Client's partners are mistakenly participating in cafeteria plan (. What is best solution to wrongful participation?

A. Stop accepting partner contributions asap but let them utilize benefits until they hit their $2500 limits.

B. Stop accepting partner contributions asap and return any unused funds.

C. Let them participate through the plan year end and do not let partners enroll in the future?

D. Terminate plan and start over with a new plan which will be administered so that partners can not participate

E. Some combination of the above or, an alternative solution

Any other issues or points?

Thanks.

Is it possible to add mid-year? What if we amend today have it effective 3/1/2015?

An employer is going to offer an HDHP (in addition to their “regular” health insurance plan) to employees, and will add an HSA to their cafeteria plan at the beginning of the year. (The health FSA will be limited for those participants with an HSA.) Can the employer contribute $100 per month to ONLY the employees’ HSAs that elect the single coverage HDHP, and pass nondiscrimination testing?

It is my understanding it should pass the eligibility and availability tests. Further, in order to test for BOTH the utilization and the 25% key concentration test, BOTH employee pre-tax salary reduction contributions and the employer contributions will be added together and tested for both of these tests? And further, there is no nondiscrimination test that requires the employer contribution to just be considered alone?

Dumb question - suppose you have a leveraged ESOP that you know will fail 409(p) testing in first and probably many subsequent years.

You can exclude these people. Is there any reason that the exclusion must be irrevocable? In other words, most plans now seem to have standard "non-allocation year" language to prevent a prohibited allocation. But is there any reason, from a plan design standpoint, why they can't just be put in an excluded class, and amend the exclusion out of the plan once they reach the point where 409(p) testing can pass?

Or, can they NOT be excluded, and just rely on the non-allocation year language so that they in effect just don't receive an allocation for as long as a non-allocation year would come into play?

My wife and I are independent consultant and both own 50% each of our LLC. What would be the best retirement plan to setup for the LLC to contribute to a plan and use that as a tax deductible business expense to the LLC before profit.

The LLC is taxed as a Corp. and we do not issue any W2's to anyone, We issue 1099's for contractors to pay their taxes via their individual 1040's, if there is any profit as a result of the LLC we will issue W2s to ourselves, but its very little. [edited for better clarity]

The LLC make about $10,000 - $15,000 per year.

Would like to have the flexibility to contribute when times are good and not when there is no profit.

can an employer make a 3% nonelective contribution instead of the 2%? I have a client who had a great year and they want to contribute 3% instead of just 2%.

THanks!

In the olden days, I used to draft documents with a Normal Retirement age of 65 and 5 (or 10) and Early Retirement age of 55 and 10.

During EGTRRA restatement days, I began moving Normal Retirement Ages down to 59 1/2 for a lot of DC Plans. Now I'm starting PPA restatements and am wondering why I'm defining an Early Retirement Age as a different (lower) age. The document appears to only grant "early retirees" some accelerated vesting.

I'm leaning towards a 59.5 retirement age as both Normal and Early - no distinction.

No real question here. Just looking for some feedback.

A small S.H. 401(k) is considering adding an after tax option in order to go above and beyond the 415 limits. There recently has been a lot of press regarding the ability to convert these contributions to ROTH IRA down the road. What are your thoughts on adding such an option to a plan?

A defined benefit pension plan is currently frozen. The plan covers the owner & his wife and two nhces. Even though the plan has been frozen for a few years the sponsor is still making contributions as allowed under 404.

The two nhces are eventually paid out their present value of accrued benefits. At the time of their distribution the plan had excess assets. In a subsequent year (i.e the 2 nhces had been paid out in some prior year) the plan, which is still over funded, is terminated and the excess assets are allocated to the owner & his wife and distributed. The amounts distributed are under the 415 limits.

Is there an issue with 401(a)(4) in particular or any other qualification issue?

The recently released Rev. Proc. 2014-61 announced many cost of living adjustments for various tax provisions. Buried in Item 26. appears to be a new definition for High Deductible Health Plan featuring significantly higher minimum required deductibles effective in 2015. This is compared to the amounts previously announced in Rev. Proc. 2014-30 back in April. The change is raising the minimum deductible from $1,300 to $2.200 and from $2,600 to $4,450 for individual and family coverage, respectively.

Am I reading this correctly? It's making me nervous that I have seen no coverage of this issue.

