We have a situation where an entity is requesting documents/appealing a denial of a claim. The entity attached a form whereby the participant designed and assigned his/her rights to the hospital. However, the hospital was not the entity making the request, so we told the entity sorry, you aren't the authorized rep, the hospital is, then the entity sent us the fee arrangement between it and the hospital for collections, etc. I'm still inclined to say sorry - this is not sufficient to demonstrate the participant named your entity as the authorized rep... in fact, participant named hospital, not you. Thoughts??

We a plan that funds the 3% SHPS contribution each payroll period. All compensation is used, in other words they are NOT excluding comp prior to plan entry.

Are there any problems if the client waits until the end of the plan year to true up new hires 3% safe harbor. Right now they start the 3% upon plan entry and then we calculate the true up.

However should we require them to true up the 3% from the beginning of the plan year as soon as the participant enters the plan?

For purposes of purchasing an annuity under a plan termination that meets the "safest annuity provider" conditions, what is the experience on the commission percentage or flat fee that brokers charge for a small population?

For example, for a plan with a liability of less than $1 million, what type of charge could the plan expect?

If the liability is between $1 million and $5 million, would the rate be the same?

I have seen 6% commission in the past but have not processed one through a broker for a while. Thanks!

non profit company that files Form 990 as 501c3 did not submit 5558 to extend their medical plan 5500. question is, is there such a thing as an extension on form 990 that would allow said company to check off 'automatic extension' and not file under dfvc? (case in question would be due 4/15/15)

PYE = FYE = 6/30

EE attains age 70 on 8/xx/2014

EE attains age 70.5 on 2/xx/2015

RBD is 4/01/2016

First distribution year would be 2015 if RMD applies

EE has owned 100% of stock in the past but sells all of his stock. EE continues on as an employee of the company.

By what date must EE be a less than 5% owner to not have a required minimum distribution from the plan as a non-5% employee?

1 - 6/30/2014 (the last day of the prior fiscal year - so no ownership in the plan in PY 7/1/14 - 6/30/15; the plan year before he turns both age 70 and 70.5)

2 - 8/xx-1/2014 (the day before his 70th birthday)

3 - 12/31/2014 (the day before the 1st calendar distribution year)

4 - 2/xx-1/2015 (the day before he attains age 70.5)

5 - 3/31/2016 (the day before his RBD)

6 - some other date I haven't considered.

I think the answer is 3 - the day before his 1st calendar distribution year but I'm not sure if the the Fiscal Year being 6/30 and not 12/31 changes that. Also I'm having trouble finding the specific citation in the 401(a)(9) regs which I'm about to go through again but if someone knows it off hand, thanks in advance.

I had my doubts when I first heard about this as I was under the impression that when a participant is due their first RMD and they delay it until the 4/1 of the following year that they must take a 2nd RMD in that same year by 12/31. It seems that most others who monitor this kind of stuff also believe this to be the case.

However, it was recently pointed out that to me that 1.401(a)(9)-6©(1) says "Annuity payments must commence on or before the employee's required beginning date (within the meaning of A-2 of § 1.401(a)(9)-2). The first payment, which must be made on or before the employee's required beginning date, must be the payment which is required for one payment interval. The second payment need not be made until the end of the next payment interval even if that payment interval ends in the next calendar year."

So it appears that if a participant must take their 1st RMD no later than 4/1/15 (i.e., the RBD), the second one wouldn't have to be taken until 12/31/16. I'm wondering what others' take on this is since so many of my colleagues haven't been using this approach.

A client has a safe harbor plan. The current eligibilty is immedite but they would like to switch to 6 months. Can we amend the plan for 2015 and have it be effective 7/1/15 so it does not affect any current employees?

I know you "can't" amend a safe harbor plan, but since we are not reducing or suspending the contribution, I was thinking we could do it.

I am potentially in a big mess with my retirement accounts. I opened a 5305-sep ira in 2013 and put in $4k. I'm a sole proprieter with no employees. Before the year end in 2014 I opened a solo 401k. Then:

1. On 8 Jan 2015 or so mailed a check for $10k and contribution form for my SEP IRA to post as a 2014 contribution

2. on 12 Jan 2015 or so mailed a check for $8k and contribution form for my 401k employee deferral and marked it as a 2014 employee deferral contribution.

There is a big debate about 5305-sep IRAs and whether you can have them at the same time as a solo 401k. I'm not convinced I can't. In particular the wording is unclear whether the requirements to use the form are when the sep is set up or whether it is on going. Eg to adopt means to take on at a specific point in time. So I adopted the SEP IRA in 2013 when I didn't have a qualified retirement plan.

I was wondering what everyone thought about the situation and whether there are any easy fixes to just circumvent the issue entirely.

EG

Currently I have $18k deduction for sep/qualified plans in 2014. I have submitted my return for 2014.

I could take my sep ira deduction in 2015. Contribute $10k in my 401k for 2014 as an employer deduction (I believe I have until the 15 April). So the IRS will see

2014. $18k deduction for sep/qualified retirement plans

2015 $10k SEP deduction with a 2015 5498 showing $10k. I don't plan to contribute to the 401k for 2015 in this situation.

That way I didn't take a deduction for both for the same tax year.

Doing an SE calc for a Schedule C / 401k Plan, but they also sponsor a cash balance Plan. How are the contributions to the plan deducted? I assume they are NOT deducted the same way as the 401k employer contriubtions (i.e., on page 1 of 1040) but rather as a business expense to arrive at net income?

Can someone confirm?

Do you still have to compute allocable income on distributions of excess deferrals?

