An IRA custodian receives a request to perform a substantial (in the six figures) Roth conversion from an traditional IRA into a Roth IRA during 2014. The custodian now realizes it never performed the conversion but has all of the materials it would have asked for to complete the transaction during 2014. Is there anything the custodian can do? If this were a qualified plan, EPCRS would dictate a result but it seems like the account holder is stuck. Is the only possibility to have the custodian go get a private letter ruling?

I have a 401(k) plan that merged with a DC plan. Within the new merged plan, participants have two accounts: one for elective deferrals (401k) and one for nonelective deferrals (DC). A participant wants to roll over some of his balance.

The plan allows for rollovers, but it doesn't address what happens if the participant doesn't want to roll over his entire balance. More specifically, it doesn't say whether the portion that isn't rolled over must be (a) distributed at the time of the rollover or (b) left in the plan. Is either one required or prohibited by the IRS? Or can we amend the plan to pick either option?

Not sure if it makes a difference, but the distribution options are annuities or a lump sum.

Thanks to anyone who can help.

A 401(k) plan sponsor client just received a few Schedule K-1s for participants in the client's 401(k) plan. The partner listed on the K-1 is the trustee of the 401(k) Plan. The Schedule K-1's were generated by investment alternatives under the client's self-directed brokerage window. No unrelated business taxable income is reported on the K-1.

I wouldn't have expected to have these generated for a tax-qualified 401(k) plan, am I missing something? Should the client do anything with them? I was thinking of reaching out to the fund that generated them and ask why they were generated.

Plan uses prior year testing.

If using current year testing would pass ADP & ACP easily.

Plan passes ADP by a lot using prior year testing.

Plan fails ACP by tiny amount using prior year testing.

Matching formula has always been the same in the plan.

Can I shift small amount of prior year ADP to prior year ACP to pass ACP test?

I know I can do this current year, I'm just looking to see if it is allowed with prior year.

I have a plan that is on a VS plan. We will be restating to another VS sometime this year.

They have 1 participant who was allowed to defer early (Jan 1, 2015). What are the correction options?

If we do an amendment, do we have to submit the PPA restatement for a Determination Letter?

Is distribution of the funds acceptable?

PPACA 1411(e)(4)(B)(iii) requires that the Marketplace notify the employer when an employee is granted a subsidy and provide the employer an opportunity to appeal. I have not been able to confirm that any such notifications are being made.

4980H provides that large employer penalties are calculated for months for which the employee "has been certified to the employer under 1411...as having enrolled for such month in a qualified health plan..[and is receiving subsidies].

So does that mean that employers can't be penalized for months prior to the date they receive the 1411 certification?

A multiemployer 401(k) plan and a DC plan merged. Each participant now has two accounts within the merged fund: a 401(k) (elective deferral) account and a DC (employer contributions) account.

A participant wants to roll over his 401(k) account into an IRA. Is he forced to roll over the entire 401(k) account, or can he roll over just a part of the 401(k) account? And if he rolls over all or part of the 401(k), what legally must happen with the DC account? Is he forced to take a distribution on the entire DC account or just a part or nothing at all?

Thanks for your help.

Based on info from this forum, 403b Answer Book, various articles, websites and vendors....it seems to me that a non-electing church plan may be treated differently for testing purposes depending on the type of plan it sponsors. To be specific, I am referring to a "steeple" church as defined in 3121(w), including qualified church-controlled organizations (not to church affiliated organizations).

Here's what my research seems to indicate:

A non-electing church plan that is a 403b with a match does NOT need to do ACP testing.

A non-electing church plan that is a 401k with a match DOES need to do ACP testing (and ADP, too)

So, it looks like the "type" of plan a church sponsors is important to the testing required. Is this correct?

I've got three NFPs who want to establish a common plan because they are essentially three cooperative arms of the same service - they share an Executive Director and many admin functions, and there is some board overlap.

First - I know there's an 80% threshold for commonality of board members to determine if it's a controlled group or not. At what point is that looked at? Board positions begin/expire in the middle of the plan year, so do I look at BOY, EOY, or include everyone who as on the board at any point during the year?

Second - Even assuming that it's all throughout the year, I don't think that I meet the 80% level. So if these entities want a single plan, it would have to be a MEP. I know that MEPs are a thorny enough issue with 401(k) plans - is there anything in the 403(b) world that would prevent one?

Thanks.

At the request of my employer I worked past age 65 but then was terminated without notice in December 2013, age 67.

My employer offers a cash balance plan, which is a leftover plan from previous re-organizations. In the summary, the SPD states:

"Once you have completed three years of vesting service with the Bank or its affiliates, you are "vested", which means you have earned the right to receive a benefit when you retire or leave the Bank or its affiliates. You have the flexibility to take your benefit with you as a lump-sum payment, or if the present value of your pension benefit is greater than $1,000, you can either (a) receive monthly annuity payments, or (b) leave your account in the plan until the April 1 following the year in which you reach age 70 1/2 and continue to earn interest credits."

The SPD, in a Benefits Illustration section, indicates that "Rick could receive a benefit at age 60 in a single lump sum or as an annuity. Or, if he prefers, he can let his account remain in the plan and earn annual interest credits until he is ready to retire."

The SPD also states, "If you leave the Bank after age 65, you can elect to defer payment until April 1 of the year you reach age 70 1/2".

Nowhere in the SPD document is an indication that benefits will be suspended, if you continue to work past age 65.

