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.

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