An individual is a less than 5% owner when he turned 70 ½. As such, under the terms of the plan the participant does not have to commence required minimum distributions. The regulations under 1.401(a)(9)-2 provides that for purposes of Section 401(a)(9), a 5% owner is an employee who is a 5% owner (as defined in Section 416) with respect to the plan year ending in the calendar year in which the employee attains 70 ½. The individual continues to work for the Company and has not taken any distributions. Due to a reorganization of the Company stock, he becomes a 5% owner at age 74. The question is, since he was not a 5% percent owner when he turned 70.5 is he still exempt from taking required minimum distributions now at age 74 while he continues to work or must he commence taking minimum distributions.

Form 5310, Line 21 requires a statement of net assets to pay benefits "as of the proposed date of plan termination or latest valuation date."

Does "latest valuation date" mean the latest valuation date that was performed, or does it mean latest date that will be performed? For example, could the Plan's last Form 5500 valuation by the latest valuation date, since it was the latest valuation date as of the filing? The Form 5310 Instructions do not provide clarification.

Thanks for any help.

On the Notice to Interested Parties, if the last date for comments to the IRS falls on a weekend or holiday, what date is the actual due date for the comments? Please also provide a source for that information.

If the correct answer is that the due date is the next business day, does it suffice to display the weekend or holiday date as the due date on the Notice, and then put a sentence at the end of that paragraph to the effect “If any of the due dates for receiving comments falls on a Saturday, Sunday or legal holiday, comments shall be considered timely if they are received on the next business day”?

Thanks.

Other than qualified replacement plan to reduce reversion penalty are there other creative techniques to reduce/eliminate reversion for a terminating 1 man plan?

I've heard mention of a technique to purchase and distribute a J&S annuity which soaks up more assets than a lump sum cash distribution?

Thanks

I have a client with an NQDC plan funded by an irrevocable Rabbi Trust. The sponsor did not draft the trust to include reversion of excess funds back to sponsor. Can they amend the plan to add the clause?

Can a small business owner offer both a SIMPLE IRA ad a SEP IRA to his employees?

Can the business contribute the maximum amount o each plan?

Has anyone had one of their health fund clients do a HIPPA self-audit?

The attorney for one of my clients is recommending they retain a firm to perform a HIPPA audit. The idea is to do self audit in order to minimize fines/penalties if the IRS/DOL came in for a real audit. This is a self funded fund with around a $5 million in assets and 300 members.

It all sound reasonable except the only people they have found who will do the audits are the big national firms and they want $50K to do the audit.

It all seems like overkill to me, but I am in no position to question the attorney.

Has anyone else gone through the process? Are there cheaper alternatives? Are these worthwhile for a fund this size?

Two Questions :

(1) Can a small employer , assume a C-corp , have a fiscal year = tax year = plan year for a new SEP run from 9/1/2014 to 8/31/2015 ?

(2) If the answer to (1) is "yes" , are employees who terminated prior to 9/1/2014 entitled to a contribution ?

I have a basic question. I am setting up a 401k plan for a nonprofit company. The president of the company makes approx. $80k a year. Would he be considered an HCE?

Target's 401(k) Plan (allows Roth) plan is terminated in connection with corporate merger. Successor plan rules mandate target plan's Roth deferrals must be transferred to the acquirer's 401(k) Plan (does not allow Roth).

402A regs define "designated Roth account" as a separate account... to which designated Roth contributions are permitted to be made in lieu of elective contributions, which obviously applies in the general direct rollover context. That said, if the acquirer does not want to permit Roth, would this prevent a direct plan-to-plan transfer of Roth deferrals otherwise required under the successor plan rules? Hope is to simply set up separately accounted Roth bucket which will be distributable from the acquirer's plan at the same time/manner as pre-tax deferrals. Thoughts? Any guidance I'm missing?

Thanks in advance.

Plan participant (HCE) is transferred from one geographic location to another. A large bonus is paid to the participant as part of the relocation. The payroll company fails to withhold the appropriate health insurance premiums, additional Federal tax withholding and 10% salary deferrals that the participant has requested for the one pay period that includes the large bonus. The client would like to make up all of these missing amounts from the next pay period. Assuming the participant agrees, is that an appropriate fix for the missed deferrals, or must they make a QNEC?

