business.

We are trying to find guidance on what to do with these litigation proceeds. Who should they be sent to? If they are supposed to be assets of the plan, what is commonly done for plans that no longer exist? We are only talking about a payment of less than $50 in both cases. Thanks!

For a participant who has an outstanding loan and they terminate and take full distribution should the outstanding loan be reported on line 8e or included with the benefits paid on line 8d?

Example, participant balance is $40,000 including an outstanding loan of $5,000. The participant terminates and does not pay back the outstanding balance but rather takes his remaining account balance of $35,000. Should we report $35,000 on line 8d and $5,000 on 8e, or just $40,000 on 8d, or do it a different way?

Thank you in advance for any thoughts and opinions!