I'm certain this has an easy answer:

I have a client who changed their name and the plan name in 2013 (effective 01/01/2013).

EIN and all other data is the same (i.e. address, phone #, etc.)

Can I go ahead and use the new names on the 5558 extension, since the 5500 will indicate the name change when eventually filed?

I think it is ok because the filings are EIN driven, but then I got to "overthinking" and wasn't sure

Thank you in advance.

A plan was unfrozen in 2011 and benefits increased as a result. The plan covers only HCES. Per 404(o)(4), the increase in the liability must be ignored for 2 years from the later of the adoption or effective date. Assuming a calendar year, how does this timing affect in the 2013 year?

Back in the day, I had a file cabinet full of items that I had copied from pension periodicals, cases, rulings, etc. and then stuck into manila folders labeled by topic, then in alphabetic order in the file cabinets.

What are you using today as the electronic equivalent, for web pages, emails, PDF documents, etc.?

Evernote? OneNote? Another system?

There are many helpful posts to this forum regarding how to handle "very" late amenders (my situation goes back to 1998 and no documents can be located).

Suggestions have included a single VCP submission with the TRA, GUST and EGTRRA documents.

I'm wondering if anyone can report their success or any problems with such an approach.

I have a client who sponsors three idetical plans. All of the plans have not been amended for EGTRRA and the interim amendments. The plan is to restate all three plans and then merge them into a single plan. My question is whether I can merge them prior to the VCP filing and do a single filing or if i will need to submit on behalf of each plan. There is something in the instructions that says if you have multiple plans, such as a profit sharing plan and money purchase pension plan, you will need to submit separately for each plan, but it doesn't address plans that have been merged.

Thanks for any help.

Has IRS or DOL provided any guidance about VCP or VFCP corrections amid a service provider transition? We have an incoming client that has discovered some Qualification Errors in past years. Their independent auditor is recommended that they not move forward with the service provider transition until the errors are cleaned up through VCP filing.

Has anyone been involved in a transfer whilst an error is being corrected? What types of issues were encountered?

In general, our DB adoption agreements have the valuation date as the last day of the plan year, and our actuary runs the actuarial valuation as of the first day of the plan year. There seem to be some inconsistencies and I am trying to make sense of them. Assuming plan has calendar year:

1. A person is 40% vested on 01/01, and with an additional year of service is 60% vested on 12/31. Actuary shows him as 40% vested on his valuation reports but 60% vested on participant certificate.
2. A person was hired mid-year 2012 and enters plan 07/01/13. The actuary did not pick this participant up on valuation because he was not participant as of 01/01/13. That means he is not shown as accruing any benefit even though he meets requirements for accrual (participant with 1,000 hours).

We used to use the last day of the plan year as the valuation date, but moved it to the first primarily because we don't yet have year-end assets when determining contribution range for sponsor. I though the valuation date of 01/01 would be used simply for valuing the assets, not for determining benefits. How should these inconsistencies be dealt with?

An employee is requesting information on the COBRA implications of her entry into a partial dissolution of marriage (or "bifurcated divorce") under California Family Code s. 2337, pursuant to which I believe a ruling on dissolving the formal marital status is made ahead of resolving other (eg financial) issues:

http://www.leginfo.ca.gov/cgi-bin/displaycode?section=fam&group=02001-03000&file=2330-2348

Anyone have any experience as to whether a bifurcated divorce ruling would constitute a "divorce" or "legal separation" (both COBRA qualifying events under our plan)? Bonus points for Calfornia practitioners but any state would be helpful.

Note this is a separate question from whether the employee will remain financially responsible for providing health coverage pending total dissolution - the CA Family Code suggests that this could be addressed in the ruling, so the only question in my mind is whether the coverage (if any) should be provided as regular spousal coverage or through COBRA.

Thanks for any guidance!

We sponsor a corbel volume submitter plan and in the adoption agreement always name the Plan Sponsor as the Plan Administrator.

We received an RFP from a Plan where we are the current TPA and they are using their document. In the RFP they have named the person who handle their HR as the Plan Administrator.

If I was advising the HR person I would tell him that there is no way I would want any document saying that he is the Plan Administrator.

Am I being overly protective or overly sensitive? Any comments appreciated.

I have a potential client who's plan document is written as such that the cash benefit is accrued as of the last day of the year (12/31). I was under the impression it could not be accrued on the last day, but had to be before then. (I normally see accrued after 1000 hours, or accrued monthly).

Are you permited to accrue a benefit on the last day of the year for a defined benefit plan?

In the most recent model 402(f) notice published by the IRS in Notice 2009-68, the IRS took the position that if a participant elects a direct rollover of only a portion of an amount paid from a plan, with the rest paid to the participant, each payment has to include an allocable portion of taxable and nontaxable amounts. This interpretation created quite a stir, as it was different from what many practitioners were doing, and several groups asked the IRS to modify its interpretation on this point.

