This might be better on another board, if so, I apologize.

Companies A and B are a classic controlled group. My question is related to the 50 employee requirement for QSLOB. in all other respected the two companies seem to meet the QSLOB requirements.

They want to be able to provide substantially different benefits to each company, and presently, combined testing would fail, hence the QSLOB analysis.

Company A has 75 employees, company B only has 25. What happens to Company B when Company A is a QSLOB? Is B treated as a stand-along QSLOB by default since company A is no longer treated as part of the ER group?

Does company B need to do anything in particular? Or do they have to do testing on the basis of the full control group, while company A can just do their own testing, ignoring Company B?

I apologize if these are really basic questions, I haven't needed to look at QSLOBs in the real world until now.

Never go anywhere without your towel.

http://www.wikihow.com/Celebrate-Towel-Day

Our firm has been a full service provider. From recordkeeping to the trustee holding the plan assets to compliance documents, testing and reporting services. We recently acquired a TPA company where a majority of their services is documents, testing and Form 5500.

Prior to the acquisition the process to complete year end testing for this product included using allocated link to import recordkeeping data from the vendor but on a cash basis. This seems to be very time consuming as we are backing out prior year contributions and a lot of reconciling plan participants accounts as well as plan level, they believed by doing this they were finding payroll errors and such which after reviewing the service agreement we really are not getting paid for this service.

My question is does anyone else have this type of structure and how do you handle year ends? For 2014 year end we imported contributions provided by clients on the census but are having problems with not being able to utilize top heavy testing and corrections reports for ADPACP testing do not reflect earnings.

Any opinions on the most efficient way to handle these are appreciated.

401(k) safe harbor plan requires 1 year eligibility,

Prevailing wage contributions are included in the plan, which by default means immediate eligibility for that portion,

Question-for the Average Benefits Percentage Test, do these ee's who are only eligible for prevailing wage contributions have to be included? Creates a lot of zeroes for the NHCE's.

FT for the first time on the 2014 SAR's is adding into the SAR the disclosure that there are "non-exempt transactions with parties in interest" (or something to that affect) when we indicate that there were late deposits.

Are other software providers doing this too? It is a true statement of course, but I am just curious if there was any printed position on this from DOL, etc. I know for example that we do not attach the Schedule G for these on an audited plan. Somehow I doubt the DOL ever said "it's ok if you don't tell your participants about this" but thought I would ask.

A client is considering a merger with another client. Each firm has a DB plan and each plan would be fully funded prior to the merger. After the merger, a significant minimum funding contribution would be required. The question is ‘who would be entitled to claim the deduction for that minimum funding contribution?’ Would the successor firm be entitled to deduct the contribution or would that deduction need to flow back to the pre-merger firms?

It seems to me that the successor firm should get the deduction. That seems to make sense but its important to be certain and I would like to provide some documentation to support my conclusion. Is my thinking correct and could anyone suggest documentation? Is there a certain way that the merger of the firms and their plans should be structured so the successor firm would indeed be able to claim the deduction? Thanks for any help.

Beyond the SunGard and FT William products does anyone know of a system they would recommend?

Calendar year profit sharing plan uses allocation formula that is integrated with Social Security, at full Taxable Wage Base. Plan is terminated as of June 30 of the year. In applying the formula, MUST you use only 50% of the TWB? If not MUST, what is typically done?

I am a new JD and new to the field of employee benefits. I am enjoying the material so far and would like to improve my working knowledge of the vast regulations. There are two online LLM programs I am considering (Georgetown and John Marshall). Is this a valuable use of time and resources?

10% of participants in a client's plan are invested in multiple Target Date Funds, apparently not understanding the concept of enrolling in the one most age/retirement date appropriate for them.

If the client re-enrolls those who are in multiple tdfs into the proper single age appropriate tdf, would they be afforded the fiduciary protections under the QDIA default approach?

Just wondering if people currently doing document restatements for safe harbor plans with an effective date 1/1/16 or are you waiting to later in the year to do your restatements for safe harbor plans?

We have a client whose plan we'll be taking over on 7/1/15. The document that I'll be completing for this client is updated to all the PPA,etc regs. The current TPA is insisting that the client sign the new restated document that they have completed and has an effective date of 6/15/15.

My thought is why sign that document when you will be having a new document just 2 weeks later. Never mind the expense.

Also, why restated documents with an effective date of 6/15?

Any thoughts? Am I missing something?

