notes on running minimum distribution globally, and how to compare the results from the report I use with the standard (not crystal report) that is generated by Relius 70 1/2 distribution calculation. and notes on how to get that to pull the correct account balances if you ever wondered why it doesn't!

I use my own crystal report (which I have to update every year - mainly for certain dates that I have print)

this report is not intended for DB plans.

when you run this under report writer it will save a separate file for each plan that it finds a needed min distribution. depending on the size of you database I'd expect it to run about 1/2 - hour to produce and save reports, all in one spot.

of course, it is a use at your own risk, but I haven't encountered any problems (as I cross my fingers). generally we run this on a single plan basis each time we run a val, but what the heck, we are getting near the end of the year...

notes on how to run global report.doc

checking my report with relius report.doc

Min Distributions 2014.rpt

Every year in my memory, the IRS has announced the COLAs for 415, HCE, etc., the same day as the Social Security Administration has announced the new wage base. But SSA issued its announcement this morning, and there has still been nothing from IRS. Anyone know what the hold-up is?

Am thinking I had previously found a good discussion on this issue either here or elsewhere but I cannot seem to locate now. I am trying to come up with guidance to employer on how they are required to handle the final paycheck / compensation amounts being paid in connection with a merger.

Here seller has monthly payroll, deal is expected to close Nov. 21st. Buyer is requiring Seller to terminate 401(k) Plan immediately prior to closing. Seller will continue post-closing as a subsidiary of Buyer and will continue to employ existing employees but they will be eligible to participate in Buyer's 401(k) post-closing.

The paycheck for November will not be delivered until end of the month and so after closing. They care concerned about having any additional contributions hit the terminated plan after the closing date, even if the amounts are pro rated so that only 401(k) contributions on comp earned up through the termination date is used for plan purposes. Payroll provider is saying they cannot pay early or pro rate deferrals, etc. to help out.

Am curious as to what folks see as the usual and customary procedure here and whether there is any flexibility. We seem to see and hear different things from different recordkeepers, prototype plan sponsors and payroll administrators.

Thanks

When doing a valuation for a new solo-practitioner DB plan, where there is no past-service, we've included the current year comp in a BOY val for the first year, but not for the subsequent years. I assume that, if there was past-service, then it would be inappropriate to include current year comp even in the first year (with a BOY val). Is this correct? Thanks for any responses!

Our office is considering moving to Relius ASP - Managed Services where they'll host our use of the application and we can eliminate having servers to update, upgrade and maintain in our office. Does anyone have any experience with their Managed Services that they'd like to share. Leaning toward moving in this direction. Thanks!

A law firm recently amended their plan to allow for retired partners to participate in the plan. They had an attorney draw up the amendment but they did not prepare a Formal Record of Action of the Partners (Partnership) or a SMM. I told them they needed both and prepared the forms for them. They do not want to sign the Formal Record of Action of the Partners nor distribute the SMM.

Can they adopt the amendment without signing the Formal Record of Action of the Partners? I've never prepared an amendment with out it or a Corporate Resolution.

they just released the CPI-U factor about half hour ago.

so for July-Aug-Sept

we have

238.250

237.852

238.031

based on the regs this means the limits for next year are

(assuming my spreadsheet still works)

catch up 6000

deferral 18000

comp 265000

415 limit 53000

db limit 210000 (no change)

key 170000 (no change)

hce limit 120,000

I'd expect the IRS to release these figures shortly

Company A sponsors a single safe harbor 401(k). Company A has an office in Dallas and an office in Tampa. The safe harbor 401(k) plan is set up so that employees in the Dallas office are eligible to make deferrals and to receive safe harbor contributions immediately after completing 6 months of service. Employees in the Tampa office are eligible to make deferrals and receive safe harbor contributions after completing a year of service and attaining age 21. May a single safe harbor 401(k) plan apply these different eligibility rules? Thanks.

Manufacturing Inc is owned 100% by Chris.

Marketing Inc is owned 50%/50% by Chris and Chris Jr (age 25).

Manufacturing Inc pays Marketing Inc $100K per year to do marketing for Manufacturing Inc's products.

Marketing Inc only does marketing for Manufacturing Inc; it has no other clients.

This can't be an affiliated service group since neither is a service company.

Is this a controlled group?

Is Marketing Inc allowed to operate a 401k plan for just Chris and Chris Jr?

If so, what profit sharing contribution limits apply? The standard 25%?

I ran into a non-profit that has been contributing 5% each year to a SEP plan and they also have a Non-ERISA Plan where the employees are also contributing.

My understanding with non-profits where the employer is making a contribution, there required to have a ERISA Plan doc.

I can't find anywhere that says what there doing is not allowed. Can they have both or are they in violation of ERISA?

Need help in code, if available, to direct this client.

Thanks

SEFinnegan

We recently merged a few Multiple Employer Plans into a new Multiple Employer Plan effective 6/1/2014.

As part of the merger, there were forfeitures associated with the old Multiple Employer Plans that were transferred into the new Multiple Employer Plan.

