I have a client who wants to exclude both "taxable medical and disability benefits"

and "excess group term life insurance in excess of $50,000" from the definition of compensation.

Is there a way to do this under a safe harbor?

Are taxable medical and disability benefits excludable under the first modification under 414(s) safe harbor compensation? Are they fringe benefits? Are they welfare benefits? Thanks.

One year ago I received ESOP distribution from my former employer that I rolled over to a traditional IRA. Today I received a phone call from the company that maintains my IRA saying that the employer overpaid, and that want $6000 back.

If the error is correct, I have no problem giving back the money, but I obviously I do not want to pay tax penalties for making an early withdrawal from IRA.

Will there be tax penalties, and if so, who would be responsible for paying the penalties? Were does the law stand in this unusual case?

Is the law different in different states? I live in Oregon.

401k Plan includes ONLY SH Match. The document provider compelted an amendment in November 2014 (effective 1/1/2015) to exclude bonus from calculating the match (calendar year plan). The Safe Harbor Notice correctly disclosed that bonus would be excluded.

Come to find out that instead of checking the box in the Safe Harbor Match column, they check it in the Discretionary Match column. As noted there is no Discretionary match.

I'm curious to know what the thoughts are in terms of issuing a clarifying amendment. I am struck by the notion that this is a discretionary amendment, so perhaps I have until the end of the year to perfect the amendment (i.e., move the checkmark)?

If there was ever a case for a scriverner's error positon, I would have to assume this is it.

Deceased participant named 1 beneficiary for his 401k account balance.

The beneficiary wishes to have the account balance split evenly with another individual (her niece) who is not named as a beneficiary

Is this permissible?

Both distributions will be to IRA's so there will be no tax implications

My thought is that if the beneficiary is signing off on the instructions for distribution, she can divide the distribution as she chooses....

Thanks in advance.

My employer advised me Friday (5/19/15) that excess contributions were made to my Vanguard SEP-IRA through the company's SARSEP plan for the years 2012, 2013 and 2014, and that I will have to amend my tax returns for those years. The excess contributions are on the order of $7500, $8333, $8333 for those years. My total income deferrals in each year were more than 25% of my pay. I was over 59-1/2 years of age when the contributions were made and was planning to retire at age 65 at the end of this year. Contributions are deducted from my pay and sent to Vanguard by the company's CPA. I have not been provided with corrected W2s or with written Notices of Excess Contribution. I have never been provided with a copy of the Form 5305A or other SARSEP plan document. The employer's SARSEP is being audited by the IRS, and I am fearful that the plan may be disqualified. What do I do?

Client opened a SEP with bank in 2009. Client does not have original paperwork and claims to not have prepared SEP plan doc. She funded in 2009 - 2013 (in 09-10 based on schedule c, from 2011 on she incorporated and based contributions on w-2).

She hired an employee in 2014 who earned $65,000.

Files taxes on 1120s and is on extension.

Wants to fund for 2014 but wants to exclude employee.

Can client exclude the employee from the plan? If not, can client start a new and separate SEP for employees other than owner?

how far back will the IRS make you go if you can't locate any plan docs since the 80's? the plan sponsor does have a determination letter on the 80's document.

A defined benefit plan that was frozen in 2001 currently doesn't have a lump sum feature. The AFTAP is 63%. I seem to recall that there is an exception to the restriction on paying out lump sums under 436 if the plan was frozen before 2005.

If that's true, can this plan be amended to add a lump sum optional form, and then start paying out lump sums?

Or would that somehow be considered an amendment increasing benefits and therefore not permitted?

Any other ways something like this could blow up?

Thanks!

I've got an old 401k plan with a paid up Life insurance policy in the plan. The plan itself doesn't allow loans but the insurance policy does. Can particpant take a loan out of the inurance policy? Will this loan need reported on the 5500 as a plan loan? Is there a limit what they can borrow.

I'll be honest I'm lost when it comes to Insurance policies in general in qualified plans and if anyone has a link that explains how this stuff works it would be greatly appreciated.

Sorry, this was originally posted to the wrong category.

A calendar year 6 participant cross tested 401(k) plan fails 401(a)4. The plan has a 1 year eligibility requirement.

To make the plan pass, an ineligible employee was brought in, given a contribution and made 100% vested through a corrective amendment. Once he is made eligible through the corrective amendment, is he then eligible for all other plan purposes or does he need to wait until when he would have entered?

Normally he would not enter until 1/1/16.

Thanks

A calendar year 6 participant cross tested 401(k) plan fails 401(a)4. The plan has a 1 year eligibility requirement.

