I am working on a Plan that ceased a safe harbor enhanced matching contribution before the 2015 Plan year and implemented a new discretionary matching contribution subject to vesting. for the 2015 year.

The discretionary matching contribution is the same formula as the enhanced safe harbor matching contribution.

Consequantly, one of the people I work with expressed the opinion that the change is really an amendment to the Plan's vesting schedule 100% vested matching contribution to a match subject to a vesting schedule.

As a result, he believes that participants who had previously received safe harbor matching contributions would have to be given the choice between a 100% vesting schedule and a 3-year cliff vesting schedule.

I don't think that this is correct.

I think an adp safe harbor contribution is by it's nature a 100% vested contribution and a non-safeharbor match is subject to vesting. If the employer decides to implement the safe harbor again it will of course be 100% vested.

Any thoughts?

The Church has a DB plan that was updated in 2011. It is a non-electing plan. They are currently amending the plan and I mentioned providing a SMM to participants. They would prefer not to have to do that since they are not covered by ERISA, and I don't know the answer. I don't know if an SPD was ever provided, or if it should have been if it wasn't. Your guidance would be appreciated.

How are voting shares and non-voting shares treated when figuring out controlled group issues.

Are only the voting shares considered? Are the total shares combined for consideration? Do you compare all the voting shares seperately from the non-voting shares?

Any help on this would be appreciated.

Potential client apparently wants to adopt 401(k) in 2015, but already mistakenly allowed deferrals into their SIMPLE-IRA plan. I don't have any dollar amounts available, but I believe they are small, as only one payroll deduction for January in a small company.

Now, RP 2013-12 says this can be corrected under VCP - filing fee of $250, plus the 10% if the assets are retained rather than distributed. I'm interested in any thoughts on the following:

1. Any thought on retain vs. distribute?

2. It isn't clear from the instructions - is the employer still required to make the match? I would presume so - and if so, is it deductible? I would presume not, as this would be an "excess" contribution? (I changed my mind - if the correction is approved, it should be deductible, I think)

3. Is it necessary to request a waiver of excise tax under 4972? If the entire amount of the match, if required, is a nondeductible contribution, then it would seem like requesting the waiver would be routine? (if I'm correct on 2 above, this is N/A)

4. Tax consequences, if any, to the participants, if the deferrals are retained rather than distributed? (none, if 2 above is correct)

5. New edit - does anyone consider the SIMPLE as Plan #001, 002, etc.? For example, if someone previously had a SIMPLE, and properly terminated it, then establishes a 401(k), do you count the 401(k) plan as Plan #001, or 002? Reason I ask is that the Revenue Procedure asks for the Plan # of the SIMPLE, and I would not normally have assigned it a Plan #.

Any other thoughts? I've not actually seen one of these until now...

P.S. another thought that occurs to me - how does all this tie in with the "requirement" where the IRS says that in order to terminate a SIMPLE, you must notify the employees prior to November 2. I would say that the existence of the "fixes" in this Revenue Procedure override the IRS information on their website - otherwise, an employer that fails to provide the SIMPLE notice can't establish a 401(k) for the following year, and has no recourse if they do! But it does seem to bring up a strange inconsistency - if you have a SIMPLE, and don't give the advance notice of the termination, you are theoretically stuck with it for all of the next year. If, on the other hand, you just establish the 401(k), then you can fix this with IRS blessing under RP 2013-12.

???

Public employer calculated the mandatory pick-up contributions for one employee based on the wrong definition of compensation (definition varied based on date of hire, and when he was rehired, his rehire date was in record rather than his original date of hire). So contribution was smaller than it should have been for some period of time (since adjusted prospectively).

Is anyone aware of guidance - or informal IRS statements - addressing this kind of situation and whether the employee needs to make up the contribution or whether the employer can simply absorb the cost for its error? The error was in no way the employee's fault.

Does anyone work at an organization that provides a loan repayment or assistance type program? I am aware of some programs that forgive a loan after a period of time when one works in a public service position (i.e. teacher, medical professional) but am wondering if this is trending in the for profit environment.

Not sure where to have posted this question. This seemed to be the best category.

Thanks.

This isn't particularly a 5500 question, but it is directly related to determining what to fill in on the 5500, specifically for Business Code.

Non profit's main business is community service. To fund this service, they created a taxable entity/subsidiary which employs the bulk of the employee population at a restaurant. Question is which one takes precedence for Business Code - restaurant or non profit (813000)?

An organization that for all practical purposes operates like a chamber of commerce, would like to be able to sponsor a retirement plan document for its members. I am not talking about a multiple employer plan. The ERISA Outline Book says that a Sponsoring Organization is usually a bank, TPA or law firm. It's the word "usually" that makes me think that other types of businesses might be able to do the same thing. They are hoping to retain the services of a TPA firm to help with the administration, but they want to use their own plan, not the TPA's. Any thoughts?

I have a client who rolls her 401(k) account into to her IRA in 2014. She has multiple positions(about 30 stocks and 15 bonds) that are transferred in kind. On the final statement no values are shown on the day the positions are journaled; only number of shares and bond face amounts. Given that there is no tax effect associated with the precision of the valuation, is it bad practice to just use the previous statement value of the portfolio or is it good practice in that I can't justify billing the client for the date of journaling calculation given that it is has no tax effect on her.