Client A owns two companies. The first company employs all non-family members. The second company employs his wife and three minor children, twins that are 7 years old, and a 2 year old. The client wants to start a 401(k) plan and have the two companies be part of a controlled group.

Question - are the minor children truly eligible for the 401(k) plan? What would that do to year end testing if they were?

Do I need to be concerned if the company being acquired has no retirement plan? Will they be included for coverage test?

We were considering the delivery of the restated PPA document by electronic delivery as opposed to a bound paper copy.

One concern is that no one will have an original signature on the documents.

With so many clients going paperless, is it still required that the client maintain a copy of the plan document with original signatures?

Will this "pass" in an audit?

ok, since I am posting this it is questionable as to whether it is humor or not, certainly as questionable if not more so than any posts on the pension board I make.

warning: read at your own risk, maybe best on an empty stomach.

............................................



Fred was in the fertilized egg business. He had several hundred young'
pullets,' and ten roosters to fertilize the eggs.

He kept records, and any rooster not performing went into the soup pot and was replaced. This took a lot of time, so he bought some tiny bells and attached them to his roosters. Each bell had a different tone, so he could tell from a distance, which rooster was performing.

Now, he could sit on the porch and fill out an efficiency report by just listening to the bells. Fred's favorite rooster, old Butch, was a very fine specimen, but this morning he noticed old Butch's bell hadn't rung at all!
When he went to investigate, he saw the other roosters were busy chasing pullets, bells-a-ringing, but the pullets, hearing the roosters coming, would run for cover.

To Fred's amazement, old Butch had his bell in his beak, so it couldn't ring. He'd sneak up on a pullet, do his job and walk on to the next one.

Fred was so proud of old Butch, he entered him in the Brisbane City Show and he became an overnight sensation among the judges. The result was the judges not only awarded old Butch the "No Bell Piece Prize," but they also awarded him the "Pulletsurprise" as well.

Clearly old Butch was a politician in the making. Who else but a politician could figure out how to win two of the most coveted awards on our planet by being the best at sneaking up on the unsuspecting populace and screwing them when they weren't paying attention.

Vote carefully in every election, you can't always hear the bells.

If employer says "I'll contribute $300/month/employee towards the small group age banded premium" won't that violate the ADEA regs which say it's OK to require all employees to pay the same percentage of their actual premium but a violation to charge older folks a higher dollar amount?

Can anyone provide some guidance here. We are having a discussion in the office as to what constitutes number of days in the denominator when calculating lost earings.

Employee A did not receive a $1000.00 salary deferral contribution to his account that was due 7/1/2014. The deposit is not made until 10/1/2014.

From the Alliance investment statement, the rate of return for the period 7/1 to 9/30/14 was 10%. What would you calculate his lost earnings to be?

There are two schools of thought in our office. First group say his lost earnings would be $100. (1000 x 10% x 92/92)

The second group say $25.20. (1000 x 10% x 92/365).

The language on the Department of Labor website talks about 'annual' or 'annualized' rate of return for lost earnings calculation. How is the calculation affected when the rate of return is per a period less than one year?

I have filed a 5500 EZ for a Sole proprietor in 2012 and 2013 with the owner's social security number for sponsor's EIN. Yesterday the client received a letter from the IRS saying that the 2013 had the wrong EIN. They stated that the form had the owner's social security number and gave a number that they said was the correct one. The owner has no idea what this number is or where it came from.

Does anyone have any suggestions?

May an employer's ERISA-governed health plan make void a participant's attempted assignment of his or her right to get a payment concerning a covered medical service?

An employer maintains a health plan. For the plan's eligibility provisions, the plan defines a full-time employee as one who regularly works at least 40 hours a week. Being a full-time employee is among the plan's conditions for eligibility.

A consultant told the employer that it cannot maintain the 40-hours condition, and must change it to 30 hours. The employer replied that it is fully aware of the play-or-pay excise tax, and nonetheless prefers to maintain its 40-hours condition. The consultant continued to assert that the employer MUST change to 30 hours.

Apart from offering coverage so as not to attract a play-or-pay excise tax, is there some other law that constrains an employer's choice about which of its employees is eligible for its health plan?

Should a plan sponsor include language that the plan intends to be 404© compliant in their annual QDIA notice? I can't find that it's required, but it would seem to make sense to me to put it in there. thoughts?