I apologize if this is not an appropriate forum for this post.

I am trying to make a career change and find an in-house counsel job.

Are there search tools (including particular headhunters) that better than others? How would you go about a search?

Many thanks.

Hello everyone!

I have a client that is contributing only the 3% Safe Harbor Nonelective contribution to their plan. There are no other employer contributions to be allocated, and forfeitures were used to reduce plan expenses. Based on all information I could find, and from my past experience, this scenario allows the plan to be exempt from all top-heavy minimum requirements.

However, there is one wrinkle that is affecting my judgement. The plan document is written so HCEs are not required to receive Safe Harbor contributions (keep in mind they are eligible to receive the Safe Harbor in the sense they met the eligibility requirements and entered the plan for Safe Harbor contributions, and are not strictly excluded from this portion of the plan). This selection was made a few years ago, so the plan has not contributed the Safe Harbor 3% Nonelective for any HCEs (both Non-Key and Key) for quite some time. This is the first year in a while where the client decided to not allocate discretionary profit sharing in addition to the Safe Harbor, so the Top Heavy exemption can possibly come into play for the plan year.

That being said, since the HCEs that are Non-Key are not receiving any Safe Harbor contribution, does the plan lose their Top Heavy exemption, and would this group have to receive a 3% Top Heavy Minimum? I can't confirm anywhere whether the exemption still holds up since the client is strictly allocating the Safe Harbor nonelective to the plan.

Any help is greatly appreciated (a regulation cite or excerpt from the ERISA Outline Book would really help as well).

Thanks!

Wickedp1

Is an employer permitted to double-up cafeteria plan pre-tax health insurance withholding amounts from a final payroll for an employee who terminated mid month? This would be done to cover the "2nd half" the employee would have ordinarily paid in the latter part of the month had employment continued. [This is with respect to a MD employer.]

Thank you.

If a participant in a qualified plan dies, and the participant's named beneficiary is a See-Through trust, then the persons who are beneficiaries of the trust are treated as designated beneficiaries of the participant.

Does this include that the beneficiaries can split the trust account into their own separate personal accounts (if they do it by the end of the year after the year of the participant's death)?

Until the trust account is separated, does the plan pay the benefit, including RMD, to the trust or to the persons?

Before the trust account is separated, do you use the shortest life expectancy of the beneficiary persons to determine the RMD, or do you treat it as separate benefits and calculate an RMD for each as if they were the participant's named beneficiaries?

Thanks for answers. I'm just trying to understand how this works before I need to know how it works.

A sole prop has a 401k PSP for 201 and has already contributed his maximum deferral of 17,500 and PS of $33,500. Now he would like to implement a DB Plan in 2014. If he does this, his PS contribution would be limited to 6% based on the combined deduction limit, but he's already contributed more than this.

How to fix this, if possible?

We have a client that would like to rollover a substantial amount of money from his IRA to his 401(k) plan. However he would like to be able to access this money by either taking a lump sum distribution each year if needed or rolling it back to the IRA.

The plan document states that a participant may distribute all or a portion of the amount credited to the participants rollover account at any time.

He is under age 59 1/2, i understand that he could take lump sum distributions from his rollover source from the plan based on what the document says. However can he roll it back to his IRA? Is it considered an eligible rollover? I believe it is but i just want to make sure.

the account is split pursuant to a QDRO and the alternate payee takes less than a lump sum. they then request a follow up distribution. is she exempt from the 10% penalty for all distributions because she is an alternate payee or does she only get the exemption for the initial distribution from the account?

the account is split pursuant to a QDRO and the alternate payee takes less than a lump sum. they then request a follow up distribution. is she exempt from the 10% penalty for all distributions because she is an alternate payee or does she only get the exemption for the initial distribution from the account?

I am looking at a single-employer plan that provides health insurance, life insurance, dental, etc. It is self-insured for health and pays in monthly amounts to the plan third-party administrator based on an estimate of total claims for the year. It has about 150 participants. If the employer pays in a set amount of contributions per employee each month for health insurance and employees also make contributions, whatever balance is held by the TPA at year end is plan assets, and schedule H is required, and a plan audit is required, correct? Are there any exceptions I should be aware of?

What if the employee portion is only to cover dependents? Does that change anything?

Notice 2014-53

Does anyone have experience requesting an expedited review of a determination letter request due to an "urgent business need"?

I have a client that needs to establish a new 401(k)/ profit sharing plan for collectively bargained employees. Employers are currently contributing to another plan on behalf of these employees, but the other plan is essentially kicking these employees out. We need to set up the new plan to receive new contributions for the employees, and also to transfer the accounts from the other plan.

