I have a Cash Balance plan (not covered by PBGC) that is terminated an currently underfunded.

1. There is an emeployee that used to be an HCE, but is no longer an HCE - can we reduce this employee's benefit (pro rata) based on account balance?

2. Do we need to have the owners sign waivers to reduce their benefit?

3. Are we allowed to just reduce all participants benefits pro-rata?

Hi,

I have a DB plan where the form of benefit is a QJSA. The soon to be former spouse does not want the QDRO benefit and just wants the money to go to their children. Can they do this since its a QJSA?

I'm a bit confused on the difference between "In Plan Rollover to Roth" and "In Plan Conversion/Transfer to Roth"

Anyone have a quick cheat sheet or link that explains the difference between the two and whether you would want to add one, the other or both to a plan when adding ROTH contributions to an existing 401(k)?

I have a situation where a couple of employees terminated 2-3 days prior to their actual entry date. The plan defines compensation to include post-severance compensation. These employees' final paycheck was paid after what would have been their entry date. Since the pay date fell after their entry date, the client withheld 401(k) on the final paychecks from these employees either because the employee made an affirmative election, or they did not opt out of their auto enroll. Was the client wrong for doing this? (i.e., would these be considered ineligible deferrals?).

I am one of two HCE's in a 50 person company (the other HCE is our owner). I work in business development and have made a lot of money over the last several years. However, our owner, and his outside financial advisor (who he defers to on matters like this) simply will not Safe Harbor our 401K plan. The problem is that most non HCE's don't contribute. For the last four years, we have failed the ADP test and I've gotten considerable refunds at the end of the year (both from what I have contributed and what my employer's matching contribution).

I was just told by my owner's financial advisor that since we failed the ADP test again this year, I will be capped at contributing $10,000 this year (instead of the max of $18,000) and the employer match will be capped at $9,000.

My owner's refusal to safe harbor my plan is annoying and I'm at the point where I am considering working for an employer where I won't have this issue. I do very well there (I've made between $300-$400K over the past few years) and wouldn't make as much elsewhere, so wanted to get outside advice on what else I should do here? I max out both my individual IRA and my wife's IRA ($5,500 each year) and I also contribute healthily to taxable mutual fund and stock accounts (and also to a muni bond fund as well).

It wasn't so long ago that interest rates meant interest was being paid.

I was told an EA conference speaker mentioned that when applying the 31% deduction limit for a combo plan, that you can only use the participant's compensation if they are receiving an employer contribution in either plan. For example, I have a plan that is not Top-Heavy and they are not giving the HCEs an employer contribution in either plan but they are able to contribute 401(k). He is saying I would not be able to include their compensation when calculating the deduction limits. I wanted to use the 6% limit on the profit sharing contribution. The HCEs are not excluded they are just in their own class and get 0%. Would I not be able to use their compensation in calculating the maximum deductible contribution?

Plan sponsor matched on HCE's full comp for 2014 and probably prior years. Resulted in excess of $4536 in 2014. Should this have occurred in prior plan years would SCP be allowed? There are really only family members in the plan. Would corporate tax returns need to be amended?

Thanks

Excuse me...not 401(a)17 but 408(p)(2). Does comp limit apply to SIMPLE IRA match or just Non-elective?

Does anyone have experience in regards to filing under the DFVCP due to a late top-hat filing. In a DOL FAQ (http://www.dol.gov/ebsa/faqs/faq_DFVC.html) it states that the 5500 can be filed either electronically or on paper. However, later on in Q18 it states that "the Form 5500 prepared for DFVCP purposes should not be filed with EFAST2." How do you submit it electronically, if you cannot use EFAST2? Thank you for your assistance.

Plan allows safe harbor hardship.

The participant is in the process of building a primary residence.

Can he request a hardship for the building of the home. Does the "purchase of a primary residence include building a home?

Thanks

Maybe I'm just too nitpicky, but I got two QDRO's in one week (both from Oklahoma, I think there is a connection here!) where the award is worded as follows:

"50% of benefits accrued during the marriage, plus or minus any gain or loss on the award up to the date of distribution..."

To which I responded to the attorneys, "That's just cooky. If you meant to say 50% of the account balance as of a date, you would have just said that."

So what does this language even mean? For example, It seems to me that I would need to add back any distributions because the award is 50% of the BENEFITS ACCRUED adjusted only by gains/losses.

Oh, and what happens if I don't catch a break, and they were married AFTER participation in the Plan began. That would be buckets of fun.

Is this an Oklahoma thing? I've been reviewing QDRO's for a long time and its first time I've seen this language.

I imagine this question must have come up before, but I cannot seem to find an answer. Plan passes ADP testing (by virtue of reclassifying Excess Contributions as Catch-up), but plan also fails ACP testing (document has fixed match calculated annually). Document does not have verbiage to reduce match to HCE's in order to pass the ACP testing. The match will not actually be deposited until after March 15th. Do I have to wait until after it's deposited to process the refund - hence the client incurring the 10% penalty?? It's a fixed match, so they definitely have to and will be funding the match. It's accrued in each employee's account balance as of 12/31/14, so does that make it part of the participant's account balance to the extent we can refund it out of the participant's non-accrued money?

Hello,

I need some guidance. I began working for a company in November 2006. I received my first ESOP statement in 2008 for 12/31/2007. I had 40k in the account on the statement. For period ending 12/31/2008, I had 44k. I was let go in June 2012 due to layoffs. The company was not financially sound. They did not file for bankruptcy. They restructured internally. No loans assumed.

