A client is worried about the economy and would like to put a few hundred thousand dollars of his Profit sharing into precious metals? Can anyone tell me if this can be done legally? and who does it well?

A terminated participant is on disability and TnCare, neither of which she can afford to lose. She wants to know if the Pension Plan allows for the money to be rolled into a Trust (her son who is over 21 would be the Trustee.) If so, is there a tax liability at the end of the year or is there no tax as long as the money stays in the Trust. Of course, in the future when/if money is taken out she knows there would be tax.

My thoughts are the funds could be put into the trust, yet they would be taxable in doing so? Would this be the best option for her? I'm thinking she should just leave the money in the plan or roll it over.

due to the issues last year whereby the 5558 was filed in July and then the 5500 form in early August:

Some Sponsors received letters that the 5500 was late because of the timing of the IRS providing the 5558 information to the EBSA.

what are others doing this year? Are you holding off on the 5500 filing and if so, until when?

I know the issue is easily addressed with the proof of the 5558 filing date, but trying to avoid having the issue to begin with.

any thoughts appreciated.

Employer sponsored voluntary executive access to Institutionally-priced Life Insurance (ILI, COLI, SALI) serving as a 409A complement or supplemental Roth is gaining in popularity. Access is typically restricted to same "select group" as nonqualified deferred comp / 409A plans, or more restricted.

Most institutional COLI issuers now allow their policies sold in this manner, a multi-life after-tax employee funded alternative to pre-tax nonqualified deferred comp funding, but don't provide employer overviews of how to do this on an ERISA compliant manner like they do when buying COLI to informally fund 409A plan.

I'm looking for a reference piece on how discriminatory an employer can be sponsoring a voluntary life insurance benefit and the required documentation.

Also ... some have expressed ERISA concerns since these plans / policies are designed for (1) retirement cash / fund management with (2) supplemental protection as opposed to traditional retail / group voluntary life insurance plans designed for (1) protection with (2) supplemental cash accumulation opportunities.

Would appreciate any opinions on employer regulatory / ERISA exposures sponsoring a voluntary life insurance plan to fund retirement.

Should car allowances be included in the definition of compensation?

The doc only says that a bonus and items included in Treasury reg. 1.414(s) 1©(3) should be excluded.

I could not really find a car allowance definition.

Would it be based on whether or not the car allowances is included in W-2 income?

Thanks!

Participant deferrals were withheld from a participant's paychecks (7/15/13 and 7/31/13) before the plan adoption date (8/15/13). The deferrals were never deposited into the plan, and (but) were not included in taxable wages on 2013 Form W-2. How to correct this? Possible options:

1) Correct the 2013 payroll information (W-2, quarterly, etc.) and reissue check. Of course, this would also involve the participant amending their 2013 Form 1040.

2) Deposit the two July 2013 deferrals into the plan, then distribute out of the plan with a Form 1099R. (If this is done, does the plan sponsor pay excise taxes on the late deferals?).

3) ????? (Never had this happen before, so I'm completely uncertain.)

Dave participates in a 401(k) Plan and is unmarried at all relevant times. He dies on 8/1/2014 with an account balance of $X and without designating a beneficiary. Under the Plan terms in effect when he died, his account balance is paid to his estate. Under the relevant state law, his account balance became a probate estate asset on his date of death. He has no will. Under the relevant state intestate succession rules, Gloria stands to get his entire account balance. If the Plan is amended now to change the default beneficiary from "his estate" to someone else so that Gloria does not get any of it, does Gloria have any legitimate cause of action against the Plan? Also, is such a post-death amendment likely to be challenged by the executor of Dave's estate since it would change a probate estate asset to a non-probate estate asset after Dave's death. Very confusing--please help. Thanks!

Code Section 409(e)(5) provides that the pass-through voting on the specified matters in Code Section 409(e)(3) for non-registration type securities will be met if the plan permits each participant one vote with regard to such issue. I am concentration on the language "will be met." Is "one-person, one- vote" an absolute requirement, or can the plan permit voting based on total shares held by each participant? Is there any authority for an alternative method of voting?

Relevant Background Information:

401(k); Safe Harbor Non-Elective; additional non-SH match.

Age 21 & 1 year of service with dual entry on 1/1 & 7/1.

Adoption agreement specifies that participants must complete 1 year of service to receive the match.

Further, it defines 1 year of service as 1,000 hours.

Match formula = 50% on the first 3% of comp deferred (max 1.5%)

Questions:

2-part question whether ACP testing is required on non-SH match or not...

IRC 401(m)(11) indicates no testing IF...

- the additional match is not based on deferral exceeding 6% of comp (okay);

- Ma formula cannot escalate (okay);

- % cannot be greater to HCEs than NHCEs (checkmark);

- Ma cannot exceed 4% (okay); and

- the additional match cannot impose an hour and/or last day requirement to

receive.

That last point regarding hours is where we need clarification.

Adoption agreement specifies that participants must complete 1 year of

service to receive the match. Does not specifiy hours in that section.

But, the agreement defines 1 year of service as 1,000 hours elsewhere. I

could see the last point causing a need to ACP test. Here are my questions...

(1) Would we need to ACP test?

It just so happens that all participants who deferred worked

more than 1,000 hrs anyway. Anyone with less than 1,000 hours didn't defer

to receive a match. Therefore, no one was excluded from receiving match

due to hours.

(2) If question 1 is yes, then due to additional facts and

circumstances would that be enough to avoid ACP testing for the plan year?

Is it possible to have a tiered Safe Harbor Non-Elective Contribution based upon years of service. Client is proposing a 3% SHNEC for all employees, which would increase to 5% after 5 years of service. If the additional 2% was a Discretionary contribution after 5 years of service (a possible group allocation) what additional tested would be needed?

