I am interested in any comments regarding giving safe harbor (3%) contributions to former participants who terminated before an existing calendar year profit sharing plan was amended to add a safe harbor provision on October 1st of the plan year in which termination occurred. Such employees would not be "eligible" when the safe harbor provision became effective.

Thank you.

Employee wants to cancel a 2015 deferral election (1st year in the plan and it's the only one he's in) and just pay tax and take a 20% haircut. Can it be done??? Neither the disability nor hardship exception applies in this case.

Can anyone point me to something that says that the following works:

Participant is vested if they continue employment on a substantially full time basis until age 65. Participant will be 100% vested immediately upon the occurrence of any of the following: death, disability, termination without cause.

Can I say:

termination with or without cause?

I think the employer wants the incentive to be for the Participant to stay, but if on the other hand it is the employer who wants him to go, they want the participant to vest at that time.

Employer has severance pay plan (adopted about 10 years ago) that pays based on a service and compensation formula upon either voluntary or involuntary termination of employment. Covers rank and file as well as management and owners as long as they have at least a year of service.

In the plan, the employer retained the right to unilaterally modify amend or terminate the plan after 90 days' notice to affected employees.

Putting aside those employees who might be considered to have effective control, does this plan provide deferred compensation (legally binding right to compensation in subsequent tax year)? Generally there is no legally binding right to a payment if the service recipient can eliminate it after the services are performed. However, in this case, the employees have a right to notice and in the 90 days following the notice they can take action (voluntarily terminate employment) and then would be entitled to the severance pay. So does the employer's discretion to reduce or eliminate the payment lack substantive significance?

(I understand that because payments are made upon voluntary termination that this plan doesn't qualify for separation pay plan exception to 409A).

What am I missing:

Employee over age 49 has 2015 gross wages of $26,000

Makes max elective deferral of $24,000

Employer contributes $6,500 (25%)

What limit is being violated?

First I'm sorry if I posted this in the wrong place.

I had an old 401k I left with my former employer. They were bought out. The new company sent me a notice to move the funds. I faxed some paper work to then I needed signed so I could put the funds in my current companies plan.

I never heard back from them. Due to unforseen circumstances I forgot about the account.

This month I got two items in the mail. One is a 1099 form from them regarding the former 401k. The 1099 was for the whole amount no taxes withheld. The second is the new account where the money was deposited.

The amount was for over $6000. Do I have any recourse, or am I stuck with a big tax bill.

Thank you,

Jim

Corp. ABC sponsors a 401(k) Plan. Corp. ABC has two 50/50 shareholders who liquidate the business 6/30/14 and go their seperate ways. One shareholder takes 7 of 11 participants to a new corp. which does not sponsor a new plan. This group is treated as terminating from ABC corp. and is paid out in 2015.

The second shareholder takes the other 4 participants to a new corp XYZ which adopts the existing ABC corp Plan as the new Plan Sposnor.

Since ABC and XYZ are not a controlled group or ASG, how must the prior year ADP test be completed?

I have tested the ABC employees separately for the first half of the year and they pass based on the prior year NHCE ADP. If I test the XYZ employees seperately for the second half of the year, what NHCE ratio do I use?

Here is the story:

Company A sponsors a DB plan. Recently company A declared bankruptcy.

Company B - owned by the same owner as company A- purchased in auction, as the highest bidder- the bankrupt company. The purchase was approved by the bankruptcy court.

Company B assumed/hired all employees of the bankrupt company and wants to continue the plan giving all employees credit past service.

Question:

Excepting the corporate resolution of company B pertinent to the take over and continuance of the plan and the obvious changes in the 5500 reports (name, EIN, address, etc) and the amendment of the plan sponsor information in the Adoption Agreement:

• Any other documents to be executed?
• Does the bankrupt company purchased by have to adopt also a resolution regarding the transaction?
• Thanks for your help

Non key HCE was a participant in the company's DB plan. In 2015 he will become a member of a nonstatutory excluded class of employees.

Should he accrue the TH minimum after becoming excluded?

Thanks for help

How does the Cadillac tax apply to an EGWP plan? Under the ACA, there is a 40% tax on the excess cost of health insurance. A Part D Employer Group Waiver Plan ("EGWP") provides insurance that supplements Medicare. How do the Medicare reimbursements get treated for Cadillac tax purposes? Example: Assume monthly cost of EGWP plan is $1,000 and that Medicare pays for $750 and employer/insurer pays for $250. Is the total $1,000 considered the cost of health insurance or just the $250 paid by the employer/insurer?

A calendar 401(k) Plan and we just discovered that for a while we were getting Pay period reports instead of pay check reports. So January 3, 2014 Paycheck was included in 2013 year. Do I have to redo the 2013 work?

Isn't there some rule about when a pay period spans 2 years you have an option which year to include it in?

