A Plan had a PPT in 2014. Per IRS, all affected participants became 100% vested,

I have read several articles that speak of "red-flags" with the 5500 - one of them being if there were a lot of terminees.

Question: I don't see anything on the 5500-SF to indicate a PPT. If so, and the IRS sees decreased participants, where do they also see that it was a PPT and everyone became 100% vested?

I just acquired a calendar year 401(k) Plan whose Plan Sponsor is an LLC electing to be taxed as a partnership. During 2014, there were two partners, along with staff, in the plan, one of whom (a long time participant in the plan) terminated his employment and partnership interests in June, 2014.

For 2014 and before, there were losses in the partnership. It is my understanding that when the earned income of a partner, which is composed of the partnership distributive share of earnings plus guaranteed payments, is negative, the partners cannot defer any amount into the plan nor receive any employer contributions. In this plan, only salary deferrals and a Safe Harbor match have ever been made.

Here's the problem: it appears that for years, the income being used for the partners was only their guaranteed payments which was given to them on W-2's. At this point, I don't know if the guaranteed payments were included on their K-1's.

For the plan point of view:

1. If the net partnership income is negative, the partners should not have deferred anything and, in turn, should not have received an employer match.

2. If this is the case, the company over-contributed and over-deducted these contributions to the plan. I believe, that this should require a resubmission of the partnership returns for the affected years as well as the personal tax returns for the partners involved. Am I correct on this?

3. To make matters worse, the partner that left in 2014 had most likely made his salary deferral and received matches for some time incorrectly and received his account balance from the plan during 2014.

This is obviously a mess. I will be meeting with the CPA and the client next week. The CPA has already dismissed these problems as minor and as "no big deal." As I see it, the plan has operational and/or qualification problems, over-deduction problems, distribution problems, etc., etc. and etc.

I am looking for some insights into:

1. Whether or not there might be other concerns that I haven't touched on and

2. how to go about repairing these problems, i.e., EPCRS.

Thanks, in advance, for any help.

We have a plan (non leveraged) that allowed some participants to diversify beyond the statutory six years. We use the Corbel plan document. Are there any pitfalls or any considerations that we need to consider?

I know an individual partner would not be considered an employer for plan sponsorship purposes. But what about a corporate partner? Can an individual partner establish an S-corp & transfer his partnership interest to the S-corp & then establish a qualified plan?

Oddball question - a 403(b) plan proposes to use the 20-hour exclusion. It is a 501©(3) plan subject to ERISA, and the plan has the appropriate "fail-safe" language if they ever go over 1,000 hours.

Now, they have a small collective bargaining unit agreement in place for a few employees, where the collective bargaining unit employees can participate regardless of hours.

1.403(b)-5((b)(4)(i) generally provides that if any employee in (4)(E) is included, then NO employee under (4)(E) may be excluded.

Does this preclude allowing the part-time union employees to participate, or does the general "you can do pretty much anything you want with unions where the agreement is subject to good-faith collective bargaining) override this?

I'm inclined toward saying it is ok, but I'm not sure I'm specifically getting there based upon the regs. I don't really read 410(b)(4) as specifically supporting where the client wants to be.

Any thoughts?

I am reading a Plan Document that has Auto Enrollment for new hires; the Auto Enrollment occurs on the participant's entry date, which is defined as being the date of hire. Which means a new hire would immediately starts deferring, effective with the first paycheck.

The Plan though has been operating by auto-enrolling new hires up to 45 days after hire date. This has been explained as due to an "Administrative Lag". The proces for deferring is a bit convoluted, as a TPA's website is used, where participants can elect their deferral percentage, and then this information is passed back to the company. If the participant does not visit the website, then after 45 days, the auto-enrollment kicks in.

I have not heard of "Administrative Lag" as being a valid reason for not auto-enrolling a participant when first eligible. Is this an acceptable delay?

How is the RMD determined when the account contains designated Roth contributions? I understand that you use the entire account balance to determine the amount. But is it withdrawn pro rata from pre tax/Roth funds? Or is it the participant's choice?

Thanks

Rev. Rul. 2004-55 (along with a handful of private letter rulings) explains how you can give employees a choice of treating their employer-paid LTD coverage either as pre-tax or post-tax. (If post-tax, disability insurance proceeds would be paid to the employee on a tax-free basis.) The facts in the Rev. Rul. are that all employees eligible for the coverage would have the right to make the election. Is there any reason why this is a critical fact? For example, can you limit the right of the election only to those executives to whom you wish to give this right? Employer does not want to be burdened of having to explain and administer the election to hundreds of employees every year.