US citizen moving to UK. Will keep US citizenship. Will have Sch C type income in UK, subject to US income tax.

Can she have a qualified plan in the US for that income?

I'm a TPA with a one participant DB plan. The participant is the plan sponsor, trustee, and participant.

He is asking me if he could take part of his plan assets and purchase a property he owns as an individual.

On it's face it sounds like a prohibited transaction.

Can this be done?

We have a new client that currently has an owner only plan with a large vendor. He is the only participant. He uses the vendor's document. He is getting ready to hire an employee, so he retained us as his TPA. My initial thought is that I would restate the current plan onto our prototype. However, the vendor is taking the position that he has a brand new plan, and they are setting up a new account. I told the client that he should move money from the existing account into the new account and we will continue on with the same plan. But now I am second guessing myself. Can a plan transition from being a nonERISA owner only plan to an ERISA plan and be the same plan?

Just wondering about a couple aspects of this bill:

1. Apparently, plan sponsors and their actuaries are going to have to consider what to do about 2013 plan years. It will be possible to defer recognition to 2014 and let the existing 2013 valuations stand or (especially if there are good reasons) revise the 2013 valuation once all of the various rates etc. have been promulgated. Such revisions could possibly eliminate anticipated funding deficiencies or retroactively negate missed quarterly contributions, although the percentage impact on 2013 Funding Targets is fairly small. Many plans will not derive a sufficient benefit from HR 5021 for the 2013 plan year (especially if the minimum required contribution as originally calculated has been met) to make revising the 2013 valuation worth while.

2. Apparently, any valuations already issued for 2014 will have to be revised. One can only presume now that the IRS will find a way to keep that from causing any qualification issues (i.e., plans that have been operating as limited under Section 436 of the code will be able to stop operating as limited, with no consequences for having administered the plan by not permitting full lump sums). It was a bit easier when MAP-21 was enacted in mid-2012 because the sponsor could avoid some awkwardness by electing to defer recognition of MAP-21 for funding and/or benefit limitations to 2013. This law does not seem to permit any such flexibility for the current plan year (whether intentionally or not).

3. The law appears to provide that the newly increased discount rates cannot be used to permit plans sponsored by companies in bankruptcy to pay accelerated benefits (that is, the certification of an AFTAP of 100% or more for that purpose cannot take the boosted segment rates under HR 5021 into account), although it appears that the HR 5021 rates can be used for that purpose during the 2014 plan year. Do people agree? Is it agreed that the MAP-21 rates can continue to be used to exempt plans sponsored by companies in bankruptcy from the limitations even after the 2014 plan year?

4. Contributions for many 2013 plan years will have to have been paid as early as mid-September, and 5500s, even with extensions, will have to be filed as early as mid-October. Do you think the IRS will issue sufficient guidance in time or should people be handling HR 5021 on a reasonable basis and hoping for the best?

What do people think about these things?

FACTS: ESOP plan effective 01/01/2012, Cycle D (submission period ending 01/31/2015). This plan is not a "true" ESOP. It has no loans and no shares contributed. The Employer made a cash contribution in 2012 with the intention of buying stock, but never ended up doing so. The only accounts in the plan are cash accounts (profit sharing). The Employer was talked into this plan by their prior TPA and has since terminated their services and has hired us to takeover and terminate this ESOP. In addition, the client has a 401k plan that is effective 11/01/1984 that we are also taking over and this plan will be continuing. The Employer wishes to terminate the ESOP effective 08/01/2014.

Concern: I'm concerned that the ESOP document is not updated according to the current cumulative list (2013) since the plan is effective 01/01/2012 (adopted in December 2012). In addition, I do not believe the plan was submitted for Determination Letter off-cycle (new plan exemption). So no DL has ever been issued. My concern is what if the plan were to be audited?

Question: Rather than restating to another ESOP document for Cycle D, can we restate the plan to a "profit sharing" plan on a pre-approved PPA Document effective 01/01/2014 and then terminate the plan effective 08/14/2014?

Or should I not worry about restating the plan and just do a board resolution to terminate it and be done with it?

Any suggestions or thoughts are appreciated. We do not provide document services for ESOP so I am way out of comfort zone here.

Thank you!

Is an Early Retirement Date a protected benefit or can it be deleted without any concern?

Does it matter if the ERD is effectively "meaningless" in that it requires 6 years of service (full vesting) and doesn't provide any distribution option not otherwise avaialble in the absence of the ERD?

What date should be used as effective date of PPA restatements?

Plan allows participants to take a hardship and the participant's deferrals are suspended for 6 months.

At the end of the six months, doesn't the employer begin the salary deferral withholding at the amount it was prior to the suspension?

The hardship form does not indicate the participant will be required to complete a new election form at the end of the suspension.

The employer makes the participant wait until the next entry date following the 6 month suspension and tells the employee to complete a new election form.

If deferrals show resume at the end of the 6 months, is there an issue missed deferrals?

Thanks

A client is past retirement age, under age 70 1/2 and still working. He's the only employee and participant in his profit-sharing plan. He's dithering about whether to make a contribution or use the money "to cut some trees".

I was thinking, why not make a contribution and get the deduction (he has the cash and a tax liability), then take an in-service distribution? The plan allows in-service after reaching retirement age.

Have a small 401(k) plan that will fail 401(a)4 test.

They can pass by providing a profit sharing contribution of 7% of salary to an employee who terminated employment during the year. The plan does have a last day requirement.

This employee would not be vested. Can the 11g amendment make the participant vested.

The ERISA Outline book points to an example of where this was done and not challenged by IRS.