A safe harbor profit sharing plan excludes part-time employees using the following language:

"Part-time Employees not scheduled to work 1000 hours in a 12 month period, except that if such a Part-time Employee does work 1000 hours in a 12 month period, then such Employee shall become an Eligible Employee."

If an eligible employee (worked 1000 hours) terminates in 2013, then in 2014 is re-hired as a part-time employee and does not work 1000 hours - is that employee still eligible for the safe habor 3%?

If the plan document didn't define "part-time" emplyees this way and just used a job class like "office staff", would that make a difference? For instance if the plan excluded only "office staff", and if the eligible employee was not an "office staff" before termination but then hired as "office staff", could we exclude them?

I can see the 2014 version is available, but when it the 2015 version available? Trying to decide if we should by it or just wait.

I feel like the 2015 should be out soon, right?

good evening,

how do I remove medical coverage after the deadline has passed as well if I have coverage through my spouse's employer? please I need help????

Employer X offers its employees a health plann with a menu of choices. One of the options available to employees is a high deductible health plan ("HDHP") in tandem with a health reimbursement arrangement ("HRA"). Normally, the HDHP would have declined claims for expenses and applied them to the deductible until it was reached. However, the employer would pay those amounts to the employee under the HRA.

It was recently uncovered that the insurer had been paying claims incurred from the beginning of the year under the HDHP in spite of the deductible (so the plan was working in direct opposition to the way it would currently work). The HRA is, of course, funded by employer money. Once this situation was uncovered, it was corrected prospectively. However, for those employees who were reimbursed under the HDHP, what options are available to effect correction? The only options occurring to me are: (1) treat the employees' reimbursement as if they had actually been made under the HRA rather than the HDHP but credit these amounts toward the deductible under the HDHP (this might require a wash transfer of monies from the employer to the insurer and vice-versa); or (2) require the employees to reimburse the insurer for the amounts incorrectly paid under the HDHP and the employer would cut a check for an equal amount under the HRA. If this option is chosen, does the employer have to tax-report those amounts paid to employees who fail to reimburse the plan?

I've had advisors end up having a really hard time figuring out where to "hold" the money ofr 457(f) plans, and in some cases 457b plans.

Anyone have any suggestions? These are usually 1 person plans for me, so the "platforms" are out. We're looking for brokerage accounts. Anyone have any ideas?

When opening just a regular brokerage account, are there any pitfalls/caveats? I'll take any advice.

http://www.irs.gov/publications/p957/ar02.html#en_US_2013_publink1000291661

I just wanted to share this with everyone in case they were not aware of its existence. It goes through all of the payroll reporting requirements for deferrals AND distributions.

Extremely helpful. One of those documents prepared by the IRS that is written in English. Perfect examples. Simple terminology, etc.

Well done!!

Our firm recently took over as actuary for two plans that were just merged into one. We are coming across a few questions that we are having difficulty finding guidance on.

Background

1. Plan A: Plan Year is 9/1 – 8/31. Last 5500 filing was for the 9/1/12 to 8/31/13 plan year

2. Plan B: Plan Year was 7/1 – 6/30. Plan had a short plan year from 7/1/13 to 8/31/13 and last 5500 filing was for that plan year. The box indicating “final return/report” was not checked.

3. Plan A and Plan B Merged effective 9/1/13. Assets and liabilities from Plan B were merged into Plan A

Questions

1. Going forward, should the new plan use the plan number held by Plan A since Plan B was merged into Plan A?

2. Should Plan B file an additional 5500 filing (9/1/13 – 8/31/14) that shows the participant count and assets going to 0 on 9/1/13 or can the last return suffice as the final filing?

3. Prior to the merger, both plans:

a. Smoothed assets;

b. Had credit balances; and

c. Had shortfall amortization charges

Does the newly merged plan only retain the asset gain/loss, credit balances, and shortfall amortization charges for Plan A effective 9/1/13, or are the asset gain/loss, credit balances, and shortfall amortization charges from Plan B merged in as well? If plan B items are merged in, is there specific guidance on how to merge those items?

Thanks for any assistance.

For 410(b) testing, terminated participants with less than 500 hours of service during the testing year may be excluded. Is there an option to include some of those terminated employees or is it a all or none situation? Thanks.

I'm old enough to not remember if I posted this before, but...has anyone successfully set up a withholding program for New Jersey state taxes? (Like EFTPS where we do it on behalf of the client.)

I actually had one client who figured things out and did it themselves. And I think I had someone from the state on the phone once who said "sure it's easy, you just need Form blah blah and Form yada yada and Form xyz and Form abc and Form pqr to cover all of them", or something like that.

American Funds used to say that they couldn't, but I think they (and others) can do it now.

I just sent a question through their "contact us" section of the website, but I shudder at the thought of what I might get back, if anything.

Anyway, you get the idea - is there an equivalent to EFTPS for NJ?

(For the uninitiated, NJ says that plans must withhold state taxes if requested. We've made it very difficult to request on our forms but recently had a couple of people who outsmarted us and wrote a separate note.)