401k Plan using age 21 and 1 YOS (1000 hours). Truck driver is paid 25 cents per mile, reported on W-2. How the heck do we figure his hours out?

I know that new participants should get a QDIA Notice. Also, those who are already defaulted get one.

What about eligible people who have no account balance? Do they get a Notice every year?

Hoping someone can help me out here!

One of my employers failed to begin elective tax deferred contributions from an employees paycheck.

The employee signed up last July of 2014 and is just now reporting that deferrals are not coming out.

The employer has a signed copy of election in the employee's file (the company also matches on deferrals.

Is there a regulation that states how this should be handled?

Is the employer responsible to make up both the EE and ER contributions?

Let's say you have a non-governmental 457(b) plan that qualifies as a "top hat" plan. There is no Rabbi Trust. 457 plans are subject to ERISA, except to the extent that a specific exemption applies. ERISA 401(a)(1) exempts the plan from ERISA fiduciary responsibility.

So, is there potentially State law fiduciary liability? Or, does the fact that the plan is subject to ERISA mean that ERISA preempts any State fiduciary laws, in spite of the fact that ERISA fiduciary rules do not apply? Or, is this one of those dreaded "gray" areas?

A non-safe harbor 401(k) plan has a September 30 year end. Employees who should have been given the opportunity to defer on October 1, 2014, were not. Employer wants to correct now and be done with it. EPCRS says the missed deferral is determined by multiplying the ADP for year of exclusion by the employee's compensation.

The ADP for 9/30/15 will not be known for some time. Any suggestions on how to correct now and not wait until end of year?

Thank you.

The news and DOL talk about diversifying a long time ago and I am having trouble remembering. Was the quarterly PPA notice required to go to everyone eligible to defer or just those with accounts?

Looking at a cash balance plan as a potential takeover. The pay credit formula for the owners is based on 401(a)(17) limited comp then subtract out the bonus (comp - bonus). It seems like that allows the owners to virtually set their pay credit every year based on how much of their pay they label as "bonus". Does anybody think this is a concern?

Looking for guidance on the deadline for amending a 401k/PS plan to add contribution of unused sick leave feature. The facts of Rev. Ruling 2009-31 state that the plan was amended to add this feature in December, 2008 before the feature took effect in January 2009 (when PTO was granted to employees). There is no discussion elsewhere in the Rev Rul regarding timing of the amendment. I have read several articles that make the blanket statement that the plan must be amended before the beginning of the plan year.

Since this is an optional provision I would think it would fall under the heading of a discretionary amendment that must be adopted before the end of the year in which it is first effective. Client has already notified participants of new policy (contributing unused sick leave to 401k as a nonelective contribution) but 401k/PS plan document does not support it. Looking for something more than passing factual item in the Rev Rul to support conclusion that they cannot make contributions this year because they did not amend the plan before the beginning of the plan year (Jan-Dec plan year). Any guidance would be greatly appreciated!

We have always suggested that if someone sends in extra loan payments to either:

1) Apply them to another outstanding loan, or

2) Send it back to the company to reimburse the participant

In fact, we deal with a national carrier that does #2 routinely. In fact, they make the check payable to the participant.

I have such a situation, but with another national carrier. They expressed their disagreement with the proposed correction (send back to the company) and believed the funds should stay in the trust to offset contribution, be reallocated or used to pay fees.

How do you guys approach these?

Employer purchased Company B. Company B terminated their plan prior to the sale and some of the participants rolled their distributions to the new employer's plan.

The new employer does not allow Roth contribuitons, however Company B did allow Roth Contributions. When the rollovers were done to the new plan the Roth Accounts moved along with the pre tax account. According to the TPA, the Roth transfers would be considered a frozen source until the new plan was amendmed to allow roth contributions.

I thought in order to transfer a roth account from one employer's plan to another, the new plan had to offer Roth contributions to begin with.

What am I missing???

I have a plan that wants to use a fixed match for "Administrative and Hourly" employees (50% on 4%), and a discretionary match for "Patternmakers". Any HCE's would be in the Administrative and Hourly group, and the Patternmakers would have no HCEs.

I assume if the fixed match for Administrative and Hourly employees exceeds the match made for the Patternmakers we would have to test for Benefit, Rights or Features (BRF) issues since the rate of match available to an HCE would exceed the match available for a NHCE. However, if the sponsor decided not to make any match for the Patternmakers in a plan year, would that simply be a coverage issue, or would the rate of match for the Patternmakers be considered to be zero and, therefore, BRF testing comes back into play?

Clearly, excluding certain groups from receipt of match completely is just a coverage and ACP testing issue, and I guess I am struggling to see the differnce between saying the Patternmakers are excluded from the match, and saying the Patternmakers are eligible for a match, but the matching rate is zero. That leads me to the conclusion that BRF testing wouldn't apply in years where the discretionary match for Patternmakers is zero.

Can someone please clarify when Benefits Rights and Features testing would apply to this situation?

Thanks

LANDO