This might be better on another board, if so, I apologize.

Companies A and B are a classic controlled group. My question is related to the 50 employee requirement for QSLOB. in all other respected the two companies seem to meet the QSLOB requirements.

They want to be able to provide substantially different benefits to each company, and presently, combined testing would fail, hence the QSLOB analysis.

Company A has 75 employees, company B only has 25. What happens to Company B when Company A is a QSLOB? Is B treated as a stand-along QSLOB by default since company A is no longer treated as part of the ER group?

Does company B need to do anything in particular? Or do they have to do testing on the basis of the full control group, while company A can just do their own testing, ignoring Company B?

I apologize if these are really basic questions, I haven't needed to look at QSLOBs in the real world until now.

Never go anywhere without your towel.

http://www.wikihow.com/Celebrate-Towel-Day

Our firm has been a full service provider. From recordkeeping to the trustee holding the plan assets to compliance documents, testing and reporting services. We recently acquired a TPA company where a majority of their services is documents, testing and Form 5500.

Prior to the acquisition the process to complete year end testing for this product included using allocated link to import recordkeeping data from the vendor but on a cash basis. This seems to be very time consuming as we are backing out prior year contributions and a lot of reconciling plan participants accounts as well as plan level, they believed by doing this they were finding payroll errors and such which after reviewing the service agreement we really are not getting paid for this service.

My question is does anyone else have this type of structure and how do you handle year ends? For 2014 year end we imported contributions provided by clients on the census but are having problems with not being able to utilize top heavy testing and corrections reports for ADPACP testing do not reflect earnings.

Any opinions on the most efficient way to handle these are appreciated.

401(k) safe harbor plan requires 1 year eligibility,

Prevailing wage contributions are included in the plan, which by default means immediate eligibility for that portion,

Question-for the Average Benefits Percentage Test, do these ee's who are only eligible for prevailing wage contributions have to be included? Creates a lot of zeroes for the NHCE's.

FT for the first time on the 2014 SAR's is adding into the SAR the disclosure that there are "non-exempt transactions with parties in interest" (or something to that affect) when we indicate that there were late deposits.

Are other software providers doing this too? It is a true statement of course, but I am just curious if there was any printed position on this from DOL, etc. I know for example that we do not attach the Schedule G for these on an audited plan. Somehow I doubt the DOL ever said "it's ok if you don't tell your participants about this" but thought I would ask.

A client is considering a merger with another client. Each firm has a DB plan and each plan would be fully funded prior to the merger. After the merger, a significant minimum funding contribution would be required. The question is ‘who would be entitled to claim the deduction for that minimum funding contribution?’ Would the successor firm be entitled to deduct the contribution or would that deduction need to flow back to the pre-merger firms?

It seems to me that the successor firm should get the deduction. That seems to make sense but its important to be certain and I would like to provide some documentation to support my conclusion. Is my thinking correct and could anyone suggest documentation? Is there a certain way that the merger of the firms and their plans should be structured so the successor firm would indeed be able to claim the deduction? Thanks for any help.

Beyond the SunGard and FT William products does anyone know of a system they would recommend?

Calendar year profit sharing plan uses allocation formula that is integrated with Social Security, at full Taxable Wage Base. Plan is terminated as of June 30 of the year. In applying the formula, MUST you use only 50% of the TWB? If not MUST, what is typically done?

I am a new JD and new to the field of employee benefits. I am enjoying the material so far and would like to improve my working knowledge of the vast regulations. There are two online LLM programs I am considering (Georgetown and John Marshall). Is this a valuable use of time and resources?

10% of participants in a client's plan are invested in multiple Target Date Funds, apparently not understanding the concept of enrolling in the one most age/retirement date appropriate for them.

If the client re-enrolls those who are in multiple tdfs into the proper single age appropriate tdf, would they be afforded the fiduciary protections under the QDIA default approach?

Just wondering if people currently doing document restatements for safe harbor plans with an effective date 1/1/16 or are you waiting to later in the year to do your restatements for safe harbor plans?

We have a client whose plan we'll be taking over on 7/1/15. The document that I'll be completing for this client is updated to all the PPA,etc regs. The current TPA is insisting that the client sign the new restated document that they have completed and has an effective date of 6/15/15.

My thought is why sign that document when you will be having a new document just 2 weeks later. Never mind the expense.

Also, why restated documents with an effective date of 6/15?

Any thoughts? Am I missing something?