Employer misclassified certain employees for FLSA purposes. So now back wages are being paid for overtime that was never paid during 2012-2015. It is not DOL or court-ordered back pay. Employer found the error on internal audit. Now it is correcting it itself.

I have several questions:

1. For the payments that are made now (2015), should deferrals be withheld? And match be processed? The plan defines comp as W-2.

2. Is EPCRS correction triggered for the prior years? After all, the employees were not paid the proper amounts. This means that the employees missed a deferral opportunity and missed a match on the missed deferrals. Or is the payment of the wages (and liquidated damages) in 2015 enough that correction of prior years isn't needed?

Thanks.

It's simply lovely the level of security to use the IRS Fire submission system. Had Homeland Security been as vigilant, 911 would have been averted.

Hey guys -- How about one user name, password, and if it must be pin number for FIRE, EFAST2, PBGC, ad nauseum. After all, we're generally (except for IFIRE) filing public information.

Sounds like a ridiculous question, but would the values of 5 and 10 (i.e., the end points of the range) be included? So if the plan says:

"For the calendar quarters ending between 1/1/2015 and 12/31/2015 the employer will contribute 15% of pay, and subsequently the employer will contribute 5% of pay." Does the calendar quarter ending ON 12/31/2015 fall between 1/1/2015 and 12/31/2015?

As you can see it could make a big difference. Should I be writing "ending on or between" or is that over-kill.

I googled for about 10 minutes to try and find something on point about this but to no avail. The Dictionary.com definition was not too helpful.

2. intermediate to, in time, quantity, or degree:
"between twelve and one o'clock; between 50 and 60 apples; between pink and red."

We have a client whose plan allows for a discretionary pay period match; and an additional discretionary match at year-end for participants who are still employed at the time of allocation.

No formula mentioned in document, match can be uniform % of pay or a flat $ amount.

We just discovered that the employer decided on 12/24/14 to give a special match to 4 nonHCEs because he wanted to give them a "bonus". The plan document does not allow for a profit sharing contribution - only deferrals and match. Other employees got a match as well (as a uniform %), but these 4 individuals just got random dollar amounts deposited into their match accounts.

While this seems like it might not be permissible, I can't quite determine what rule has been violated? If we take the position that plan has allowed different rates of match, so it is subject to BRF testing, that is a nonissue because these 4 people are nonHCEs. And it helps the ACP test. So I can't see any testing problems with this.

Is this a plan document issue?

Thanks!

Client's 401(k) Plan limits the deferral limit of HCEs to the amount which equals current 402g deferral limit divided by current compensation limit. That number for 2014 would be 6.73% (17,500/260,000).

HCE contributes 10.6%. Plan does not fail the ADP Test but HCE exceeded the

plan imposed limit. What is the deadline for the return of excess? March 15th or April 15th?

The Plan was amended to the sponsor being a company owned (100%) by the eldest son of the owner of the previous sponsor. The previous owner is now an employee but not an owner..Previously his daughters who are also employees were included as Key Employees in the Top Heavy testing. Is Key status still attributed to the sisters for Top Heavy?

My HSA started in June. I am under 55 so the total I can contribute is 6550 for a calendar year for my family. We are likely going to change our insurance come April of this year so I'm just trying to figure out how much I can add to our HSA to max it out.

Since it is split between years does that I mean it's 3275 (6550/2) per 6 month period with the 2nd period being prorated? Or do I prorate the entire amount and since my period started mid-year I can add that total amount anytime across both years as long as I'm still in my plan cycle?

And where the hell can I read up on it to find out?

Thanks!

I have a document which specifically references the definition of compensation in the Definitions. Unfortunately, this definition of compensation excludes commission and bonuses. Two questions -- do I have to perform 414(s) testing and then use that (hopefully passing) compensation for my ACP test? and, do I have a document problem since the definition of compensation is so rigid?

Is a 401(k) plan permitted to only true-up employer matching contributions for plan participants who have hit the 402(g) limit for contributions ? Is there any statutory cite to support that this is possible?

According to the IRS website, it is my understanding that beginning with the 2014 Form 8955-SSA, the forms have to be filed electronically. It also says that you need to use software to create the proper format. In the past for the hard copy I submitted, the information was in the same format (page 2 and beyond) as appears in the 8955-SSA form on the IRS website. Do I still need to use the software?

I worked for Southern Railway system from june 1976 until April 1979 and paid union dues and contributed to the pension plan. I believe that I may have money owed to me but Southern Railway system no longer exists. How can I get information on this?

Company give a $250/month allowance to its employees. If employees benefit premiums come to $300 per month, there is a $50 deduction from their wages. If their benefits come out to $50 a month, they get $200 "bonused" to them as income.

1) I am pretty comfortable that the cash bonus is a taxable fringe benefit (although I know not everyone will agree, perhaps).

2) I am much less comfortable with the following question: If the employee spends the $250 per month, is the $250 considered wages for purposes of 415 comp OR is it employer paid medical benefits which would NOT be comp.?

Client had DOL audit and is filing a VFCP with the DOL. Do they also have to file SCP with IRS for the same issue (late remittances)?

We run all our DB valuations as of the beginning of the plan year. Asumming plan year is calendar, with 01/01 and 07/01 entries and 1,000 hrs required for accrual:

Q1 - should a mid-year entrant (07/01) with over 1,000 hours receive an accrual for the year?

Q2 - if not, should that mid-year entrant be included in the testing with 0% benefit?

Our company has done much better than expected in the first 6 months. As a result, we are able to and want to contribute the 4% profit sharing portion to all our employees.

Unfortunately we elected 1 YOS for profit sharing eligibility on our Safe Harbor 401k plan.

Any other options for us to be able to provide this contribution across the board to our employees?

I am processing a 401k hardship distribution for a participant who normally contributes the elective deferral max each year. There was a regulation that stated an employee's annual cap on elective deferrals for the year following a hardship distribution is reduced by the amount of elective deferral contributed in the year the employee received the hardship distribution. I do not see this requirement in the current regs. Was it repealed?

We have a plan that is considered a Davis Bacon plan. The company made QNECs as part of the prevailing wage arrangement some HCEs and NHCEs. I understand that up to 10% of compensation can be used for NHCEs in the ADP and ACP tests, however, do the QNECs for HCEs have to counted in either of those tests as well or can the HCE QNECs be ignored for testing purposes?

For plan purposes when does an owner (stockholder) actually "terminate"? The owner in question has not disposed of his shares, so still owns more than 5% of the company. He has, however, stopped taking salary and is not sharing in corporate gain/loss. I still need to confirm if he is actually performing any services, but for this scenario, let's say he is not. At what point is he "terminated"?

Thanks

I know I have seen this question before & probably even asked it myself!

Background: plain 401(k) profit sharing plan

the over age 50 owner made $22,669.18 in 401(k) contributions

the ADP test passes.

there is no match in the plan

computing the profit share contribution to maximize the owner using a cross tested formula.

The 2014 individual limit is $52,000. with $5,500 401(k) catch up, $57,500.

Since this owner only made $5,169.18 in catch up contributions is his total allocation amount limited to $57,169.18 or can he still get to $57,500?

I know it's not much in this instance but I want to do it right and get the client as much as possible.

thanks in advance!

I am sick of sponsors that insist on allocating matching contributions to participant's accounts over the course of the year AND insisting on having allocation conditions (last day, 1000 hours, or both)! I am looking for support for the propostion that allocating a match to participant's accounts before the allocation conditions have been met is a Code, Reg, or IRS or DOL Guidance violation.

Any thoughts?