Anyone have any experience with the Form 926 reporting for a qualified plan's investment in an offshore hedge fund? A client's legal team is certain that a Form 926 should be filed for such investment, but since the plan does not file a tax return is uncertain of the mechanics of filing it.

If an employer reemploys an employee even though she has been on a military leave of absence for > 5 years, does that mean the employer has to provide the employee with credit under its pension plan (participation, vesting, benefit accrual)?

It doesn't seem right that the employer that is more generous than it has to be in reemploying the employee then has to provide service credit for all those years in the pension plan (about 7 years in this case and the employee only worked at the employer for 5 years).

Thanks in advance.

I have a scenario where I have a safe harbor match of 100% of 4% and for 2012-2014 they didn't have a cap on the match at the annual compensation limit, so some received thousands more in match because their gross income was over $250,000.

How do I get participants to return funds if they have already taken distributions? Are there any correction methods for this?

My FAVORITE topic...

Plan uses 3% nonelective. They have a match that does not meet the ACP Safe Harbor (at least I don't think it does) because they cap the match at $5,000 per year. I don't think it meets the ACP because it is at least possible that an HCE could have all of his/her deferrals match, while an NHCE (perhaps one whose compensation increases substantially from the prior year) does not have 100% of their contributions matched.

But regardless, they want o increase the cap from $5,000 to $6,000. That means that some HCE's and some NHCE's will get more match, but probably will disproportionately benefit HCE's, because the full $6,000 match only inures to those making more than $120,000. Of course, if one looks at it from a different perspective, it is truly the HCE's who have been discriminated against all along.

Anyway, permissible or not too permissible?

I know for IRAs, you are only permitted to take distribnution and re-contibute the money within 60 days in order to avoid the taxes once within a 12 month period.

Are there similar rules for 401k? I know i can take a distribution and re-contribute the funds within 60 days, but is there a limit to 1 per year? If so, and you have a 401k and IRA, can you take a distribuiton from each and re-contribute within the same 12 month period?

Also, I know you are permitted to take a distribution from a 401k and roll it into an IRA to avoid taxes, can the same be done with an IRA? Can you take a distrbution, then roll it into the 401k within 60 days to avoid taxes? If this is allowed, then couldn't you take as many distirbuitons from an IRA in any year as long as you roll it into the 401k within 60 days?

Thanks

I know that they haven't been active for awhile, but why were the Q&A Columns cut back? They included some good info on a number of relevant topics.

A real woman is a man's best friend.

She will never stand him up and never let him down.

She will reassure him when he feels insecure and comfort him after a bad day.

She will inspire him to do things he never thought he could do; to live without fear and forget regret.

She will enable him to express his deepest emotions, and give in to his most intimate desires.

She will make sure he always feels as though he's the most handsome man in the room and will enable him to be the most confident, sexy, seductive and invincible...

No wait...Sorry... ....I'm thinking of whiskey. It's whiskey that does all that shit.

Never mind.

Anyone have practical experience regarding filing Form 8928 and specifically, for instance:

-- whether the IRS challenged the filing's characterizations (i.e., failure due to reasonable cause and not willful neglect, etc.)

-- whether the filing of Form 8928 triggered an audit

Hi - I believe there is a difference between the conditions one can impose to receive a Gateway minimum in a standalone DC Plan versus conditions for Special Gateway (in combo DB/DC Plans). I believe the Special Gateway is more liberal because you cannot condition entitlement on whether or not an NHCE is "Benefitting" (within the meaning of 1.410(b)-3).

If my impression is correct, there may be a need for different language in standalone DC's versus DC's that are part of a combo.

I have attached a memo outlining the issues. I will greatly appreciate any feedback.

Thanks.

Q re Gateway Minimums in standalone DC plans versus DB-DC combos.pdf

Company A is a professional corporation with a Safe Harbor 401k Plan.

The son of Company A's owner is interested in buying the practice via an asset sale, mid-year, and he would like to acquire the 401kSH Plan with the purchase, as all employees will continue on with the "new company" or successor employer.

It is my understanding the transfer of the Plan should be addressed in the buy / sell agreement, including service to be credited, contributions/deductions for year of purchase.

Questions/Concerns:

With it being a "401k Safe Harbor" plan is there any problem with the new company amending the Plan to reflect the successor Plan Sponsor's Name, EIN mid-year, coincident with the buy/sell? The new company does not intend to "change" any of the Plan's provisions -- simply wants to become the successor plan sponsor.

I am not familiar with any "mid-year" Safe Harbor Notice provisions. Other than providing an SMM to participants, is there any other Notice requirement? My concern here is the SHMatch -- Company A will fund the SHM for all payroll through Company A; the successor Company will fund the SHM for all of its payroll -- is this considered an impermissible change mid-year. They do not anticipate a PS contribution for this year.

Assuming the new company is permitted to Amend the Plan mid-year to reflect its successor sponsorship, Name and EIN (no other changes are intended), is there anything further necessary to affect this transfer of Plan from old sponsor to new sponsor?

Thank you

Estate is bene. of IRA. The IRA owner's will says everything in estate goes to adult son.

Can't the IRA be moved over to the son as an inherited IRA of which he is the sucessor bene.?

Thanks in advance for any responses.

What is the minimum rate allowable for participant loans?

We normally set at Prime +2%, but at 5.75% this is higher than participants might be able to get elsewhere.

Self-directed plan participant directed "investment" of portion of his account ($40,000) to individual, secured with a promissory note. Individual has not been making payments for two years. Participant is also a co-trustee. Other trustee not comfortable with this. Have not seen plan document yet, but initial question is whether this is even allowed as an "investment"? Can a participant direct the plan to transfer a portion of his account balance to an individual and "secure" the investment with a promissory note? Is this any different that using plan account funds to invest in a business? real estate?

