Client owned a corp for many years. Recently sold it.

Formed LLC. Wants to maximize deductible contributions

Can hi 3 average salary for years of the previous company be used as comp in a new DB plan?

An employer is considering the implementation of a Fiduciary Indemnification Agreement for the 401(k) plan's named fiduciaries. Has anyone had any experience with these agreements, drafting one, or had to test the effectiveness of one? It sounds like a terrific thing to have, but I'd like to hear from those with real world experience. Does it mean that the company would cover the legal costs of the fiduciaries and pay any costs that might be incurred if it's determined that the fiduciary(ies) breached their his/her duty?

Does anyone out there think there is a niche in our industry to own or partner with non-competing Payroll Companies? I've been approached by a payroll firm that is owned by prior long-term employee of a TPA Firm trying to break through to our industry. They offer revenue sharing to market payroll products to current and prospective clients and outsource to them. This has some advantages I see in doing away with census requests and waiting until the 11th hour to get the client to send us their data. They would process payroll deposits and send the 401(k) money directly to the vendor, among other things..... This would allow the TPA to provide quicker service and offer more of a one stop shop to the client.

We currently work with payroll companies and are able to get reports but there is always that fear that they are two steps away from stealing the client and obviously there is no revenue sharing involved.

Just curious as to what others are doing and what opinions are out there.

My company has decided to make the leap into full service penson adminstration. I have done full service before but it was an existing business. What I'm looking for is some one to help me out and is willing to share their existing letters, forms ie new client checklists, takeover letters/checklists, year-end census/ information requests. Stuff like that.

I am not interested in stealing anyone's clients, etc.

I have a plan that gave the SHNEC notice for 2013. They renetly went out of business. Since they committed to the 2013 contribution its my understanding that there is no way around it, right? If it's not made, its an operation failure and disqualifying event. The plan is also top heavy for 2013. So if the plan wasn't safe harbor the 3% top heavy would would need to be made or it would be a top heavy viloation and also a disqualifying....

Anyone else ever have a plan where the safe harbor contribution was never funded?

Can a governmental 401(a) plan define a year of service for eligibility purposes to be 1,500 hours in a 12-consecutive month period?

I am in the process of setting up a new safe harbor 401k plan for a company when I find out that there are 3 other companies entirely owned by the same persons.

Do the other companies have to be included in the plan? That is, do they have to be offered the opportunity to enroll into the plan as well?

Can just the one company have a plan and the other 3 not? Or can they have 4 separate plans?

Sorry for the many questions, I am just getting back into pension adminstration after a 2 year lay off.

Parents are over age 70.5 and still work for the company. Their son owns 100% of the company. I cannot find any reference to family attribution rules, or mentions of Key employees, in the RMD chapter for 401(a)(9) http://www.irs.gov/pub/irs-tege/epchd603.pdf.

In Section 416, the definition of a 5-Percent Owner does not mention attribution (http://www.law.cornell.edu/uscode/text/26/416). You would use attribution to determine who is a Key Employee, based on ownership, but this does not seem to relate to RMD.

I read previous posts that say the family attribution rules still apply, but I can't find a source on that. Anyone have something I can show to the client proving they are/aren't subject to the RMD exemption for Non-5%-Owners.

Section 416

(B) Percentage owners

I submitted the 5500-SF of the seaon on Friday, September 5 via EFAST2.

As of this posting, the IRS/DOL still have not released the attachments and the 5500-SF that can be viewed on the website is unsigned, undated. I do not recall this delay in prior years. Obviously, the review is to ensure the attachments do not contain profanity, pornography, political, racial, or other writing or images that do not pertain to the filing. Seems to me this can all be covered in the agreement.

(1) Is this delay unusual or now the norm?

(2) More important, when the IRS/DOL releases the form, will it show as signing date the form was submitted (i.e., September 5) or the IRS/DOL release date. If the later, then this could pose problems if submitting forms towards the October 15 deadline.

Client with an ongoing safe-harbor 401(k) plan is considering putting in a Defined Benefit Plan (no PBGC coverage) with expected contributions above 31% of pay. Any 404(a)(7) issues in the first year with the new MAP-21 and PPA rates?

For example, assume two participants in 2014:

Salary 401(k) derral safe harbor match

A $200,000 $23,000 $8,000

B $30,000 $3,000 $1,200

Under the new DB plan for 2014 the MAP-21 minimum required contribuiton would be $75,000 and the PPA maximum would be $100,000.

What would be the maximum allowable combined deduction?

Thanks in advance for all responses.