Just wondering - say a C-corp with a fiscal year, and an existing leveraged ESOP, decides to switch to S-corp status and change their fiscal year to calendar year.

Pros and cons of changing ESOP plan year to match the new fiscal year and running a short plan year? Any special problems (or advantages) that you've seen one way or the other?

Maybe this goes on the Form 5500 forum, but I've posted it here nonetheless:

We electronically filed our 2013 Form 5500 on time without an extension being applied for. The due date was 7/31.

Unfortunately, I sat on the manually-filed Form 8955-SSA and here I am almost a week late. Or am I?

What's the proper way to handle?

1. Send it in as is and hope for the best?

2. Check the "Form 5558" box and hope they don't care?

3. Check the "Automatic extension" box and hope it applies to us? (Given that there is a "Special extension" box, what ever is an automatic extension anyhow?)

4. Other?

Help. I have run into a problem that I have never had before.

I have a plan that improperly excluded employees from the plan. We are needing to make corrective contributions. I know that, typically, you use 1/2 of the ADP for th class the employee would have been in. However, we have 2 issues:

1) There are years in which there were no 401k contributions made (it's a very small plan). Given that there is a 0% ADP for those years, what do you do?

2) There are employees whose class has no deferrals (i.e., there are no NHCE deferrals for a given year). We could use the HCE ADP in these cases. Is there any other way to handle this?

Thank you! Hopefully one of you guys/ladies has run into this one before.

Would welcome any thoughts on the following scenario:

Sponsor of small profit Sharing plan adopted resolutions 4 months ago terminating the plan and directing that all plan accounts be distributed.

Key employee of plan sponsor died about 2 months ago while still working with recordkeeper to pull together notice and distribution elections to plan participants so the recordkeeper could process distributions per the plan's termination. Recordkeeper is now sending out the distribution notices / elections and working to distribute all assets and wind up the trust. The deceased participant had a valid beneficiary designation form for the plan on file at the time of his death naming his daughter as the sole beneficiary.

Can the recordkeeper just work directly with the daughter as designated beneficiary on distribution of the deceased participant's account without any need to involve the deceased participant's estate. In other words, we are assuming the adoption of resolutions terminating the plan prior to the participant's death and the plan's pending distribution of assets did not vest any right to a distribution of the account in the deceased participant's estate and that distribution of the decedent's account should simply be governed by the decedent's beneficiary designation (even though distribution of the decedent's account was pending due to plan terminationat the time of death).

We recently viewed a webcast regarding Participant Fee Disclosures and it indicated that plan sponsors could deliver the 404(a)(5) Notice by electronic delivery "under the DOL rules".

We looked at the DOL rules, and it was pretty extensive. We previously understood that the notice had to either be hand delivered or mailed.

To satisfy both IRS and DOL rules, is electronic delivery of this notice allowed?

Hi. I have a participant who terminated in 2013 and received an immediate distribution. Which is great... except that the plan says that the distribution determination date is the end of the plan year, paid as soon as administratively feasible after that.

It looks like EPCRS says that the correction method (presuming the participant won't return the money) is that the employer has to make a deposit for the distributed amount to make the plan whole (which is a whole 'nother topic, since this is a participant-directed account plan and it didn't affect anyone else in the plan) and then use it for their next employer contribution. But this is a deferral-only 401(k) plan - there are no active employer contribution sources.

So my questions are:

(1) Is there some kind of reasonable way around this? The participant was paid out exactly what she was due.

(2) If the sponsor has to deposit $2K to make up for the early payment that they authorized, can they use that to fund deferral deposits?

Thanks.

If a plan adds a self-directed brokerage account feature, can it be offered to only certain classes of employees or does it need to be available to all participants in the plan? The plan wants to add it so their management employees can use it, but is afraid to make it available to lower-level employees who have less investment experience.

Participant requests hardship. Check is issued, participant dies 3 weeks later. Mail was slow or something & the check was received on the date of death and not cashed.

Does that check get returned to the account or can it be reissued to his estate using a constructive receipt argument? The beneys under his estate are likely different than those under the 401(k) so this is a nightmare situation for the plan sponsor.

Thanks in advance for any guidance.