Does a person who has a self employed 401-k (This is the term Fidelity uses) have to file a form 5500 if the assets are less than $250,000? Is this rule different than if a person has a traditional 401-k with multiple participants?

I have a plan where the Plan Administrator is the Trustee - common enough. However, this person is not the plan sponsor, as he does not own the company sponsoring the plan.

The plan sponsor entered into an agreement with a management company (MCO) to take over operations of the company (and eventually purchase it sometime in 2015 if all goes according to plan) back in November 2014. MCO then decided that effective 1/1/15, all plan contributions would be made into their plan (which is a MEP).

The Trustee heard about it when the fund platform for the "old plan" asked why they hadn't received a payroll deposit yet in 2015. Suddenly all this was uncovered.

The Trustee claims that he had no knowledge of this happening, and is demanding that the 2015 contributions go back to the "old plan" because as Trustee and Plan Administrator, he is still responsible for that money and he didn't authorize it. MCO says that they are in the right (well, of course they say that) and that it was part of the responsibilities they assumed when they took over management in 2014 - they let it continue as it was through the end of 2014 and then switched it at the beginning of the new year.

My first reaction was that as long as the actual original owners of the company signed a resolution to allow the company to adopt MCO's plan effective 1/1/5, then this is OK, and it even makes for easy testing. But then what exactly is the role of the Trustee/Plan Administrator? All responsibility but no power?

Thanks for your advice. Any links would be greatly appreciated (not that I don't trust your responses, but so I can provide them to the players involved).

Any thoughts on whether or not excess revenue can be used to offset employer match? I'm assuming no; I know the DOL prohibits the use of excess revenue for settlor expenses, but can't find anything definitive regarding the use of the money for match. Thanks...

Does anyone know when the Federal or State exchanges will be sending out notices to Employers that an Employee received a premium tax? The employer is given 90 days to reply that they offered affordable and minimum value health coverage.

How should the reporting be done on a 1099-R when the participant takes a distribution of corrective deferrals (over the 402g limit) after 12/31 and the deferrals had a net loss? I understand that only one 1099-R is issued and that the total amount (net of losses) is distributed to the participant with a separate statement noting that the participant will be taxed on the entire excess deferral amount in the previous year and he can take a tax deducation for the losses for the year in which distributed. However, which code should be used on the form? Should it just be code "P"? It doesn't make sense to me because the amount taxable in the previous year (which is the excess deferral amount) is greater than the amount actually distributed. Could someone please clarify?

A plan sponsor of a calendar year plan is insisting on 2014 being the final plan year and wants the 5500 to reflect that. However, all the plan assets were not distributed until the second week of the current plan year. I am of the opinion this would be a red flag since participants would be receiving 2015 1099's on a plan that did not file a 2015 Form 5500. The sponsor is just not wanting to pay another year of admin fees.

I know there are only a few reasons a Safe Harbor Plan can be amended mid year. But, could an amendment to remove a Participating Employer who has closed the company be made mid year?

Company fiscal years were 9-1-12 to 8-31-13 and 9-1-13 to 12-31-13.

Plan fiscal years were 9-1-13 to 8-31-14 and 9-1-14 to 12-31-14.

With the prorated 415 limit, the owners are really held down for this 4 month year. Can they still make a contribution for the Plan year ending 8-31-14?

Hi. Employer has a Dependent Care FSA. Employee signed up in 2014, thinking that this was for a dependent's medical expenses. Thus, no child care was used and Employee does not have any dependents at an eligible age for dependent care FSA dollars. Is there any way to refund the 2014 dollars to Employee and tax them? Or is Employee out of the luck and the money is forfeited to Employer just like any unused portions would be?

Thanks.

Say an ER failed to allocate a matching and profit sharing contribution to an EE. Would the corrective allocation be subject to earnings?

I think that it would be as Section 6.02(4) in EPCRS says that correcive allocations are adjusted for earnings.

Another argument i have to support this is that the whole purpose of a correction is to put the EE in a position to where they would be had the error not occured.

Thanks!

I just want to confrim that a partner hired in late 2013 (did not reach $115k in wages) would not be considered HCE in 2015 if they received gauranteed payments in 2014 over $115k. This partner is entiitled to less than 5% of the company profits and capital.

Suppose that in 2016 or 2017 the IRS decides to mandate the use, for minimum funding and for lump sum calculations, mortality tables based in some fashion on the new Society of Actuaries mortality tables. Does anybody have any comments, yes or no, on what they expect with respect to the following?

1. Will the IRS tables include mortality improvements up to the year to which they apply, with no further mortality improvements for subsequent years (i.e., project mortality for 2018 to 2018 but static thereafter)? Or will the mandated mortality rates involve projected mortality improvements all the way out? The currently mandated tables do not require future mortality improvements for funding and do not involve future mortality improvements for lump sum determinations.

2. Is it safe to assume that the mandated lump sum mortality table will be a 50/50 unisex version of exactly the same sex-distinct mortality tables mandated for minimum funding? That is, both with assumed mortality improvements stopped at the current year or both with assumed mortality improvements all the way out?