My employer has suspended benefits on August 16, 2011 (my 65th birthday), including interest credits. I likely received a notice at the time, but do not have the document now. My questions are, (a) can an employer suspend interest credits in a cash balance plan, (b) does the suspension end with my termination in December 2013 and am I entitled to interest credits from then onwards, and © can I recoup the lost interest credits if I wait until I am 70 1/2?

The plan states benefits in terms of a monthly single life annuity (and several other options), but does not communicate the accrued balance in the hypothetical cash balance account (contrary to the indications in the SPD).

Is an IRA protected from Malpractice claim if the IRA account and owner live in Massachusetts?

I started working with a client who is now retired (about 5 years) and she was sold a life insurance contract in her 403(b). My understanding is that these policies need to be surrendered at retirement or distributed (by paying income tax on the cash value). Does anyone have more specific details on how to distribute the policy? I assume if the participant wants to simply get rid of the insurance they can exchange the cash value into another 403(b) or roll it into an IRA.

Secondly, the insurance company has been sending a 1099 each year for the pure cost of insurance, how does the payment of taxes over these previous five years on an income not actually receive affect the basis in the policy, if any? In other words, can they subtract the amount they've already paid in taxes from the cash value in order to reduce the amount of taxable income the policy would produce by the nature of it being distributed?

Thanks in advance,

ScottyD

I have a client who is considering using the ESOP for safe harbor matching contributions. Other clients have used their ESOPs for safe harbor nonelective contributions, but I don't yet have a non-KSOP making matching contributions in the stand-alone ESOP.

The regs show that this is permissible. §1.401(k)-3(h)(4): "Safe harbor matching or nonelective contributions may be made to the plan that contains the cash or deferred arrangement or to another defined contribution plan that satisfies section 401(a) or 403(a). . ."

The ASPPA DC-2 book states, however, "If this option is used [i.e., contribution to a different DC plan] it will typically involve the safe harbor nonelective contribution." (as opposed to the safe harbor matching).

My experience so far lines up with the comment in the DC-2 book. But why is that? Shouldn't be very difficult to calculate the proper match based on the 401(k) deferrals, and designate that portion of the ESOP contributions accordingly. Obviously there are other issues to deal with, but do any of you have any experience about why a safe harbor match might be a bad idea as opposed to a safe harbor nonelective?

Thanks!

Marcus

I have a controlled group with two separate businesses. One has 8 employees and one has 500 employees. Can they not be a QSLOB because each seperate line of business needs at least 50 employees? Or, is it OK because one of the two has 50 employees?

Can you amend a plan after the year end to ellect out of using top-paid group to just using normal HCE rules?

(don;t worry about the future dates, just making an example).

Participant A terminates on 3/3/2015 with a loan balance of $5,000. Participant is not eligible for a distribution from the Plan until after the end of the plan year (I..e, not until January 2016. Participant is rehired in December 2015, after the loan is defaulted, but before he is eligible for a distribution.

Has there been a loan offset?

A participant took a loan for 30 years because it was for a primary purchase. However, the deal on the house fell through. Is he able to keep the time period on the loan or should he contact HR to have them reamortize over a 5 year period?

I have a client that has a number of participants with plan loan problems. About half of the affected participants have terminated. I am proposing to file a VCP application and propose that the correction would be done by allowing the affected participants to reamortize their loans for up to the 5-year limit. I am also proposing that no reporting of these corrections take plan on Form 1099-R. Does anyone with experience dealing with the iRS loan corrections in VCP know if the IRS allows the reamortization approach as applied to former participants?

Thank you.

(ii) Application of nondiscriminatory classification test. A rate group satisfies the nondiscriminatory classification test of § 1.410(b)-4 (including the reasonable classification requirement of § 1.410(b)-4(b)) if and only if the ratio percentage of the rate group is greater than or equal to the lesser of—

I am trying to help a 50 year friend of my wife. Her deceased 2nd husband was a 50 year friend of mine. Our friend, lets call her "L", got divorced in 2001.

her ex-husband worked for Dade Behring. As part of her divorce settlement there was a QDRO set up. DB instructed "Merrill Lynch/Howard Johnson & Co" (record keeper for the plan) to set up a "cash balance plan" in her name. Set up in 2001 and by 2003 had grown about 7K to a total of 55K. L moved from MD to FL for 2002, 2003, 2004. L moved back to MD in 2004. L contends she forwarded her new MD address to DB but never got any other correspondence from them in MD. After her move from FL, hurricane/flooding at the lake area, the FL address no longer exists. One of her original choices on the DB letter was to (do nothing) wait until no later than 70 1/2 to take distribution. L elected to wait till 60 and has searched everywhere for this QDRO account. Dade Behring was bought by Siemens Co somewhere in 2008-9 time frame. There is nobody at DB, they are gone. Her SSN is not listed at; Siemens, Merrill Lynch, Fidelity, Prudential, Pension Rights Center, US Dept of Laboror Pension Benefits Guarantee Corp. They all contend to know nothing about her or the QDRO. We sent a fax to Siemens Co back on Dec 12, 2014. As of today they don't have a resolution and say they are investigating. Where can we track this QDRO? We have the signed, sealed QDRO in our possession. We have made 100+ calls, spent endless hours, and sent out faxes and letters with information. Still nothing. Where do we turn next?

PS- our friend L does not have a computer or know how to use the internet. My Wife & I are her main avenue for finding this.