Can we use the forfeiture money in the new Multiple Employer Plan to pay plan expenses (final 5500 fees) for the old Multiple Employer Plans that were merged into the New Multiple Employer Plan?

Any help is greatly appreciated.. ALEX

Working with a client who makes frequent acquisitions - I'm looking to provide a listing or checklist of items that are relevant to consider during the acquisition process - instead of creating something from scratch, I'm looking to see if anyone has or can direct me toward such a checklist - not something that's full of legal verbiage - something simple that can get topics like the following considered:

Identifying the type of plan if any in existance

Ability for participants to take distributions

Identifying loan issues - in particular abilty to rollover or continue making payments on loans

Vesting - need / option for giving vesting based on service with the acquired entity

Plan eligibility - need / option for recognizing service with the acquired entity for plan entry based on the transaction date

Termination of plan pre-transaction vs. post transactoin merger

Identifying directed investment and SDB arrangements and what having either means to participants - i.e. consider that plan with SDB going to plan without those participants may have to give up their SDB.

The more basic the better.... Thanks in advance...

I’m trying to get a better understanding of controlled groups. This should be a straightforward situation that I think I’ve made too complicated and confused myself. I’m trying to determine if a controlled group exists in the following situation:

Company A Company B

Owner 1 50% 33.33%

Owner 2 50% 33.33%

Owner 3 0% 33.33%

-Owner 1 spouse is an employee of Company A

-Owner 2 spouse is an employee of Company A

-Not a community property state

Based on the amounts above, the common control in Company B is less than 80% (66.66%) so no controlled group. But I’m getting confused on the attribution (if any) to the spouses. I know the spousal non-involvement exception does not apply since they are employees so would the calculation look like this?

Company A Company B

Owner 1 50% 33.33%

Owner 2 50% 33.33%

Owner 3 0% 33.33%

Owner 1 Spouse 50% 33.33%

Owner 2 Spouse 50% 33.33%

If so, would common control in A now be 200% and 133.33% in B resulting in a controlled group?

I have a plan that normally passes ADP easily and fails ACP (after-tax, no match) by a small margin. We use borrowing or shifting to pass the ACP test. We are considering changing the plan in a way that we think will encourage more after tax contributions by HCE's. If the passing margin of the ADP test is not sufficient in the future to cover the ACP test through borrowing or shifting alone, can we recharacterize pre-tax contributions as catch-up contributions to pass both tests, even though the ADP test passes without it?

If I want to write the plan document so that it gives the Owner's the maximum lump sum under 415, do I need to include how that is calculated.

Basically, we want the owner's to get the max each year without having to amend each year.

Is there a better way to write it so they owner's get the maximum allocation?

Thanks for your input.

a small C-corp has appx 4mil in assets in its non-leveraged esop. It's a plain vanilla esop. Strictly employer stock, no employee funds. The plan sponsor is considering shutting it down. Of course the main question is has the plan served it's purpose. The company is eyeballing a 401(k).

It is my understanding that the plan does not need to be frozen and that a resolution signed by the board can effectively start the termination process and cease future funding and an optional letter of determination on termination can be pursued.

The company is in good shape financially, is not being sold or going public and the plan has been in existence for several decades.

One question, do terminated participants with account balances as of the last valuation date (12/31/13) and who have not been paid out as of resolution to terminate become fully vested?

They are not considering employer stock as an option in any successor plan at this time.

My client's traditional defined benefit plan is doing a lump sum window and hopes to open it up to alternate payees. The recordkeeper has suggested an approach that would simplify the eligibility of potential alternate payees to elect a lump sum. If there is a divorce decree and the decree mentions division of the pension, then further documentation is requested from the participant and/or his/her soon-to-be former spouse. If no division is mentioned in the decree, then no further documentation is mentioned and the only change that will occur is a change in marital status for the participant from married to single. Does anyone have any reason to object to the taking of this type of approach?

Much has been written about a requirement that a non-insured group health plan obtain a health plan identifier [HPID].

But if the only thing the plan does is pay or deny a claim submitted by a participant, when (if ever) does such a plan use this new identifier?

I have a profit sharing plan that has old MP money that still follows a vesting schedule.

When reallocating forfeitures of the MP money, must that money stay in that source?

What's happening is that participants are receiving small amount of forfeitures in that source, and then they terminate before becoming 100% vested and then they have a small amount of forfeitures to reallocate and so on. I only have 319 in forfeitures to allocate among $5,000,000 in comp. Someone earning $45,000 is getting less than $3.00.

I'd like to allocate all the forfeitures under the profit sharing source if that's allowed.

any other suggestions on how to handle these forfeitures?

For an owner-only 401(k) plan, how should fractions of cents be allocated when allocating investment earnings to the various subaccounts (pre-tax, after-tax, Roth subaccount etc.)? How often should earnigns be allocated and rounded to cents (if at all)? Should the subaccount balances be carried forward rounded, or if not, with how many decimal digits, after each accounting period (plan year or contribution/distribution events from/to subaccounts)?