Is an amendment to correct for a failure under 410b required to amend the plan for the plan year in which the plan failed or can it extend to future years? The failure in the instant case was with respect to excluded classes and hour requirements. Thanks.

Calendar year 401k/profit sharing plan is sponsored by a corporation which files an extension for its tax return; so Sep 15 is the tax return due date. But the company files its tax return on Jul 31. Does it still have until Sep 15 to make a deductible contribution for the prior year?

IRC 404a6 and Rev Rul 66-144 suggest yes. But several CPAs have told me no.

I am in the early stages of taking over the TPA work for a SH 401(k) plan with cross-tested PS contribution. The plan includes the owner and his son. There are no other employees. They only want to max out the father. They don't need the SH with 2 HCE's but I guess they are covered in the event they hire anyone else.

I am concerned about the new comparability formula creating a CODA. Is this only a problem if the owner is a sole proprietor? Or is it irrelevant since all are HCE's?

401(k) Platform, so individual accounts. Doc has each person in own group. And all correspondence said "yes, you can pick and choose as long as no HCE receives anything".

But here is what they have done. They decided bonuses based on profitability of that department. 2 of 5 HCE's received a contribution and 31 of 70 NHCE's received a contribution.

This was paid in February and the controller did not deduct it in 2014. He plans to deduct it this year. This is going to fail testing using full years comp and one of these 2 HCE's has left. So we will fail by quite a bit. Is the correction simply to withdraw enough from the HCE's to pass 401(a) testing? Any penalties?

First please overlook how stupid these questions may sound. Not very familiar with Simple plan operation.

We have a client(Dentist Schedule C) that has a Simple Plan. The employer just sold his practice to another dentist. The employees with go with the new dentist as of 04/01/2015. The client wants to know if he can continue deferring up to the maximum on the receivables he will be collecting for the remainder of the plan year. We are assuming the employees would only receive employer match for the three months of employment.

What if a recent hire achieved the 5000 dollar threshold prior to sell of business in the first three months of the year.

The definition of compensation under the plan document is W-2 however there is self employed income language in it. We use Relius IDP V.S. (See definition of comp below).

1.22 "Basic Compensation" means the Participant's wages as defined in Code §3401(a) and all other payments of compensation by the Employer (in the course of the Employer's trade or business) for which the Employer is required to furnish the Participant a written statement under Code §§6041(d), 6051(a)(3) and 6052 (Form W 2 wages), as well as amounts that would have been received and includible in taxable compensation but for an election under Code §125(a), Code §132(f)(4), Code §402(e)(3), Code §402(h)(1)(B), Code §402(k), or Code §457(b), plus, effective for Compensation Computation Periods beginning on or after January 1, 2009, Military Differential Pay. Compensation must be determined without regard to any rules under Code §3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code §3401(a)(2)).

Basic Compensation for any Self Employed Individual (with respect to the Employer maintaining the Plan) shall be equal to such individual's Earned Income.

Basic Compensation shall not include amounts paid as Compensation to a nonresident alien, as defined in Code §7701(b)(1)(B), who is not a Participant in the Plan to the extent the compensation is excludable from gross income and is not effectively connected with the conduct of a trade or business within the United States.

The partner is part of an adopting employer of the plan. Would his 1099 income be eligible? He does not receive K-1 only 1099.

We are a TPA firm that administers Cafeteria Plans for public employees that are exempt from ERISA requirements. Currently, our clients hold their own checking accounts with which the funds are held. We are looking to offer a funding method where we, as the TPA, have a checking account that the client's funds are held in.

What are our funding options that will keep us compliant with IRC and California banking laws?

Because our clients are exempt from ERISA, but our TPA firm isn't, do we have to comply with ERISA requirements if we decide to hold the funds for them?

We are considering opening one business checking account to hold all of our client's funds with the idea that we would not dip into one client's funds if another falls short, but I am concerned with the commingling of funds and think it would be cleaner (and maybe the only compliant option) if we held separate checking accounts for each client.

If we were to open a Trust, could we commingle different Plan assets then?

Any help would be very much appreciated.

Anything legally (forget morally) wrong with this 401k plan design:

Automatic deferral contribution rate of 10% with enhanced QACA safe harbor match of 100% on first 3.5%.

Expectation is that 10% will be unacceptable to most NHCEs and they'll waive.

Colleague is arguing that the minimum deferral rate has to be "reasonable under the circumstances" but I can't find any such subjective requirement.