Recently, the Employee Benefits Security Administration and the Internal Revenue Service released guidance that makes it feasible to use an annuity as an aspect of a target-year investment fund.

Has any investment manager announced a product?

My client received a notice and demand for withdrawal liability. The notice states that the employer can either pay off the assessment in a lump sum payment (made within 10 days of receipt of the Fund's notice) or commence making interim payments in January of 2015. My client wants to negotiate a lump sum payment. My concern is that if a lump sum is not paid within the 10 day period specified by the Fund, is the employer harmed by having to negotiate a lump sum payment with some interest accruing? My thinking is that interest does not start accruing until the first interim payment is due in January of 2015 so that the employer should have until that time to negotiate and pay a discounted lump sum amount. I understand that Section 4219©(4) allows an employer to pay off the liability without penalty, but with accrued interest, if any. Any thoughts on why the Fund states that the lump sum must be paid in 10 days? Thanks.

We are running a 414s test. The client excludes certain items from their definition of compensation for allocation purposes. Is it possible for the "allocation" compensation to be greater than "gross" compensation.

In one case, the participant is an Ex-PAT so their gross compensation is 0, but they still have allocation compensation and receive an allocation.

In another case, the NQ plan contributions are impacting the definition.

Any thoughts?

Just a quick question... I remember reading something about this, but don't remember the source. Can you take a loan out from the rollover source (rollover contribution is made prior to becoming a participant) before meeting the eligibility reqirements? So let's say the company requires you to be employed for 1 year before becoming eligible, can you do a rollover contribution and take a loan from that source, before completing the 1 year of service?

Can a one person LLC create a solo 401k plan if the LLC has one part-time employee working less than 1000 hours/year and who is not the owner and not related to owner? If so, what is the process and what things one should look out for?

Can a one person LLC create a solo 401k plan if the LLC has one employee working less than 1000 hours/year and who is not the owner and not related to owner? If so, what is the process and what things one should look out for?

Thanks,

Disgruntled employee reports employer to DOL for late deposit of what employee thinks are 401k deferrals but are actually SIMPLE IRA deferrals.

DOL is seeking explanations, if we prove to them it's a SIMPLE IRA do they lose jurisdiction and go away?

26 CFR 1.417(a)(3)-1 lays out the rules for explaining a QJSA. Does anyone have a sample explanation they use for a defined contribution plan?

Is it enough to just get a sample quote off an insurance company and then tell the Participant to call the Fund Office for something more precise?

For reference, the differing benefits are all actuarially equivalent.

It seems like such an amazing amount of information to give to a Participant that it loses all meaning.

Thanks.

What happens if a company only has 2 employees (both Highly Compensated). and the Cash Balance plan covers both employees, however employee "A" is at the 415 max? Are there coverage issues since the in the current year only employee "B" is receiving a benefit? Is employee "A" still considered to the benefiting even though he is not getting an allocation?

If Company ABC has a CB plan, terminates the plan, then starts a new plan, I know the 415 Limit is based on combination of the plans but what about years of participation as it relates to 415? For example, if emplyee "A" had 3 years of participation in the first plan, does he start with 3 years in the new plan or does it start all over? My assumption is the past service counts (since the limit is based on the 2 plan) but I want to make sure.

Co. A purchases Co. B mid-year. Both Co. A & Co. B have retirement plans. Co. B's plan is being merged into Co. A's plan at 01/01/15.

Just found out that Co. B has life insurance in the plan. Co. A doesn't offer life insurance and really doesn't want to fool with the policies. Can the Co. B participants who have policies be forced to surrender the policies into the plan?

I'm retired. After retiring, I earned income that the IRS says must be treated as self employment income. I completed Schedule SE and determined my max contribution every year, always less than $1,000. I deposited the money into an old IRA. When I passed age 701/2 I kept depositing the annual SEP contribution, but I did start my RMDs for the IRA. The IRA Holder recently notified me of the excess contributions for 2010, 2011, 2012, and 2013. I have pulled out the contributions plus their associated earnings. What IRS form do I now use to report this action and pay the penalties. Do I submit a 1040X for each year? Are the associated earnings reported on that 1040X or in my 1040 for 2014? How do I use the Form 5329, since the penalties repeat each year until the excess contributions are withdrawn?