Does this QNEC contribution for the missed deferral opportunity of one nonekey remove the Top Heavy exemption for the plan?

An existing client roughly 2500 employees is adding auto enroll to the 401(k) plan. Plan entry dates are January 1 and July 1. The vendor recordkeeping the plan says that they need to have the upcoming eligible census data each year no later than May 31st for a July 1st entry due to timing issues and the auto enroll information they will be sending out to the newly eligibles.

The client has people hired in June of 2014 that are "borderline" as to whether or not they will make the 1000 hour requirement for eligibility by their anniversary date. We won't know until we have the census info for June, which of course is after the deadline of the vendor to set them up for July 1st entry.

Once we do know who met the eligibility the vendor still needs ~30 days to send out the notifications, which would put the new enrollees past the July 1st entry date.

I anticipate we're going to have this same issue each approaching future entry date due to the type of business this is and the employee demographics.

What's the best way for the client to handle this and have others seen this issue? Or am I missing something easy and obvious?

Employer has an existing severance pay plan covering all employees for both involuntary and voluntary separation from service. Plan does not qualify for 2 /2 separation pay plan exception because it pays on voluntary termination as well as involuntary.

Lump sum severance benefit is service-based and terms comply with 409A. Plan also provides that employer will pay COBRA premiums (again for ALL employees) for the period used to determine severance (and this is always shorter than COBRA continuation period).

They now want to eliminate the health coverage continuation premiums and instead pay an additional lump sum benefit at the same time as the existing lump sum benefit. Not trying to get out of paying employees, but want to make it easier to administer and they envision that the company may stop offering health insurance altogether as it winds down operations.

The medical coverage should be exempt from 409A - meaning it isn't deferred compensation because it is a nontaxable benefit (or in the alternative, qualifies under the Medical benefits exception for separation pay plans that limit reimbursements to the COBRA continuation period.

So I am thinking that eliminating this benefit and replacing it with a lump sum benefit would not be a substitution of deferred compensation that would result in an acceleration because it wasn't deferred compensation in the first place.

Any one see any problems with this approach?

We have a few plans that did not adopt the PPA lump sum rates and instead are on a GATT minus rate. For example if a plan values lump sum based on the 30 year treasury rate minus 2.75%. The February 30 year treasury rate is 2.57%. To value a benefit under this scenario would result in a negative interest rate. We are thinking this ok, but does anyone think there should be a 0.00% floor for this purpose? Thanks in advance for all responses.

I understand that self-directed brokerage accounts are not required to furnish a fund comparison chart for 404(a)5 because the universe is virtually unlimited.

However, what if the trustee is doing something prudent, and following DoL wishes and having a 'suggested" fund lineup along with the open architecture. Do they have to come up with that chart pertaining to only the suggested funds?

If you can point me to where that says that either way, I'd be appreciative.

(I do know that even with an open architecture some sort of Notice is required, albeit somewhat abbreviated.)

Can someone please provide me with the regulations/site that states that safe harbor matching contributions must match catch up contributions.

Thanks,

3/31 Fiscal year end with a 12/31 plan year end.

Client has lots of extra income for the 3/31/2015 plan year and is looking for lots of deductions. What they want to do is max out heir 12/31/2014 contributions, and then contribute/deduct the 2015 maximum in the first quarter of 2015.

I know that one of the requirements for deducting contributions made AFTER the end of the year is that it must be allocated as of a date within the fiscal year. Is the same true for contributions made/deductible before the end of the year?

Safe Harbor 3%, funded each pay-period. I don't think anyone would have a problem deducting this on the 3/31/2015 return.

Full profit sharing. There are 3 other employees. The client essentially wants to fund 100% of the projected 12/31/2015 contributions in the first quarter. There are NO Allocation conditions.

Any way to make that work?

Is there a resource somewhere on precisely how the MPA would be calculated for a large DB plan? We need to get our arms around the potential exposure. Rev. Proc. 2013-12 lays out the basics, but if you try to drill down there are many ambiguities. E.g., the MPA includes the additional tax if the employer deduction is disallowed for contributions--does that include vested contributions (which are deductible even for a nonqualified plan). How is participant income-inclusion calculated for a plan with hundreds of participants? And does the IRS calculate the MPA, or does it merely review the employer's own calculation? Is the MPA estimated based on the Form 5500 alone, or is there a massive review of other documents? Etc.

Thanks for any info.

Interesting question here. Suppose you have a Schedule C filer, single, who is independently wealthy, so works a little but has very little earned income - only, say, $10,000 net Schedule C after deductions and SS tax reduction.

So, defers the whole $10,000 to Roth 401(k). Can he ALSO contribute to a Roth IRA? Although it is counterintuitive, I'm having trouble finding anything that prohibits it. In spite of the Roth 401(k) deferrals, he still has earned income to report on his 1040, right? And if so, I think he can technically contribute to a Roth IRA. But it doesn't feel right! What am I missing?

Edit: I suppose, as I think about it, that this is consistent with a W-2 employee - say that an employee has $10,000 of W-2 income, and defers it all to a Roth 401(k) - the W-2 is still going to show $10,000 as taxable income, on which you could presumably contribute to a Roth IRA? I still have a feeling I'm missing something, but I can't find anything proving it is wrong.

Employer deposited amounts that were "deferrals" for the partners. After year end the K1s report a loss. The "deferral" amounts have to be returned to partners as there is no compensation. The Partners' CPA says that no 1099R should be issued and this is not a taxable distribution. I can see the argument that since the partners received no tax deferred "benefit" from these distribuitons. Money is going to come out of the trust. How is the 1099R supposed to be handled? Thanks.