For safe harbor I know you need to go back and make up for the contributions, however this is a non-safe harbor discretionary Match:

Eligible - 1/1/14

Starts Deferrig - 7/1/14

The client is matchin on the salary from 7/1 moving forward and not going back to "make up" since the deferrals are in excess of the 3% match.

Just confirming no issues? Thanks, having a mental block for some reason...lol

In correcting a loan through VCP for missed payments beyond the cure period, does the accrued interest calculation require the interest to be compounded?

I am considering a 5000.00 Deductible Plan to offer a Long Term Client. The plan will have Office Copays and a Drug Card so it is not an HSA compatible plan. The group has about 90 employees, some of which cover dependents which brings the total number of insured lives to about 120.

The employer would be comfortable in self insuring through an MERP the first 4500 of claims after applying a 500 deductible, so long as he could cap his maximum exposure to as an example 50,000 per year.

Can I find an insurer to cover the potential difference of 120 lives reaching their 4500 MERP limit?

I can envision the MERP or HRA being administered in such a way that at the end of the plan year only, any expenses that exceed the 50,000 self insured portion are submitted at a single time. In other words, the employer pays over the course of the year 75,000 in medical expense and applies their 50,000 first, and then submits the 25,000 on to the reinsurer as a single claim.

One of our clients wants to invest part of his pension in some property owned by his brother. This purely an investment, no party-in-interest transactions as no one in either family will reside there. Purely rental property.

Plan allows for individual accounts, so this is a permissible plan investment. All income will be placed in a trusted checking account, from which expenses will be debited and the rent will be credited.

Question is, how does he set this up? Obviously the property must be owned by the plan.

What kind of paperwork is involved? A standard type of loan agreement, but modified for investments?

If you remember IRS Notice 2014-35, it stated that if you wanted to take advantage of:

a). the DFVC program, with the DOL's (electronic) EFAST2 ,,

b). you had to also PAPER file any related (including delinquent) Form 8955-SSAs with the IRS within 30 days.

It was a package deal.

If you only E-file the Form 5500 Series forms with EFAST 2 under the DFVC, without going back retroactively and picking up any delinquent 8955-SSAs, and PAPER filing them timely with the IRS, the DFVC "deal" was off.

Please note, this additional step relates to retirement plans only, and not to welfare plans.

Unfortunately, the instructions under IRS Notice 2014-35, still say to PAPER file the 8955-SSA, even though the IRS now mandates the E-filing, of many if not all, the 8955-SSAs.

QUESTION: Has this IRS Notice 2014-35 been formally updated and revisited to recognize that the PAPER filing requirement for the 8955-SSA is at odds with the IRS's requirement to E-file the 8955-SSA via the IRS's "FIRE" system?

Took over a new client in late Dec 2014.

Was informed in the first half of 2015, that there was a participating ER.

Can the participating ER sign the Participation agreement in the first half of 2015, retroactive to the first day of the plan's initial year, i.e. 1/1/2014?

Lets assume the client wants/needs the participation of the EES in the participating ER.

Thanks in advance for any suggestions!

I have a cash balance plan with only a husband and wife (they have no employees).

Since there are no NHCEs, does that plan still have to be 100% funded in order for one of them to take a distribution?

My mind is going blank on this, as i thought i knew this.

1. When an employee has an FSA and is on Leave of absence without pay, are they required to make their FSA contributions to keep "current"? Can they if they choose?

2. When the employee returns from unpaid leave, is the employer permitted to "catch-up" the amounts the employee missed?

3. If an employee is going on a leave at the beginning of the month, is the employer permitted to double up the contributions on the employee's pay in order to get the current month's complete deduction?

Thank you,

I am involved in a DB plan termination. A couple of participants are non-spouse beneficiaries who are receiving the remaining portion of a period certain annuity. If there choose to rollover the lump sum value of their annuity, would it need to be to an inherited IRA? Would they be able to roll it over to the company's 401k profit sharing plan?

Any help would be appreciated!

Plan owns $200,000 life insurance policy on participant with $50,000 CSV.

Participant dies and surviving spouse makes a direct IRA rollover of $50,000 and receives $150,000 cash distribution.

Does the plan issue 2 1099-Rs, one for the direct rollover and another for the pure life insurance proceeds?

If so what code do we use on the one for $150,000?

Many thanks in advance.

Let's say a participant contribution a total of $100 in a 401k plan in Roth contributions. The participant takes out a distribution and is charged with $50 distribution fee. How should the Roth basis be reported on 1099-R? Is it the total $100? Does the $50 distribution fee count as a loss?

A plan has the following elections in the adoption agreement:

- Employer elects to match actual elective deferrals made on a payroll basis.

- The employer elects to true up safe harbor matching contributions made to the plan on the above basis.

