I am preparing a 5310 for an employer who was acquired in a stock purchase (C Corporation shares were purchased). The sale and plan termination were simultaneous and occurred in July 2014. We're in November 2014 and I'm completing the 5310. Throughout the life of the plan, the employer was not a member of a Controlled Group. Today, as we file the 5310, the employer is now a wholly owned sub of the acquring company and employees are participating in the parent company's 401(k).

Do I indicate on 5310 that they're a Controlled Group member? Since an affirmative answer requires a statement (explanation), my inclination is to answer that they are a Controlled Group member and provide the details in the required statement. Does anyone have a different opinion or experience with this scenario? I suspect it's fairly common.

An employer (our client) has purchased another business (asset purchase). Several of the employees from the purchased business are going to become employees of our client. Would thie plan of the purchased company be considered a "related" plan for purposes of determining any amounts avaialbe for loans of these new employees?

If a plan sponsor adopts an approved volume submitter or volume submitter prototype document, with no special language added, is there any benefit in applying for a determination letter in the name of the plan instead of relying in the approved document's letter?

Does anyone apply for determination letters in the name of the plan anymore if using an already approved document?

Hoping someone can help me with this.

Plan document requires person at 415 limit, and working past NRA to take their money.

Person past NRA is now being provided the monthly payments they should have received as a Retroactive Annuity. The rest is being rolled over.

The question involves eligibility for a rollover. I can see 3 ways of looking at this:

1): Since it is treated as being paid as a life annuity, my guess is it cannot be rolled over, since distributions paid over a life annuity basis are not eligible for a rollover;

2): Maybe it is considered similar to an equal installment distributions. If so, since this covers less than 10 years it should be eligible for a rollover; or

3): Maybe it is treated as a lump sum which would make it eligible for a rollover.

Does anyone know the answer to this?

Thanks,

Craig Schiller

For several years now, a man has unknowingly been paying his ex-wife's insurance with pre-tax withholdings through the cafeteria plan. He caught this and wants a refund.

We are processing the refund, but we need to know how to report it. Can we treat it as compensation paid this year, or do we have to go back to the year we withheld the amount and treat it as compensation paid that year (this would require us to go back and amend several years of W-2s, employer reporting, etc.)?

If you have any support for your conclusion, that would be great!

I am probably overthinking this. Looking for the simplest way to handle things, consistent with what a client WANTS to do.

Corporation A has a 401(k) plan - safe harbor.

Corporation B will be newly formed, let's say on December 1.

Corporations C-F are a controlled group. They currently have a SEP for 2014.

Corporation B, when formed, will be part of the controlled group with C-F - same owners.

Now, here's where the fun starts. Corporation B will be purchasing corporation A effective December 1, 2014. I haven't been given firm information yet, but let us assume that it is a stock sale. All employees of A will transfer over to B's payroll.

Effective January 1, 2015, C-F, as well as A and B, (all being part of one controlled group) will either adopt a new safe harbor plan, or will sign on as participating employers in the plan currently maintained by A. If a new plan is established, then A's plan will be merged into the new plan.

Since the employer wants this to be seamless, he wants the employees of what is now A, and who will be transferred to B effective the date of the sale, to be continued to be allowed to defer, based on the payroll that will now be from B.

Do you see any problem with B just signing on as a participating employer to A's plan for the balance of 2014, then having all of this, (either via new plan/merger or everyone signing on as a participating employer in A's plan) being handled under the one plan for 2015?

I feel like I may be missing something, but then I think I'm not missing something.

Sigh...

hello,

I am bringing in two excluded employees in order to pass 410b. They get QNEC equal to avg deferral rate of NHCEs in the plan and then SH match on such amount. I know that I can apply the QNEC to my TH minimum but can I also use it towards my minimum Gateway?

Thanks,

IRA account holder dies in 2014. Should have taken rmds beginning in 2012, but failed to do so. His child is the beneficiary. To add a twist the deceased had a will to which he leaves everything to a charity.

The chariy is asserting that the rmds for 2012 - 2014 should be payable to the estate and thus go to the charity. I dont see that that is the case, but it would help if I could point to a cite. Is there a cite that is on point?

Thanks in advance for any guidance.

