I have a plan that is written as cross tested with everyone in their own group. The company refers to their non-elective contribution as a "Year of Service" contribution, meaning that they allocate it based on years of service as follows: (company allocates)

0 -9 years - 3% of base salary

10 - 19 years - 4% of base salary

20 - 29 years - 5% of base salary

30 and over - 6% of base salary

I believe that the formula that they use should exempt them from gateway, but here may be the problem.

For the basis of the Year of Service contribution they exclude bonus, cell phone and car allowances. The plan document does not exclude anything in the definition of compensation. Comp def says wages within the meaning of 3401 (a) including any amount includable in the gross income under section 125, 402 and so on....

Also in document, Compensation shall include only that compensation which is actually paid to the participant by the company during the Plan Year or such other period used to determine Comp for allocation purposes.

All participants receive the contribution based on the full year comp.

Based on the document, is this allowed to allocate the contribution on this comp?

Can I test gateway, average benefits and general test using the comp used to allocate the contribution?

Would it have to pass the 414s comp test first?

thank you for your help.

Cash balance plan, lump sum is available. Ppt is not 5% owner. Ppt terminates from active employment at age 73 and takes a full lump sum distribution immediately. Is a portion of this distribution considered an RMD and therefore not permitted to be rolled over?

Required beginning date under the plan is later of age 70 1/2 and retirement date.

May funding investments in a 403(b)(9) plan consist of a brokerage account holding assets other than annuities and mutual funds, such as stocks, bonds, ETF's, Partnerships, etc.? May the Trust hold real estate, collectables, etc., which would be owned and custodied by the Trust, FBO the Participant?

The shareholders of a closely held entity want to become the assignee of a deferred compensation arrangement with respect to one individual (they would be on the hook for satisfying all obligations under the arrangement). I have not found anything in the 409A regs that would prevent this, am I missing anything?

Who would be responsible for the tax reporting/withholding?

Participant Directed 401(k) Plan. When you read 404© it does not specifically say education meetings are required. Fiduciaries must provide the participants with the investment information to make an informed decision.

Does ERISA require the employer conduct education meetings? Not sure why they wouldn't...

I am looking for any regulation that requires education.

Thanks

Would a service provider run afoul of 409A rules if he/she opted to forfeit all or any portion of his/her deferred compensation payment (the arrangement is currently in repayment as installments, treated as a single payment). No other benefits would be paid in exchange - he/she would just receive a lesser amount, payable over the same time period. There are obviously other tax considerations.

What if the service provider agreed to take a lesser amount but the amount would be paid over a specified period of time rather than life - I believe this would be subject to the subsequent deferral rules, is that correct? And if a series of installment payments (treated as a single payment) had already begun, then a subsequent election may not be made. Is this correct?

Is the definition of participant for purposes of 5500EZ qualification the same as it is for counting participants for 5500 or 5500SF purposes?

If the doctor is the only employee actually contributing to his safe harbor match plan (although other employees are eligible) is it a one-participant plan?

Anyone have good references for how to handle a participant who the employer paid too much Match to due to the participant reaching the compensation limit?

The participant was paid $360 too much in employer match. I am seeing a ton of information on excess deferrals but nothing too specific on excess employer match. I saw the option to 'forfeit' but nothing to back up that correction. Thank you!!

Does anyone have any insight into what remedies a Plan Sponsor has under the VCP for not making the Safe Harbor contribution as specified in the Plan Document for a 4 year period?

In addition, the ADP test was not preformed and the Plan is Top Heavy.

When does vesting service stop in this situation? (I don't see anything in the plan document that addresses it.)

Our frozen plan's early retirement eligibility requirement is age 55 with 15 years of vesting service. We have a 47-year-old employee who had 6 years of vesting service when the plan was frozen 3 years ago so his years of vesting service now totals 9. If we never terminate the plan and he remains employed he'll have more than 15 years of vesting service when he's 55 and can retire early.

Let's say we terminate the plan at the end of this year, at which time his vesting service will be 10. Question is: Assuming continued employment past the plan termination date, does this participant continue to earn vesting service or does it stop at plan termination so that he never becomes eligible for early retirement and must wait until age 65 to draw a pension?