The Matching Formula is: Matching contributions will be made on behalf of participants in an amount equal to 100% of the amount of the eligible participant's elective deferrals that do not exceed 3% of compensation and 50% of the amount of the participant's elective deferrals that exceed 2% of the participant's compensation but that do not exceed 4% of the participant's compensation

In the case of a participant who had a hardship withdrawal and was not eligible to contribute for 6 months of the year, how is this to be handled? The rk is calculating the match and says the participant's true-up needs to be calculated based on his total compensation for the entire year. That doesn't seem right since he wasn't eligible to contribute for the first 6 months. Can anyone shed any light?

Just want to see if I'm off base here.

Suppose you have a plan for a business, say a construction company or something like that, that is subject to Davis Bacon for certain projects. So, they elect to satisfy Davis Bacon obligations, or part of them anyway, by making contributions to their PS plan - let's assume for these purposes that plan permits, or is amended to permit this.

For compensation testing, am I correct that there is no special dispensation/exclusion for 414(s) purposes for Davis Bacon wages, so that you couldn't exclude Davis Bacon wages without passing compensation testing? So for elective deferral purposes, you couldn't exclude the Davis Bacon wages without passing compensation testing?

This applies to other coverage/nondiscrimination testing as well, right - no special exclusions?

However, the Davis Bacon contributions can offset other employer contributions, such as PS, Safe Harbor, Gateway, etc. I believe.

We are preparing a VCP submission along with a EGTRRA document restatement for a plan that didn't restate for EGTRRA. What effective date do we use for the restatement? A date in the restatement period or something like 1/1/15?

Rev. Rul. 69-277 says it's okay to distribute voluntary after-tax contributions from a qualified plan at any time. This still appears to be good law, as it is cited as recently as in Notice 2004-12.

How does this interplay with IRS Notice 2014-54? If a plan has both pre-tax and after-tax amounts in it, can a participant withdraw just the voluntary after-tax contributions? Or does 2014-54 require that any distribution (even if no "distributable event," meaning they are still employed, not over 59-1/2, etc.) be a pro rata mix of pre-tax and after-tax?

I keep thinking there must be some way to withdraw just the voluntary after-tax, otherwise 69-277 is useless, but can't figure it out. Does it hinge on a "distributable event" issue?

Any help would be appreciated!

Client has a single employee profit sharing plan. The plan invested in some houses in CA, and sold them at a profit.

Is that subject to UBT?

The escrow firm in the transaction made a mistake on the 1099 for the gain, and it triggered an audit. Now CA wants to tax them on the gain, and is not accepting that the gain is in a qualified plan.

Anybody ever heard of this?

Can a participant in a fiscal year 401k plan have deferrals within a fiscal year that exceed the 402g limit?

Plan Year: 7/1/2014 - 6/30/2015

Plan permits special election for bonus pay

Participant is age 50+

Compensation exceeds $100k + bonus

Deferrals 7/1-12/31/2014 $6,000

Proposed Deferrals + Catch-Up to be deposited 1/1-6/30/2015 PYE $24,000

Can a participant have permitted deferrals + catch-up totaling $30,000 for the Plan Year 7/1/2014 - 6/30/2015 given the above fact pattern?

Assuming, yes, it is understood this participant would NOT be able to defer any further for the remainder of calendar 2015.Would restart Deferrals in 2016...

Thank you

An employer sponsors a stand alone HRA and one participant is enrolled in an HSA through her spouse's employer. The participant had previously only used the HRA to pay the health insurance premiums on the HDHP. Now, the spouse's employer will be paying these premiums and she wants to start using her HRA for other expenses such as prescriptions and non-preventative medical care. If she stops her contributions to the HSA, would she be able to begin using the HRA for any purpose immediately (it is a General Purpose HRA) or would she have to wait until the calendar year in which she had no contributions to the HSA? Also, if she still has balance in the HSA at the time she ceases her HSA contributions, does that have any impact on her availability to use the HRA for any purpose? Note that the HRA plan is run on an off calendar plan year.

Thank you!

This Plan has many participants, each of whom has their own FBO account at a brokerage firm. This plan is considered 404© and a Participant "T" was allowed to invest in shares of a partnership in 2010, using his own balance of course.

Many things have been squirrely with this transaction. For example, when purchased, the shares were titled in "T"s personal name and it took 4 years to get changed. Also, K-1's have just been obtained for all the years, and it took pulling teeth to obtain them. The icing on the crappy cake is that it has come to light that the Partnership owns a bank where T's wife was an officer.

May the Trustee of this Plan "revoke", "recall", or otherwise force the sale of this investment (partnership shares) at this point? I have a feeling there is a Party In Interest here, but I can't decide b/c the PII is not related to the Trustee/Fiduciary of the Plan; she is only related to T.

My client, the Trustee, is highly agitated and understands that he should have done more research on the front end, but what can he do NOW?

Thanks for any and all advice. I've been reading legal-eze until I'm almost nauseated, but I think I'm overlooking something really obvious. Thanks.

Let's say a participant dies and has no beneficiary form. According to our documents, the death benefits should go to the surviving spouse. However, let's say the surviving spouse chooses to distribute the funds into the deceased participant's trust instead of distributing the funds to himself. Is that allowed? Can a beneficiary elect to have the distribution made out to someone else other than himself, including a trust of the deceased participant?