To make the plan pass, an ineligible employee was brought in, given a contribution and made 100% vested through a corrective amendment. Once he is made eligible through the corrective amendment, is he then eligible for all other plan purposes or does he need to wait until when he would have entered?

Normally he would not enter until 1/1/16.

Thanks.

I am having trouble with item 3g column (ix) for the current IRS Form 5307.

What is "The Required Practioner Statement" that should be attached?

1. Is this refering to amendments where the Prototype Sponsor adopted the amendment on behalf of all adopting employers, and states somethin to the effect of:

"Except with response to any election made by the Employer in____, the protoype sponsor, on behalf of all adopting employers, hereby adopts this Amendment on ________"?

2. How do we judge the adequacy of these statements?

I have one that just says:

"Except with respect to amendments made by the Employer to this adoption agreement, this amendment is hereby adopted by the prototype sponsoring organization on behalf of all adopting employers on.

[sponsor's signature and Adoption Date are on file with Sponsor]

3. If any amendment was signed by the employer and not the prototype Plan sponsor, do we indicate "NO" or "NA" in item 3g of column (ix)?

There are no instructions for the current Form 5307 that indicate how 3g(ix) should be answered.

Thanks

If you have a Wrap document for a Company of over 100 employees and offers multiple benefits that includes a health spending account (FSA ) plan, the benefits can be filed on 1 5500, correct? Also, there will be no specific info on the FSA and no schedules.

Suppose a DRO that was signed by the judge and the person who is to be the alternate payee, but not by the participant, is being submitted to the plan administrator. It is not clear whether the participant is willing to sign the order.

Would the fact that the participant has not signed off prevent the order from being properly recognized as a QDRO? If it makes a difference, presume that the order relates to a defined benefit pension plan.

Plan allows loans from Roth Account.

Participant terminates employment before the loan is paid in full.

Participant is 591/2 and 5 years since first participated in Roth.

The Roth loan balance is $10,000.

Am I correct in saying the defaulted loan (now a deemed distribution) is not a "qualified distribution" therefore, the portion of the loan balance attributable to earnings is taxable income.

For example:

Loan Balance $10,000

Portion attributable to deferrals $8,000

Portion attributable to income $2,000 - taxable income

Thanks

How to rollover inherited401k. Is it true the partner get special benefits from internal revenue services while they inherit retirement account including 401K plans.

I have a 403(b) prospect. 6 operating divisions, same Board of Directors (controlled group). There is one plan document. All divisions can make deferrals (whew!). However, only 3 divisions get a Safe Harbor Match (the other 3 are excluded in the document).

I've never thought about doing this, so I don't know the answer....can a plan exclude employees from a Safe Harbor contribution? Let's assume that the plan would PASS coverage for the employees who are eligible for the SHM (assuming that matters).

I had always thought that a plan had to make SHM contributions to ANY employee eligible to make deferrals, or to those employees who had attained the statutory 21/1 YOS.

If you have cites, that would be great. Thank you.

I have a sponsor that wishes to merge their money purchase plan into their 401k plan as of 8/31. There is time for the 204(h) notice to get distributed. However the money purchase plan has a 1000 hour allocation requirement which most participants will likely meet by the merger. So when the plans merge, will the 8/31 balance be subject to QJSA and other money purchase plan protections but the future contributions (which will be identical but as profit sharing contributions in the 401k) will not be subject to the money purchase requirements?

Thoughts?

I have a client that is considering purchasing a business which currently offers a SIMPLE IRA to their employees. Our client would like to offer the new business' employees the match they are currently receiving in the SIMPLE IRA which is different than what their current plan offers. Is it possible to have employees receiving two different matching formulas? If the new business is bought in the middle of the plan year, does the SIMPLE IRA immediately terminate? Anything else I need to consider?

Thanks

A veterinary practice was a sole proprietorship. The retiring veterinarian sold the practice to a young veterinarian. The retiring veterinarian's 401(k) plan was terminated, and participants were given distribution paperwork when it was time to wind down the plan.

The practice has continued under new ownership (sole proprietor), with a new EIN, etc. From an employee perspective, all employees have remained and continued their service as if nothing had changed.

The new veterinarian started a new 401(k) plan immediately, so there was no gap in providing a retirement plan benefit for the employees. Some employees had elected to roll their funds from the prior practice's plan into the new plan, and others did not.

For those employees who did elect to roll their funds from the prior practice's plan into the new practice's plan . . . is that considered related rollover money or unrelated rollover money?

I know this question is beyond basic, but I can't find any information that points directly to this kind of situation.

Thanks!