I have a 401k plan with no 412 money in it. The plan was originally set up (by a prior service provider) with annuity options as the normal form: 50% QJSA and 100% QPSA. The client would like to amend the plan to remove the 100% QPSA spousal death benefit and replace it with a 50% QPSA spousal benefit (I think they want to be able to name a trust for half the death benefit without needing to get spousal consent).

Can I amend this plan? Do I have any protected (spousal) benefit issues? Can I amend out of all annuity options, then later go back and add annuities including the 50% QPSA? Or is this a bad idea all around, and why?

Looking at a 403(b) TDA plan, it meets all the requirements of being a non-ERISA plan. However, when reading the adoption agreement, they have selected to allow employer contributions and they have selected that they intend to operate the Plan in compliance with ERISA Section 404( c ).

The employer has never contributed to the plan and has no intentions to do so.

Does the fact that the employer selected these items in the adoption agreement create a Title 1 ERISA plan by default, or can the Plan rely on the way it has been functioning (i.e. as a non-ERISA plan)?

Trying to determine the filing requirement.

Thanks!

A small 403b wants to terminate. It's custodian of the contracts (Mutual of America) is saying they can not terminate the plan until the end of the plan year. I don't believe this to be the case. The sponsor is trying to avoid having assets after the close of the plan year and wrap things up before 12/31

Hello Guys,

I have another question. I am doing an ADP test for a year end 09/30/2014.

The only problem is the Owner has died. Now thats not the issue. The issue is he died 01/27/2014 and he only takes comp once a year at year end. The ownership was transferred to his niece shortly after his death which made her a higly. She defers 10% and the populous defers 5.27%.

Am i allowed to use him in the test even though he has zero comp? He technically was an owner in the plan year?

Please advise

Is it necessary for a sole proprietor to have a TIN to put in place a 401-k plan. My thought is yes because it must appear on the 5500 but just wanted to check and see if anyone had any input?

Good morning

I am working with a client on amending their 125 plan to allow for the mid-year change due to enrollment in an exchange. He is under the impression that this is something that can only be done for one plan year (e.g., for 2103 or 2014 but not both). I cannot find anything in the guidance that limits it. Anybody else heard of this limitation?

The company is an LLC taxed as a partnership. The plan has a 100% of 4% Safe Harbor match.

There are two owners participating in the plan. They both contribute to the 401(k) plan during the year out of a monthly draw, but we don't know what their actual compensation will be until after the end of the year (I realize this could be risky in the case of a loss for the year, but that is another question and it hasn't been an issue so far). During the year, their deferrals are in excess of 4% of the draw, so their match is limited. Historically, we calculate the match for the owners once their K-1s are done after the end of the year.

All the other participants get their match with each payroll and the preference is not do a "true up" for them at year end.

I am now doing the PPA restatement and have been pondering the "true-up" option.

I would like rationalize that the year end match calculation for the owners is something different from a "true-up", but my gut tells me that it is NOT (added from initial posting) and we should be doing the true-up for everyone.

Thoughts?

Church sponsoring a 403(b) plan. Thye want to exlcude part-time employees expecting to work less than 30 hours per week form safe harbor contributions. Can that be done in a non-ERISA plan? I know that the universal availability requirement prevents thta for deferrals, but I'm not sure about safe harbor match.

Thanks in advance for any guidance.

I've been researching this topic, but I'm having trouble finding conclusive answers.

I have a financial advisor asking about using REITs for DB investments. The REITs would just make up a part of the assets - say 10% or something.

These particular REITs are illiquid for the first 12-18 months. During this time, their stated value does not change. Then, after 12-18 months, they become liquid, and their value changes at that point. This is how the FA described the REITs that they invest in to me.

It seems like REITs (at least publicly traded ones) should be fine as far as DB assets go. But what's sticking out to me here as a red flag is the illiquid part. For these REITs that he is describing to me, I'm trying to verify that a) they're not prohibited, and b) they would not require an annual audit.

Anyone have any experience with these type of REITs the FA has described to me?

Thanks!