Participant over age 70 1/2 retired on December 31, 2013. When is the first RMD payment? The Code/Regs say the distribution year is the year in which the participant retired. Somebody is arguing that since the participant worked on December 31, they didn't really retire until January 1, 2014.

during the 2013 5500 audit, it was discovered the platform used the wrong compensation to allocate the profit sharing contribution. The platform will correct the allocation and deposit the "lost" income. This means some participants will get an additional deposit and some will have a portion of the contribution removed.

The question is does the client HAVE to notify the participants of the error. While it may be advisable to let the participants know what happened, want to know it it is required.

Thanks

Item (e) of form 6088 asks for compensation information. But the plan benefit formula is just service multipled by certain dollar amounts. Can I put N/A in that column or will the IRS insist that it be completed?

We have had "issues" with our existing 5500 preparation software, hampered by Tech Support at the vendor which was unavailable on the evening of October 15, so we are in the market for a new software package. We have multiple plans (4 retirement, 5 H&W) and the 5500s for the retirement plans have complex assets and schedules. Our 8955-SSA has been a particular problem because there are many hundreds of terminated vested participants in each plan and our current software could not upload the participant data, requiring it to be manually entered.

If anyone has any thoughts on their experience with FT William, I'd love to hear them!

I'm approaching my mid-fifties, and want to retire in 10 years.

After meeting with an agent from Paradigm Life (www.paradigmlife.net), they introduced me and my wife to a Whole Life Insurance Policy, aka the 770 account.

I did not look at Whole Life Insurance the way they explained it-being there is liquidity, a death benefit, tax benefits, and I can leave something of significance behind to my family.

Apparently the ultra-rich have been using this strategy to pass their wealth since whole life has been invented.

For those using IRA's or Roth IRA's this could be a better option.

Retirement Income

I am assuming that non-profit organizations have no individual owners. I have a possible new client the founder (HCE) of which has a daughter also working in the organization. The daughter does not and has not earned over $115,000 in any years, yet they are both treated as HCEs on the TPA's discrimination testing. Is the TPA somehow viewing the founder as an owner and then attributing that "ownership" to the daughter incorrectly? Thank you!

I'm looking for definitive written authority for what is clear: a participant who received a deferral refund resulting from a failed ADP test does not get to keep the match attributable to the refunded deferrals.

I'm an investment advisor and not a TPA, so I don't have access to the ERISA Outline Book or other such resources. Hoping someone can help me "prove" what is clear to a participant who is skeptical because it's not covered in the SPD.

Thanks

Need to determine if I have a control group and if possible to change the ownership around so that they are not controlled.

The children are all over 18 and do not work for any of the companies. Those controlling 1% ownership are also not employees.

Dad A and B are brothers.

Any help would be greatly appreciated.

Control group.xlsx

A client has a rather unusual request as to the profit sharing allocation methodology. The client would like to to able to:

1. allocate in the same dollar amount per Hour of Service for each Participant;

OR

2. in the same ratio as each Participant's comp bears to the total of such comp of all Participants;

OR

3. a combination of both. With complete flexibility to mix/match, or choose between one or the other.

Although both methods 1 and 2 are, individually, design-based safe harbor allocation methods, I believe the flexibility to mix and match takes it out of design-based safe harbor status. Am I nuts, or am I correct? (technically, I suppose the answer to both could be yes...)

Several years ago a 457f was set up for executive by setting up a "rabbi" trust which was funded with a one-time investment.

The earnings of this investment would be used to pay deferred compensation to the executive assuming employee stayed with employer for XX years and the original investment would be returned to employer at the end of agreement.

The Executive reached age 65 on April 1st 2014 and thus became 100% vested.

For illustration purposes let's assume the total trust account is now worth $300,000. $200K is the employee's portion and $100K was the original investment.

Since the risk of forfeiture ended April 1st 2014 should the employee's W2 for 2014 include the entire amount of $200K? or just the $40K?

If so, would the distributions made in years 2,3,4 & 5 not be reported at all?

Thanks in advance

Moni

In the for profit world there are stock sales and asset sales. Is there an equivalent to a stock sale in the non-profit world? Specifically a Church plan? Thanks.

As a Plan administrator, we are looking to request for the first time an Allocation of Revenue Credit to participant accounts. How do you communicate this credit to paticipants? Is it appropiate to add a message under the Year-end statement, even if some of the participants are not going to receive this credit? How specific you want to be on this message?