can a spouse of the shareholder of a PA who performs services for the PA but does not get paid be considered a common law employee?

Does anyone know if you establish suspension rules/conditions, after allowing hardship distributions, in a 403(b) plan with mandatory employee contributions if you can allow suspension of the employer matching contributions ONLY - but not suspend the employee contributions? Is this possible? In this case assume that hardship distributions are allowed from only the employee mandatory or could also be allowed from both the employee mandatory and employer matching.

I also assume the suspension of either elective deferrals or employee contributions (voluntary/mandatory) in a 403(b) plan follows the 401(k) regs./rules for the same issue and that during the 6 month hardship period - suspension is based on the safe harbor hardship rules being in play, correct??

When is the suspension rule not in play during operation/administration of a 403(b) plan?

Employer sponsors a SIMPLE IRA that allows employees to participate if they had $5000 during the preceding year and are expected to earn $5000 during the current year.

Employer wants to amend the plan to provide that any employees hired on or after 01/01/2015 will be eligible to participate in the plan if they had $5000 during any 2 preceding years and the same expectation of $5000 during the current year. The amendment will be effective 01/01/2015 so there is no mid-year amendment issue. The empoyer thinks they will hire a bunch of new employees and want to have them wait longer before becoming eligible.

Is there a problem with this amedment?

Thank you for any input.

Does anyone have a good spreadsheet for self employment income calc? Can you tell me where you got it or share it?

Thanks in advance.

Does provision regarding early retirement in a profit sharing plan subsume an otherwise regular termination of employment for purposes of allocation conditions? Participant quits job mid-year and goes to work for another employer and participant happens to satisfy the age/service provisions for "early retirement" under the PSP. PSP is a calendar year end plan and has a last day of the plan year employment requirement, however, it waives such requirement for death, disability and retirement (early, normal and late). Based on the facts, it appears that participant terminated employment but did not "retire" and thus would not be entitled to an allocation of the PSP contribution. Any thoughts? Thanks.

Are there any federal rules on timely deposits that would apply to pick-up contributions? Would it make a difference if the pick up contributions were made directly by the employer or by withholding them from the employees' pay?

I have a company that does a monthly match. After the quarter they noticed that a couple people did not receive their full match and they deposited the additional funds. Is there any requirement for calculating lost earning b/c typically the match would have been made monthly if not for the payroll error?

If/When do you have to give out the Loan Program?

With the SPD?

When someone requests a loan?

When someone requests the Program?

A big business will acquire a smaller business (this summer or autumn). Big intends to merge Smaller's safe-harbor 401(k) plan into Big's (non-safe-harbor) 401(k) plan.

(Assume both businesses have a calendar year for accounting and tax. Assume both plans have a calendar plan year.)

If the merger of plans happens before December 31, 2014, would that defeat the Smaller plan's safe-harbor treatment?

If to avoid such a concern (or for other reasons) one suggests that the merger of retirement plans wait for year-turn, does it matter whether the merger is effective as of December 31, 2014 or January 1, 2015?

Which of those do you like better? What are your reasons for why you prefer it?

Don't think I've ever seen this come up.

The K-1 shows different percentages in Part II, Box J - one percentage for profit and loss, and 1 percentage for capital. Trying to determine which to use!

1.404(e)1A(f)(1) refers you to IRC 702(a)(8) and 704. And 704 basically refers you to the partnership agreement.

Logically, to me at least, one would use the profit percentage on the Schedule K, rather than the capital percentage. Any thoughts on this?

yesterday's CPI was released.

based on the 3 month average we now have

catch up 6014.50

deferrals 18044

compensation 266,440

415 53,288

so looks like things will increase. of course our friends in the government could always try and run through a cap, but it is getting late in the year...

Elective deferrals were made in the six month period following a hardship distribution. Where elective deferrals need to be returned to the participant by way of refund to the plan sponsor to go through payroll, how are the earnings of the disbursement reported and taxed to the participant? Thanks.

Ok, so I'm crying uncle in trying to find the correct way to do this. Any ESOP Experts out there???? Please chime in.

Cash Dividends were used to pay down a leveraged loan. The split between the two are approx 6% allocated and 94% unallocated. Using round numbers, the Employer made a $100,000 dividend payment. So naturally $6,000 would be for the allocated shares and $94,000 for the unallocated shares. Shewwww I can do math!

So doing the FMV calculation, we find that the shares value based on the day before the loan payment is greater than the FMV on the date the dividends were declared. So no adjustments necessary. Shewwww again!

So we move on to the share release. The loan payments paid with cash and unallocated dividends are released on proata compensation (according to the document). Easy Peasy....Shewww!

The allocated dividend shares are to be released on prorata shares. OHHH crap. So my question is this.....

Is the actual transaction a contribution or is it a dividend or just a transfer in? No where (that I can find) tells you exactly how the transaction should be structured from a recordkeeping endeavor. HELP!!!!

Plan has "Fixed" Contribution equal to 5.7% of compensation and 5.7% of excess Compensation - 100% vested

Plan Also has "Match" Contribution equal to 100% of elective contribution up to 5% of compensation - 2/20 Vesting

Plan Also has "Minimum" Contribution equal to 3% of compensation minus the fixed contribution for the year. If fixed exceeds 3%, then no minimum made

- 100% vested

Plan uses Prior Year Testing

Plan Document does not speak to a designated QNEC for correction of a failed ADP test

Question:

Should the plan fail the ADP test, can the Minimum contribution be re-characterized as a QNEC to pass the ADP test?

I have a document (not our design) that has some language I'm not used to seeing. The plan does not provide for PS contributions. The plan is TH and provides that any TH minimum contribution will be a QNEC. There is one HCE who is NOT a Key EE, so he is getting this QNEC. Is this QNEC required to be used the ADP test to determine his ADR? The plan already fails ADP, so adding this QNEC to this HCE will make things much worse.

Suppose "normal" plan entry date would occur on July 1. On June 21st, employee goes out on approved maternity leave, or short term disability. Returns to work July 15th. Is the entry date July 1st, or July 15th? Plan doesn't really address this - refers to if the individual is "employed" - so are they "employed" if they are on approved leave? Or are they considered "re-employed" when they return from leave?

My inclination is that they would enter the plan on July 15th.

If a plan fails both the ADP and ACP tests for their 2013 plan year and they are going to us the bottoms up QNEC method, can they give the lowest paid NHCE 5% to pass the ADP and then 5% to pass the ACP. The disproportionate rules apply to each test, correct?

Thanks for any insight!!!

I am currently considering a 401K loan. I'm not sure if it's a good idea. I've read mixed reviews.

I am paying a student loan of $18,000 at 8.5% interest. I have other loans as well, but they are at a more reasonable interest rate.

I can take a 401K loan out at 4.5% and use that money to pay off my student loan. It seems like I would be saving money each month by paying 4.5% interest instead of 8.5%, right? And I'd be paying the interest to myself, instead of my lender, correct? (Minus the $10 fee to my 401K company). I realize there's an opportunity cost to taking money out of my 401K, but I've heard other people say that they actually grew their 401K by doing this.

Any thoughts?

Form 5500 asks for participant counts as of the 'beginning of the plan year'.

I have seen two practices in how to report this as follows:

1. Bring forward end of year count from prior year 5500.

2. Actually calculate current participant count at the first day of the plan year, including new entries.

Which is really the more common practice?

Can 403b "orphan" plans in a merger of an organization only be rolled over into another 403b (participants cannot rollover funds into an IRA) and that the prior plan must be terminated to roll funds over to the new IRA.

JEK