Client has a safe harbor KPlan…does not permit rollovers[i took over without a document restatement]. They are terminating their CB plan in a month or two and want to roll CB distributions to KPlan…100% of ees [a small number] want to do this.

The Safe Harbor notice of course doesn’t mention a Rollover Employee account.

Is a rollover a “Contribution” subject to the notice, in which case we cannot amend the KPlan to allow rollovers or is there wiggle room here…is there any way to classify the incoming $$ as a trustee to trustee transfer?

It seems reasonable that a Plan could add Rollovers. That is not an Employer Contribution.

Thanks in advance.

--

What is the reasoning behind the regs counting a Key employees balance going towards Top Heavy status even after the Key has been paid out? The Key is still employed but is no longer participating.

3% Maybe Safe Harbor Plan.

The employer wants to notify participants today that the plan will not be safe harbor for 2015.

Any issue with this notifciation at this time?

Since the decision was made not to be Safe Harbor, can the employer amend the plan mid year and change the default cash out provision.

Thanks

First 10 years plan covered owner and common law employees.

10 years ago all common law employees terminate employment and are paid out leaving only the owner with a balance.

Now preparing delinquent 5500s for last 10 years and question is has the plan become a "one-participant" non-ERISA plan eligible to file 5500EZ or does it remain an ERISA plan and need to (able to) file 5500SFs under DFVC?

Apparently each segment rate used in the calculation can be an average over certain lookback months immediately preceding the stability period ; and if the plan had been amended to adopt this new methodology , then for a year following the amendment lump sums are determined using pre-amendment methodology , if greater.

Could someone provide a cite(s) supporting this ?

Thanks , in advance to those who respond !!!

Is the employees DOH the only allowable entry date? Can it be the first day of the month following the DOH? If the plan excludes employees who normally work less than 20 hours a week, when would employees who work less than 20 hours a week then start working more than 20 hours a week enter the plan?

If a participant enters the plan but receives no compensation because the first payroll date has not occurred yet in December, do they count against you in the 401(a)(4) test for purposes of the gateway? I would think $0 compensation would be a $0 contribution and thus not impact the test.

Any thoughts?

A participant retired12/31/2013 and was paid 1/2/2014. The participant deferred, matched and received PS on the compensation paid 1/2/2014. The plan uses the standard 415 compensation definition allowing for post-severance compensation paid up to 2 1/2 months after separation from service or the end of the plan year. An argument could be made that they should be included in ADP & ACP testing because their compensation was includible under 415. An argument could be made that they should be excluded from the test based upon them not being an employee in 2014. Would anyone be willing to comment on whether they be included or excluded from the 2014 ADP & ACP testing? They are an HCE and I'm looking for a valid reason to exclude them.

Can someone point me to the source that a plan administrator has a responsibility to contact terminated vested participants upon their reaching normal retirement age?

Thanks!

If an employee takes a loan from the ROTH portion of their 401K, is the interest payment portion of the payback not taxable since ROTH profits are not taxable?

Large 401(k) plan, ADP test failed and corrective distributions made to 124 HCEs. Subsequently it was discovered that a change in compensation and deferral amounts was needed to a few participants, including 2 HCEs. Once the test was re-run, this changed the results. Two additional HCEs now need refunds (no problem here), and 123 HCEs had been distributed too much. Most of them the excess amount distributed was about $65.

Does this need to be corrected?

Employer has a SIMPLE-IRA, but inadvertently excludes an employee for all of 2014. This will be corrected in 2015 via a make-up contribution. Is employee an "active participant" in a plan for 2014 for determining deductibility of any IRA contribution?

Unless I'm off base, under 1.219-2, it is the later of the date the contribution is made or allocated. So since made - or will be made in 2015, then not an active participant for 2014. Any other thoughts?

I am a plan sponsor and administer a 401(a) plan with a 401(h) feature. (The 401(a) is a money purchase plan, though it allows employee after-tax as well as employer contributions.)

My question... Are allocations to the 401(h) account limited to a portion of current year contributions taking the incidental benefit limit into account? (This is how the plan is currently administered.) Or, with the appropriate amendment, can an employee transfer accumulated contributions from the inception date of the feature from 401(a) accounts to 401(h) accounts all at one time (still taking the incidental benefit limit into account)?

In other words, this feature has been in effect since 2004. If an employee had a total of $100,000 in contributions from 2004 to the present and had never participated in the 401(h) feature, could he transfer $25,000 to his 401(h) account in 2015 regardless of his 2015 contributions?

In researching what little information I can find on 401(h) accounts, I see references to transfers in DB plans, but nothing specifically referring to a DC.

Any words of wisdom (and cites to go along with them) would be most welcome!

Hi All,

Long time reader, first time poster. If I am trying to do a tax free 60-day loan from my IRA by withdrawing $X from my IRA on Day 1 and redepositing $X on Day 60, can my repayment on Day 60 consist of roll over or transfer proceeds from a qualified employer plan? Any insight (and citations!) would be much appreciated.

The employer is part of a controlled group. The primary plan sponsor uses a fiscal year ending 9/30 and the plan year is the same. The adopting employer has a calendar year and is using the plan as a calendar year plan. This has been going on for years. The plan is also cross tested. The plan's definition of compensation says "use the plan sponsors fiscal year" which might make using 12/31 compensation for allocation purposes for the adopting employer okay. There is no definition for testing compensation. The fiscal year plan has dual entry dates; the adopting employer (who has a calendar year fiscal year) has dual entry dates of 1/1 and 7/1. None of this is stated in the document, only the entry dates for the fiscal year plan. The plan uses entry date compensation. I think this plan document and plan has problems if they were ever examined by the IRS. Anyone ever had something like this? And am I really off-base? And something like this is okay?

For 2013 an employee received W-2 for $105K and a 1099 for $25K. Is he a HCE for 2014 testing purposes?

Thank you.

Participant is a member of an excluded class in the document. After getting "promoted" to an eligible class, they are going to be eligible for a top-heavy minimum. Can I use comp while eligible in this scenario? What if they went the other direction, eligible class to an ineligible class?

In other words, can I always limit the top-heavy contribution to compensation earned while not part of an excluded class?

I tried to find a spot-on reference in the document and in the EOB but couldn't find anything...

So go and celebrate at 1:59

even if the ADP tests aren't finished.

I operate a non-profit corporation in Texas. We have a single full-time employee who has purchased his own health insurance policy for his family. I was told last month by a CPA at the Texas Ministry Conference that employers with 1 full-time employee do not have to include the amount of health insurance premiums paid as taxable wages. I cannot find anything online to corroborate that.

If the premium reimbursements are tax-exempt, are they exempt only from income tax or also from FICA tax?

Thanks for reading.

I have been a Relius user for 20+ years.

I recently downloaded the 2014 forms. To my surprise, I cannot print the forms or save to pdf. Worse, there does not appear to be an IFile option.

Would someone who is more familiar with Relius please comfort me by saying these features are coming in a future release.