We have a plan that permits IDAs. In 2014 a participant requested a transfer to a brokerage account at Fidelity that the plan trustee understood would be an IDA in the name of the plan. In fact, the account at Fidelity was set up as a rollover IRA. It is not clear if the error in titling the account was Fidelity's or the participant's. The funds were not eligible for distribution.

All of this was discovered over a year later when we (as TPA) requested copies of the 2014 IDA statements to prepare the 5500-SF.

The plan did not issue a 1099-R, as it was not understood to be a distribution. Fidelity has issued a 5498 showing receipt of a rollover.

Fidelity is unwilling to re-title the account in the name of the plan. Instead, they propose to open a new account in the name of the plan, liquidate the assets, and have the participant request a distribution from the IRA to the plan as a "return of excess contribution". I am afraid that doing it that way will trigger some sort of tax liability. Since the distribution in question is large, we'd like to avoid that if possible. And if I'm incorrect about this detail, I'd love to hear that!

Any suggestions about how to fix this?

The 401(k) plan permits 3 loans at a time. A participant took a loan previously which was then deemed. If the participant has enough assets to take another loan, can he since the plan permits 3 loans? Does the deemed loan need to be repaid first? Thank you in advance for your advice!!

A plan has a full-time employee who is moving to Puerto Rico. They have no other employees in Puerto Rico. They want to keep him, but do not want to get involved in having a dual-qualified plan. If the plan excludes leased employees, would it work if they fire him and rehire him as an independent contractor? It seems the only down side to that is he would be missing out on company match. Also if he becomes a terminated participant with a balance in the plan, would they still need to amend the plan to become dual-qualified in Puerto Rico?

Cross tested plan. The allocation groups are going to be 1) Any employee who is under 59 and contributes at least 2% in deferrals will receive 2% PS contribution and 2) any employee over 59 will reeive 2% PS contribution irrespective of elective deferral.

Other than the general test, is there something wrong with this "formula"? Is it really a match? Is it BRF? Something about it just doesn't feel right.

Thanks

To whom this May concern...

I am looking on feed back to find out if what my husband's employer did was legal. I am a terminally ill and disabled 38 year old female living in Cedar Rapids, IA.

We recently received word from our land lord out of the blue that we had a preliminary inspection coming up within 48 hours after the notice. My husband has never had a problem with using FMLA in the past. He has never abused FMLA nor has he constantly had to use it. Only if I have had doctor appointments then he does.

He also had 2.5 hours of paid sick time left for the year before his time re started and his sick time, personal time, etc. all renewed themselves. We only had 2 days to prepare for this preliminary inspection.

As stated above, I am terminally ill and disabled and am on oxygen full time. He told his job that he needed to use the rest of his sick time and use two of his FMLA time. He never ran out of FMLA at all because he used it sporadically.

His employer questioned the use of FMLA after never having done so in the past and told him it looked suspicious to use FMLA when he was sick. My husband is the type of person who never gets sick often but did as a result of emotional distress and duress.

When he returned to work on friday that week, his main boss came to him and told him that he was being asked to show up at what is known as downtown taj ma hal the begining of the following week. When he showed up at the meeting the following week, they questioned his need for FMLA which in Iowa is against the law to do. They told him that he was being put on administrative paid leave until they could figure out how to deal with the situation.

They called him in on Thursday the 24th of May and fired him for trying to take FMLA and said it was improper use of FMLA because it was helping me. They told him to get it priorties straight and that he shouldn't let his personal life interfere with his professional life working.

the problem is, that I have had multiple strokes, I have had several heart attacks, I have heart problems, and kidney failure and my lungs are failing. They told him that because our situation dealing with the land lord was not important enough to warrant time off and he misused FMLA and took time off he was not entitled to.

I cannot do alot of things for myself as a result of my health conditions and now after filing for unemployment, the school district is trying to fight my husband on unemployment benefits trying to say he's not entitled to them. He has a meeting this coming tuesday with the school district and law judge over the phone to determine if he is qualified for these benefits... (although I don't understand why he wouldn't be in the first place since he was fired wrongfully rather than a legitimate reason)

So I am wondering if I have an FMLA violation lawsuit case against the school district as well as a wrongful termination case against the school district for what they did to us. I would like people to give me some feed back. Please no mean or negative comments here. We need help and have to figure out what attorney to use if we do have a case. Thank you all for your feed back! Please note this information WILL be passed on to my husband.

By the way, my husband's employer tried to pry into my medical records to find out if FMLA leave was being used properly which we found out they cannot do without a subpeona and the HR has taken it upon herself to try and create a clause in the FMLA when applying for it in the school district that mandatory disclosure of medical records is necessary to qualify you for FMLA when they have never done that in the past. I don't think they can do that. I in my heart believe everything they have done is illegal and have had prior law suits before for medical related stuff. If you have been in this situation or can give me feed back on this, situation, please let me know. Thank you! P.S. our land lord is still holding the lease over our heads and now my husband has no job as a result of this surprise inspection. Is it legal for him to be fired for something beyond his control?

One-person, owner only DB plan document was signed and set up for 2014.

Owner has had a change of heart and no longer wants the plan. Would like something written to terminate / undo / close the plan.

No deposits were made, nothing exists other than the plan document and I believe a TIN that was applied for the plan.

I found this thread: http://benefitslink.com/boards/index.php?/topic/45372-er-changed-mind-no-contributions/

Are there others I should looking at? A colleague seemed to think there was a form that could be filed with the IRS but I'm not familiar with any.

Does anyone know or have additional suggestions?

... and so ends another sleepy, dusty delta day ...