Hopefully someone from the booming oil production regions knows this without me having to hit the books, thanks

A CPA is insisting that the one of the partners in a husband/wife partnership share of k-1 income on line 14a, which is less than the Guaranteed Payments shown near the top of the k-1 statement (forget the line item) should NOT be used for the pension calcs and further should not be split between compensation and contribution. Essentially he seems to be saying that the guaranteed payments would be treat like unto w-2 wages for a corporation in that they are not reduced or split by virtue of the contribution made on behalf of the owner. I did not have that understanding, but I learn new things from time to time, and would appreciate any others' opinion on this. thanks in advance.

Plan sponsor wants to close the plans to new participants while continuing to accrue benefits for existing participants.

A couple of questions:

Must the 40% participation test, the 410(b) and and the plan's average benefit tests include the employees that - in the absence of this freezing- would qualify to participate?

I vaguely remember that it may be an exception for frozen plans, but I am not sure.

Any citations?

Usually when freezing a plan, the amendment simply replace the plan accrual formula with 0.0%. Any special language for an amendment that continue accruals for existing participants but close the plan to new participants?

Any potential pitfalls - excepting the employees happiness- I should be aware of?

Thanks for your help

I just heard from a business owner that she was told that RMD's did not apply to SEP IRA's. Is this true?

Took over a small DB plan that excluded two physicians by name and highly compensated nurse practitioners. For the past 5 years, they have only had 4 physicians who met the eligibility requirements. All were HCEs and Keys. The plan passed 401(a)(26) in past years as 2/4 = 50%, which is greater than 40%. They now also have 3 nurse practioners who met the eligibility requirements. All happen to be HCEs and are therefore excluded from the plan. One NP was given a 1/2% of pay accrued benefit to pass 401(a)26. This was done with a corrective amendment.

The employer also happens to sponsor a profit sharing plan. In this plan all the NP's are excluded (they are all HCEs) so no problem with testing across both plan.

The DB plan indicates that the top heavy minimum is provided in the profit sharing plan.

Question: By bringing in the 1 HCE Nurse practitioner, they passed 401(a)26. Since she was not covered under the PSP she received no Top heavy minimum in that plan. Must she get a 2% top heavy minimum in the DB?

Employer started a new 401(k) safe harbor plan in August 2013. Problem: The employer has only been making quarterly contributions of the participant deferrals, as well as the safe harbor 3% contribution. His first quarterly contribution was made mid September 2013, and every 3 months thereafter. Therefore, this first quarterly contribution included about 1 1/2 to 2 months of salary deferral contributions that hadn't been withheld from participants comp yet. There are only 3 participants total. The owner is self employed, so his "early" contributions really aren't an issue. It is basically the other two participants that are an issue. And to complicate matters further, all 3 participants have self directed brokerage accounts. The employer does not want to make a PSP contribution for the 2013 year.

Among the many issues that are presented, what are the issues with the early deposit of the participant contributions? Can he just "go forth and sin no more" (start making contributions with each paycheck going forward)? If he does this, is the concern that the IRS would audit the plan and require him to reclassify the "early" participant deferrals as a PSP contribution instead? Which of course would mean that all the allocations from the beginning of the plan would be incorrect? Any other problems this would present if he doesn't reclassify it as a PSP contribution?

I started with a new company part time in May and changed to full time in June. Our benefits plan year begins July 1st. My company only offers a HDHP with HSA which I was not eligible for until August 1. Because I started part time in May, I was able to elect some benefits to take effect July 1st and was told by HR to elect health by July 31 to take effect August 1 on my eligibility date.

I erroneously elected for a general purpose FSA that started in July. When I elected the HDHP on July 31st I checked the next day and did not have coverage. Human resources informed me a few days later I could not have coverage with the HDHP because I had the FSA which made me ineligible for the HSA.

Is this the usual protocol? I now know I cannot have both a HSA and a FSA. Would my not being eligible for health insurance until August 1 allow a change in status for my FSA? I wish human resouces had alerted me not to choose the FSA when I was inquiring of them about my eligibility date for health insurance.

I just was asked by one of our defined benefit plan sponsors for the amount of a lump sum that was paid in 1987. I am unsure if our firm even administered the plan back then, and we certainly don't have information pertaining to the lump sum. Does anyone have any suggestions of how I might go about researching this?

Thanks!

I've found that an employer with a SARSEP can only add a 401k mid-year if they adopted a prototype (and not the 5305A-SEP). Is there any way to get my hands on such a document? The Plan was with Fidelity but Fidelity indicated that they used the 5305A-SEP.

Beyond the annual Certificate of Participation and the periodic Summary Plan Description is there any requirement to provide notice to a participant that they are eligible for a distribution from the plan?

Normally the distribution election forms and information are sent to the participant upon termination, retirement, etc. but if the terminated participant does not respond are you required each year to remind the terminated participant of his/her eligibility to receive there benefits?