Have a distribution due to death in a 401k. The bene is a trust. Due you withhold 20%? If so who gets credit for the withholding the decedent or the trust? Thanks.

If a full time employee under a payroll deduction loan changes status to part time or temporary, it is likely he will default if his pay is less then the required quarterly repayments. Is the only remedy to default?

And what about an employee who terminates and is then switched to ACH form of repayment - this employee is later rehired. Do the repayments have to continue as ACH or can he go back to payroll deduct?

I am interested in any comments or experience with this.

Thanks!

Had a participant in one of our plans say their previous employer would not allow the $5,500 catch up contribution to be Roth. So they could do Roth for 17,500 but the additional 5,500 had to be pretax. I have never heard of this as a feature of a plan. Anyone know why this would be a feature of a Plan?

Thanks.

The employer deposited its 2012 Safe Harbor contribution in December 2013. However, the money sat in the cash account. The funds are still in the cash account, unallocated.

How soon must deposits made to individual-account plans be allocated to those accounts after the funds hit the trust?

(Similar question for the Profit Sharing contribution)

We have a non-governmental 403(b) plan with just pre-tax and after-tax contributions. Is the plan considered an ERISA plan and required to perform ACP testing?

Lets say I have $250,000 of excess DB assets I am transferring to a QRP. This was a one person plan and the DB participant will be the only participant in the QRP. Lets say his annual compensation is $50,000.

Can I allocate $50,000 per year to his DC account since that would be his 415 limit, or do I need to be concerned with the 25% deduction maximum?

Seems like I am not taking a deduction, so the 25% limit shouldn't matter, but I am having trouble believing it is ok.

Lots of documents have provisions that forfeitures will be used in the plan year following the year in which the forfeiture occurs. This seems particularly common in plans where forfeitures reduce. This seems eminently reasonable, as a forfeiture might not occur until late in the plan year, when matching contributions, for example, have already been funded.

Back in 2010, the IRS published in Volume 7 of their employee plan news, a blurb about forfeitures, and basically stated that they must be used in the year they occur. In spite of this, I think they have no problem with a plan provision that requires use by the end of the FOLLOWING plan year if it reduces. I think their concern was basically forfeiture "suspense" accounts that weren't being used promptly, or were being used in a discretionary fashion.

Anyway, some of the new pre-approved plans state that the forfeitures must be used by the end of the next year, but don't necessarily allow an option that they WILL be used in the next plan year.

Do you really see any problems with a 403(b) document, which of course isn't pre-approved, (or approved at all, for that matter) having a provision stating that forfeitures will be used in the year following the year in which the forfeiture occurs? (And the forfeitures reduce matching contributions)

Divorce issue is that spouse won a wrongful termination lawsuit prior to our marriage, and was awarded $54,000 which she deposited into a CD, and it has been sitting there ever since.

Now, the balance of her 403b is $184,000 dollars attained during the marriage.

Her claim now in the settlement is that her 403b balance is offset by the $54,000, so for settlement purposes, she only needs show $150,000 as a marital asset.

My question is: Is that even possible?

Seems as though deferred compensation is meant to be from your employer and that it must be “deferred” by the employer into the plan, no other way.

Can a lump sum of cash somehow find its way into a 403b any possible way?

I have an self-employed client for a defined benefit plan. The contributions he made so far satisfies the minimum required contribution for 2013. But he wants to put more contributions after 9/15 but before 10/15. His personal income tax is on extension (10/15). Can he make more contributions after 9/15/14 for the plan year 2013? Are those contributions deductible?

In the SB instruction, I can only report any contribution made within 8.5 months after the end of the plan year. If those contributions are deductible, does it mean I don't list them in the SB but I report them in Form 5500EZ?

Any ideas? Thanks!

Suppose you have a non-governmental, tax-exempt 457(b) plan. No deferrals, just employer nonelective contributions only.

Now, suppose the employer's contract with the employee states that a specified amount (X) will be contributed each year for the employee. There is no language in the plan itself that states this. No Rabbi trust is in effect.

The employer never "funds" this - yes, I know, it is an "unfunded" plan anyway, and assets are general assets of the employer.

The point being that the employer is now in financial difficulty, although not yet, at least, in formal bankruptcy, and a terminated participant wants his money, and there is no money.

Am I correct in assuming that state law/employment/contract law would govern the remedies available to this participant? The plan provides, under claim procedures, that after jumping through the appropriate hoops, the participant may avail himself of the remedies under ERISA 502, but what does this really mean in practical terms?

Does this participant have rights that supercede those of other creditors, until such time as they are in bankruptcy, or is that again based on state law?

This is all a new one on me...

We took over the plans of a non-profit controlled group - three distinct entities, each with their own plan. Their approximate 2013 demographics are:

Corp - 519 NHCEs, 1 HCE, profit sharing only plan (they also have a non-ERISA 403(b) plan for this group)

CA - 20 NHCE, 0 HCE, 401(k) plan with match

HA - 50 NHCE, 0 HCE, 401(k) plan with match

The CA and HA plans are identical

I believe coverage is OK for 2013 as the only benefitting HCE is in the profit sharing, and that test is (1/1) / (519/589) > 70%.