The problem is that the other plan will not transfer the accounts until the new plan obtains a favorable determination letter. Also, employers are reluctant to make contributions to the new plan until we get the letter. Without the letter, employers will have nowhere to remit contribtuions required under the collective bargaining agreements. Also, fees would by very hugh for participants if we need to maintain 2 plans before obtaining the letter.

Any help would be appreciated.

Can someone point me to the reg # regarding safe harbor plan amendments?

(ie. what's allowable (not much I know) and what is not)

We have a client currently doing the safe harbor match. They want to add auto enrollment to the plan in 2015 but with all the chaos at year-end, want to implement the auto enroll effective March 1st or so, instead of January 1st.

This has been driving us crazy. Wondered if anyone had an opinion.

You have a plan with Husband and Wife only. Wife sets up a plan. Both Husband and Wife have separate 1-person businesses, (hers corporate, his S/E) but they don't quite meet the "spousal noninvolvement clause" so they are a controlled group. To pass 401(a)(26), you can't EXCLUDE the husband from the wife's plan. Plan compensation is high-3 of plan PARTICIPATION. Husband receives zero income from wife's business, and vice versa.

First year of plan, husband doesn't do as well as anticipated, and has negative schedule C income, wife makes gazillions of dollars.

One school of thought says you fail 401(a)(26) because husband doesn't accrue a benefit. But he doesn't accrue a benefit because he has zero compensation! I can see that the letter of the law would appear to say this fails, but it is such a ridiculous result that it is hard for me to accept. And how do you provide the benefit if he has zero compensation? Do you go ahead and an 11(g) amendment to provide a minimum benefit under the de minimis rules allowing up to $10,000, even though he had zero compensation?

Or, do you consider some mathematical heresy such as he is accruing whatever benefit is provided under the plan, and is accruing 100% of zero, so this is ok?

Has anyone ever encountered anything like this?

A small 403(b) plan is considering paying (using forfeitures) surrender fees for those participants who roll the balances into a new 401(k) plan. However, this would not apply to terminated participants who take their money in cash. I believe this would be discriminatory. Am I correct? Would surrender fees be considered a valid plan expense? I believe they would.

Thanks

We know 409(n) prohibits a 1042 elector from receiving assets attributable to, or allocable in lieu of, securities acquired in a 1042 transaction. What if the employer makes a cash contribution to the plan, allocated to all eligible participants (including the 1042 elector)? I don't see that such a contribution violates the allocable in lieu of provision, because it is not being made in lieu of anything. However, if that cash is then used to recycle shares, assume all of which have the 1042 taint, the elector's cash can't be used to recycle, agree? Net result being the employer will have to make a larger cash contribution to fund the recycling because any amount that goes to the 1042 elector will not be available for recycling, and the elector will have an increasing cash balance if the recycling process continues. Is there any basis in the code that would keep the elector from receiving the cash in the first place?

We took a one person plan over that was originally effective 1/1/2012. The average monthly compensation calculation is currently using the K-1 compensation (net income minus 1/2 se tax) for the years 2009, 2010 and 2011. Compensation has decreased since then so the benefit is likely to remain based on these three years. There was an amendment to the plan in 2012, prior to any valuations being done, and shortly after the plan document was executed, to change the average monthly compensation definition section of the plan document to say 2009 compensation in excess of $100,000 will not be taken into account for purposes of the average monthly compensation calculation.

Is this permissible? At first I thought no because it is essentially amending a compensation from three years prior. But the more I think about it the more I think it may be ok. It's essentially amending the benefit formula indirectly (not sure why they just didn't go that route). Thoughts?

I have a potential Client that has a possible controlled group issue.

Facts:

2 business with the ownership as follows

Co. A Co. B

Husband 55% 55%

Wife 35% 0%

Unrelated Partner 10% 45%

Are Co. A & Co. B part of a controlled group given the wife owns 0% of Co. B?

It seems like the same 5 or fewer do not own 80% since the wife owns 0% of Co. B but I didn't know if the husband and wife are considered to be a single entitiy.

Thanks

Can I discontinue a SEP as of 9/30/2014 (calendar year is the plan year)? Effective 10/1 we want the Er contributions to go to the new 401k/PS plan.

In this case there were losses. They were overstated for the intial refund which was processed timely. During audit, an error was found. Now we are beyond the deadline but within the correction period. Would the amount on the 5330, Schedule H, Line 1 be the amount of the late contribution refund or the entire excess contribution?

I posted this question a few weeks ago but am hoping I might get a better response. When doing the participant count for a school are substitute teachers no longer considered participants. Their eligible to participate immediately. They don't receive the employer match but can do their own contribution. However they may work once a month or every other month. I've talked to DOL, IRS and TIAA CREF and none have a good answer to this. They point to the definition of a participant which I understand but this unique circumstance is difficult to apply. Thanks in advance for any guidance.