Any other thoughts on the subject?

I am working on a Plan that ceased a safe harbor enhanced matching contribution before the 2015 Plan year and implemented a new discretionary matching contribution subject to vesting. for the 2015 year.

The discretionary matching contribution is the same formula as the enhanced safe harbor matching contribution.

Consequantly, one of the people I work with expressed the opinion that the change is really an amendment to the Plan's vesting schedule 100% vested matching contribution to a match subject to a vesting schedule.

As a result, he believes that participants who had previously received safe harbor matching contributions would have to be given the choice between a 100% vesting schedule and a 3-year cliff vesting schedule.

I don't think that this is correct.

I think an adp safe harbor contribution is by it's nature a 100% vested contribution and a non-safeharbor match is subject to vesting. If the employer decides to implement the safe harbor again it will of course be 100% vested.

Any thoughts?

The Church has a DB plan that was updated in 2011. It is a non-electing plan. They are currently amending the plan and I mentioned providing a SMM to participants. They would prefer not to have to do that since they are not covered by ERISA, and I don't know the answer. I don't know if an SPD was ever provided, or if it should have been if it wasn't. Your guidance would be appreciated.

How are voting shares and non-voting shares treated when figuring out controlled group issues.

Are only the voting shares considered? Are the total shares combined for consideration? Do you compare all the voting shares seperately from the non-voting shares?

Any help on this would be appreciated.

Potential client apparently wants to adopt 401(k) in 2015, but already mistakenly allowed deferrals into their SIMPLE-IRA plan. I don't have any dollar amounts available, but I believe they are small, as only one payroll deduction for January in a small company.

Now, RP 2013-12 says this can be corrected under VCP - filing fee of $250, plus the 10% if the assets are retained rather than distributed. I'm interested in any thoughts on the following:

1. Any thought on retain vs. distribute?

2. It isn't clear from the instructions - is the employer still required to make the match? I would presume so - and if so, is it deductible? I would presume not, as this would be an "excess" contribution? (I changed my mind - if the correction is approved, it should be deductible, I think)

3. Is it necessary to request a waiver of excise tax under 4972? If the entire amount of the match, if required, is a nondeductible contribution, then it would seem like requesting the waiver would be routine? (if I'm correct on 2 above, this is N/A)

4. Tax consequences, if any, to the participants, if the deferrals are retained rather than distributed? (none, if 2 above is correct)

5. New edit - does anyone consider the SIMPLE as Plan #001, 002, etc.? For example, if someone previously had a SIMPLE, and properly terminated it, then establishes a 401(k), do you count the 401(k) plan as Plan #001, or 002? Reason I ask is that the Revenue Procedure asks for the Plan # of the SIMPLE, and I would not normally have assigned it a Plan #.

Any other thoughts? I've not actually seen one of these until now...

P.S. another thought that occurs to me - how does all this tie in with the "requirement" where the IRS says that in order to terminate a SIMPLE, you must notify the employees prior to November 2. I would say that the existence of the "fixes" in this Revenue Procedure override the IRS information on their website - otherwise, an employer that fails to provide the SIMPLE notice can't establish a 401(k) for the following year, and has no recourse if they do! But it does seem to bring up a strange inconsistency - if you have a SIMPLE, and don't give the advance notice of the termination, you are theoretically stuck with it for all of the next year. If, on the other hand, you just establish the 401(k), then you can fix this with IRS blessing under RP 2013-12.

???

Public employer calculated the mandatory pick-up contributions for one employee based on the wrong definition of compensation (definition varied based on date of hire, and when he was rehired, his rehire date was in record rather than his original date of hire). So contribution was smaller than it should have been for some period of time (since adjusted prospectively).

Is anyone aware of guidance - or informal IRS statements - addressing this kind of situation and whether the employee needs to make up the contribution or whether the employer can simply absorb the cost for its error? The error was in no way the employee's fault.

Does anyone work at an organization that provides a loan repayment or assistance type program? I am aware of some programs that forgive a loan after a period of time when one works in a public service position (i.e. teacher, medical professional) but am wondering if this is trending in the for profit environment.

Not sure where to have posted this question. This seemed to be the best category.

Thanks.

This isn't particularly a 5500 question, but it is directly related to determining what to fill in on the 5500, specifically for Business Code.

Non profit's main business is community service. To fund this service, they created a taxable entity/subsidiary which employs the bulk of the employee population at a restaurant. Question is which one takes precedence for Business Code - restaurant or non profit (813000)?

An organization that for all practical purposes operates like a chamber of commerce, would like to be able to sponsor a retirement plan document for its members. I am not talking about a multiple employer plan. The ERISA Outline Book says that a Sponsoring Organization is usually a bank, TPA or law firm. It's the word "usually" that makes me think that other types of businesses might be able to do the same thing. They are hoping to retain the services of a TPA firm to help with the administration, but they want to use their own plan, not the TPA's. Any thoughts?