Since the 12/31/2008 statements were released, the ESOP has not released statements to any of the participants.

I have managed to locate the 5500 filed annually with the DOL and the ESOP does still exist. It is not abandoned. So I started emailing my previous employer asking for the 2009-2013 statements on a very regular basis. They finally mailed me 2010-2012 statements just this week.

Herein are the problems I have aside from ESOP participants still not getting information, annual statements, or plan summary descriptions following ERISA.

1.) They have not supplied me my 2009 statement.

2.) The 2010 statement shows I have a beginning balance of shares. The statement also shows the value of those shares is zero.

3.) The 2011 statement shows I have over 2000 shares still yet the value of those shares is zero.

4.) The 2012 statement shows I have over 2000 shares still yet the value of those shares is zero.

5.) The 2012 statement also shows my vesting percentage as zero which is not correct. The previous statements show my vesting percentage as 100% which is correct.

6.) I've also requested summary plan descriptions/annual reports for the years 2009-2013.

7.) What occurred during the year of 2009 where my account dropped from 44k to zero?

8.) I do recall when I worked for the company that one of the owners withdrew $1,000,000 out of the bank on 12/31. I suspect he may have drawn retained earnings down to zero so the company had no cash or equity.

I've spoken briefly with the DOL, they will investigate, I just have to give them a copy of my email threads requesting the docs and a copy of my statements. I've also spoken to one of the VP's (an old friend who is still there). He said I should nail their butts to the wall. He had over 100k in the ESOP. Given all the info above, my gut feeling is there may be criminal negligence here but I really have no idea. At a minimum fiduciary responsibilities appear to have been side stepped.

Do you folks have any suggestions other than to say I'm up a creek here without a paddle? What would cause my account value to drop 44k to zero within one years time?

I have a balance forward plan with pooled accounts at LPL Financial. Each participant receives their own statement. When forfeitures occur, instead of having a separate forfeiture account, they put the money into the owner's account. I have tried convincing them they need a separate forfeiture account to no avail. They don't want to pay for an account that isn't active. Isn't this a problem for the plan? Forfeitures are supposed to be allocated yearly. Is there regulation I can quote to convince them to have a separate forfeiture account?

Thanks in advance.

Hypothetically speaking, with names changed to protect the innocent, I find myself somewhat befuddled by an RMD quandry. Say Sally Strothers is a "5% Owner" of Company A. Since she has turned age 70.5 in 2014, she must receive her first RMD before 4/15/2015 from her account under the Comapny A 401(k) Plan.

In the middle of 2014, the Company A of which she is a minority owner (> 5% though) is sold to Company B under an asset purchase. Sally elects to have her monies rolled into the 401(k) plan of Company B.

During 2014, before any RMD is paid to her, Sally's entire account is transferred to the Company B 401(k) Plan. It should be noted that all of the Company A 401(k) Plan is liquidated before 12/31/2014, and we were not involved in that processing.

Clearly the RMD Monies should never have been rolled into the Company B 401(k) Plan, but they were. To "correct" this problem we are having the RMD paid from the Company B 401(k) Plan before 4/15/2015.

The question is, since Sally is NOT a 5% Owner of Company B (she is just an employee), and she is not terminated from the service of Company B, does she need to receive additional RMDs from the Company B 401(k) Plan.

I believe the answer is no since she is not a 5% Owner under the new plan, and her status is active employee, so no RMD is required. Of course, the RMD that should have been paid from the Company A 401(k) Plan needs to be paid. Does a 2015 RMD need to be paid?

Thanks for your insights!!!

Is a salary reduction only plan required to have a SPD, plan document, etc?

If a plan decides to make the safe harbor match to HCEs, must they make them to all HCE?

Employee 1: 20% owner

wife of Employee 1: 20% owner

brother of employee 1: 20% owner

wife of brother: 20% owner

mother of Employee 1: 20% owner

This is a C-Corp, with 1 employee (20% owner) as the only W2 employee. None of the 4 other owners participate in the 401k nor do they draw any pay. Use form 5500 or 5500ez?

Any reason why a 403b plan cannot contribute more than the max deductible? So two people make $100,000 each. Can they each get $50,000 in profit sharing? That's 50% of comp.

I'm inclined to say no because, duh, they are not deducting anything. But the closest I can come to guidance is through the process of elimination. I want something more concrete, like a McCay Hochman article or an IRS FAQ. Anyone?

(assume reasonable comp is not an issue as that is a matter for the CPA to address and not me!).

Controlled Group A (a controlled group with 3 companies X, Y, and Z is downsizing) and sells the assets of company X to Employee M who is employed by CG A but has no ownership in any of X, Y or Z. This happens December 2013.

Employee M starts a new Company B where he is 100% owner and hires all of the employees of company X on 1/1/14.

Company B establishes a plan 1/1/14 with identical provisions of Plan A and grants past service with CG A to all employees for eligibility and vesting.

Controlled Group A spins off the employees of company X in Plan A into Plan B.

No employee in Company B earned over the comp limit in 2013 to be an HCE of Company B in 2014 but several who were hired by Company B on 1/1/14 earned over the comp limit in CG A in 2013 and would have been HCEs in CG A but for the asset sale and transfer to Company B.

Both plans A & B and all tax payers B, X, Y & Z are on the calendar year.

Am I correct that Employee M is the only HCE of Company B in 2014? There are no other more than 5% owners employed by B.