However, one employee of CA had comp > $115K in 2013, so she will be an HCE for 2014. I think that will blow this arrangement up, as the deferral and match tests for 2014 will be (1/2) / (69/588) = 23.5%. Obviously, this would be Bad News. So...

1. Please tell me that my math and/or logic is completely off and everything works out fine.

2. Can I use a QSLOB election to group CA & HA and get around this?

3. If not, is there another way to pass coverage? I haven't looked at average benefits, but I suspect that having 500+ participants getting no benefit will sink that test, too.

4. I'm going to assume that the plan sponsor would like to avoid bringing in 206 - 69 = 137 employees of the Corp into one of the 401(k) plans and giving them QNEC/QMAC allocations to pass coverage. Is there another option?

Thanks.

Company recently terminated an employee for embezzlement who was 100% vested in his Account (all employer money) The plan document (a nonqualified deferred compensation plan) does not contain any forfeiture for cause provisions. ER does not want to pay. Are there any repurcussions for not paying - from a 409A perspective or otherwise? Any case law similar to this scenario? What do you see as a potential solution for this ER?

Looking for help in trying to understand how earnings are being calculated for my QDRO. The Plan Administrator is only reachable for inquiries via a letter or fax. So looking to try and understand asap so I can get some sleep tonight.

The QDRO stated the alternate payee (ex-wife) is entitled to $96,869.62 as of 05/09/2012, plus earnings, or minus losses. The amount that was transferred to the alternate payee was $134,090.40 as of 08/21/2014. My 401K account earned roughly 7% from 05/09/2012 - 08/21/2014. So trying to understand how the earning was calculated at $37,220.78.

401(k) plan was established in 2013. Plan sponsor wants to terminate the plan now. Two owners rolled money into the plan at inception. The only other money in the plan is 401(k) money of the participants; despite initial intentions no employer contributions have been made to the plan. No loans were ever taken on the rollover money (or any other money for that matter).

A couple of questions:

1. Would the IRS have a permanency issue with this plan terminating? Although I know it is subjective most opinions suggest two years for a DC plan with employer money. Not sure why it would be different if there is not employer money.

2. Assuming there is a pemanency issue what would be the cosnequences? Employee deferrals & trust earnings counted as income? Initial rollovers disallowed? Anything else

Thanks in advance for any guidance

Employer has employees spread out all over the country. Many of these employees are unionized and participate in various multiemployer welfare plans depending on their locations.

Employer is concerned about the Section 6056 reporting requirements for 2015 (i.e., providing information whether it offers its full-time employees with affordable, minimum value coverage). It does not have information about the employee contribution for coverage under the multiemployer arrangements (it generally only knows its contribution to the funds). Employer is particularly concerned that the funds may not be willing to share this information with the employer.

The final section 6056 regulations provide that multiemployer funds are "permitted" to submit 6056 forms with respect to the full-time employees that participate in the funds but also that the employer is ultimately responsible for the filing. The IRS declined to require multiemployer funds to submit the form or even to provide information to employers with respect to information that it has in its possession.

Do you see multiemployers funds being willing to cooperate with employers in providing information so that employers will be able to satisfy their section 6056 obligations? Do employers have any recourse to obtain this information?

Thanks for any help you can provide.

We're terminating our plan due to M&A. We stopped taking money 2 days before the last payroll, so contributions were withheld from paychecks and will need to be refunded during the next payroll runs. I'm not concerned about the weekly people, but for our semi-monthly and monthly payroll people, is there anything I should be concerned about as far as holding on to the contributions and accruing interest for half a month or a month? EE's will squawk, but I just want to confirm.

Plan has 1 asset with an asset that does not have a readily determinable market value so must file the 5500 form, not 5500-SF.

It also has a Variable Annuity investment with an insurance company called Allianz.

Does this investment mean a Schedule A must be filed? I wasnt sure since as a Variable Annuity, none of the investments are itself with the general assets of the insurance company. On the other hand, the Schedule A instructions seem to require a Schdule A if it is an "account, policy, or contract with an insurance company".

Thanks for any opinions.

A frozen defined benefit plan covers 8 participants, 4 of whom are partners in the ownership of the company. The partners would like to terminate the plan. Although it is underfunded, they would like to make a contribution to make the plan whole. For tax deduction purposes, how would the contribution be allocated? In partner situations, is the allocation of the deduction done pro-rata based upon the funding targets? PVABs? I have heard that it is possible to do it another way using theoretical reserves. Does anyone have more information about this method?

I have to believe that a similar question has come up before, but if it has, I sure can't find it.

For 2011, the plan sponsor had a safe harbor nonelective contribution due. The sponsor also "declared" a profit sharing contribution. The 2011 and subsequent valuation reports were prepared on this basis.

Neither the safe harbor contribution nor the profit sharing contribution was ever made, although both were apparently deducted.

Since the safe harbor contribution was required, my understanding is that it must be accumulated with interest and deposited, using an EPCRS correction method. However, since the profit sharing contribution was NOT required, it seems to me that there is no making it up at this point, and that the correct action is to revise prior valuations to reflect that it was not made. Or, is the correct action to just make the contribution now and revise the tax return (which should be done anyway)?

Any thoughts? There are many positions I could talk myself into.

Thanks to anyone who replies!

Dog

Does anyone know if you can have a Wrap Section 125 Plan that also covers after tax benefits?