Let's say a participant deferred $25000 over the years. He takes a loan, and defaults to the tune of $22000. There is $7000 left in the investment account, so there were gains of $4000. Now he wants a hardship...would you say he can take the full $7000, where the defaulted loan used up gains and some deferral contributions, or only $3000, where the defaulted loan used up deferral contributions only?

I'm leaning towards the first, in the absence of guidance, at least as far as I know.

2 NHCEs met eligibility but entered the plan before the entry date. The total deferred was less than $300. I know in the past EPCRS stated you had to amend the plan, which seems ridiculous since amending the plan could potentially cause the plan to include other NHCE's to receive QNECS for missed deferral opportunities.

Am I mistaken that you can now refund the ineligible deferral and it becomes taxable to the participant in the plan year it was distributed?

if only the IRS would give large plan filers the same guidance they gave to small filers ( 7 days) life would be so much easier.

Client is putting together their Committee Procedures and wants to state that deferrals will be transmitted between the 3rd and 7th business day following the date the funds were withheld. The plan has over 100 participants.

I like the 3 days, but wondered if the IRS or DOL would take issue waiting 7 days.

Also if the actual transmittal date fluctuates some times 3 days, sometimes 7 days, if that would raise a concern from the DOL.

Thoughts

Thanks

We have a one participant 401(k) plan that files a Form 5500-EZ.

Does the DOL's 7 business day safe harbor rule for depositing 401(k) deferrals apply in this case?

What is the fix if they blow the deadline -- same as for other small plans?

Thank you!

Does anyone have any ideas as to what the proper correction would be under 4980D(f)(3) for credits made to a non-integrated HRA?

It is clear from the IRS, DOL, and HHS guidance that a non-integrated HRA will fail to comply with the annual dollar limit prohibition and preventive services requirements. If a plan sponsor (in the multiemployer plan context) makes credits to an HRA account and then later finds out the individual was not enrolled in a group health plan (rendering the HRA account "non-integrated"), what could be done to correct and avoid being slapped with the $100 per day/per individual excise tax penalty?

4980D(f)(3) states that:

(3) Correction

In 2013 Client had one participant who terminated in 2012 and should have been submitted on a 2013 Form 8955-SSA. TPA did not submit the Form 8955-SSA for 2013. Now we are working on the 2014 Form 8955-SSA. Can we include the missed person or should we provide a 2013 Form 8955-SSA and inform the client that a penalty may be assessed?

The IRS released the official 2014 version of the 8955-SSA on Thursday, Jan 29, 2015.

All the major Form 5500 series vendors (Datair, FTWilliam, Relius/Corbel ) are probably working to bring their electronic version to the market as fast as possible.

I am noticing that some are not ready to release their 2014 version yet.

Questions

1). What is the rest of the Benefits Community seeing?

One has to fight the urge to compare vendors, but it is a natural business question to wonder if one or more vendors are faster than others.

2). Any information on your preferred vendor?

Thanks

I have a new calendar year plan with an effective date of 02/01/2015. Corbel PPA Prototype. Eligibility Requirements are Age 18 and 6 Months of service, quarterly entry. All employees employed on the effective date were eligible as of 02/01/2015.

Question is we have a employee who was rehired after 02/01/2015 and had previously met the Age 18 and 6 month service requirement. When do they enter? On date of rehire, next quarterly entry date or do they have to meet the 6 month service requirement again.

Assume no rule of parity or no 1 year holdout apply.

Any input would be appreciated.

Thanks

SIMPLE IRA terminated effective 1/1/15. Sponsor starts a Safe Harbor 401(k) effective June 1, 2015, it would be considered "newly established" correct?

Have a client where plan defines compensation for plan purposes as W-2. A client is insisting that opposite sex health insurance premium, while taxable, shouldn't be considered as compensation for plan purposes, based upon their "research."

I can find no basis for this whatsoever, and I'd just like to see if anyone knows of something I'm missing? They could amend the plan to exclude such compensation for plan purposes, but that is a separate issue - plan does not currently contain such an exclusion...

Thanks.