As best I can tell, the IRS has not addressed these concerns. Have I missed something? If not, have folks changed their rollover procedures to reflect the new IRS position, or are they still permitting participants to designate direct rollover of taxable portions only and/or distribution of nontaxable portions?

An IRA owner dies without a beneficiary but lives in a community property state. Don't the IRA proceeds go to his spouse (as if the spouse was listed as the beneficiary on the beneficiary form)? Thanks in advance!

A governmental 457(b) plan permits participant loans and unforeseeable emergency withdrawals. Must a participant take a loan from the 457(b) plan first before they can request an unforeseeable emergency withdrawal (assuming the loan does not cause a hardship).

Company A Company B

Owner A 99 % Owner A 69%

Owner B 1% Owner B 1%

Owner C 30%

Owner A and C are cousins. Owner A does not receive income or from Company B and Owner C does not receive income from Company A.

I believe it's controlled based on 50% identical ownership correct?

Wife notifies Plan of pending divorce.

Plan puts hold on account and notifies both parties they need QDRO to divide.

Participant separates service before QDRO is drafted and has under $5K vested and is eligible to cashed out under Plan provisions.

I assume because of the potential pending QDRO the Plan can't auto cash out. Is this assumption correct?

Also if parties decide cost of drafting DRO from divorce lawyers and cost to review DRO for QDRO status by Plan is too much given the small size of the account then the plan can release the hold and distribute the account only if spouse consents but that distribution could only be to participant and not alternate payee?

Is an insurance payment that identifies the family members covered "individually identifiable health information" as defined by HIPAA? I appreciate any thoughts!

For a nonprofit high school; should coaches and long term substitutes teachers be included in the participant count. They're eligible to contribute to the plan but few do. Coaches are contracted for the academic year; however they get paid half of their contract at the beginning of the season and then the rest when equipment is turned in. So if your a football coach (and not also a teacher), once the seasons done are you no longer a participant for the participant count? Long term sub's could be used weekly, monthly or some a few times a year.

Hi,

IRS Revenue Ruling 2006-43 does not permit a participating employee, from and after the date of the “pick-up”, to have a cash or deferred election right with respect to designated employee contributions. Participating employees must not be permitted to opt out of the “pick-up”, or to receive the contributed amounts directly instead of having them paid by the employing unit to the plan.

A collectively bargaining agreement originally said that 3% will be picked up from union employees pay. After several years went by a new collectively bargained agreement raised this to 5% for existing and new employees. Athough participants can't change or opt out of the pick-up contributions can a collectively bargaining agreement or employment contract renewal raise it for existing employees who are having pick-up contributions taken out of pay? My gut tells me no, but I can't find a cite or ruling where the IRS specifies they can't.

Thanks

a 3 member controlled group operates under a 401(k) plan that provides uniform benefits and provisions to all 3. One member brought up the suggestion of having their own plan due to the fact they had a Standard Industrial Classification (SIC) code. I have never heard this.

This is a takeover New-Comp Plan. We looked back at the 2012 and 2013 years and while the client made a gateway contribution, in each year, the rate-group test prepared by Relius showed a required contribution of around 9% of nHCE pay in each year. The CPA says that is OK because the pass the 410(b) Ratio Percentage test.My response was that the Plan is cross tested,hence it must pass BOTH the rate group tests and the average benefits test...he adamantly states "No way". I'd like a second opinion.

Here's some background and a few questions.

The Plan defines 2 Classifications [Rate groups] –Principals and all others. The Plan Document states the allocation method for non-elective contributions uses the “Participant Group Allocation Method”.

There are 2 principals and 6 nHCEs, one of whom was hired 5/1/2013. The Plan permits deferrals for employees with 6 months of service[entry date is monthly]. A Safe Harbor NE contribution is required for all employees meeting that same requirement. Class based Non elective contributions are also allocated to the same employees.

Each year the maximum 415 contribution is calculated for the Principal with the lowest compensation. That percentage is then applied to both Principals’ compensation. If a Principal with higher compensation receives a prospective allocation greater than the 415 limit, such Principal’s allocated contribution is capped at the 415 limit.

A gateway contribution is then calculated for the nHCEs equal to the lesser of 5% of compensation or 1/3 the highest Principal’s allocation percentage.

The Plan is a Non-elective Safe Harbor Plan so the 5% gateway is satisfied through the combination of 3% Safe Harbor + a 2% Non-elective contribution.

The Plan is then subjected to Rate-group testing under 401(a)(4).

Question 1

Must this Plan be tested under IRC 401(a)(4), The General Nondiscrimination Test?

If so, must the General Nondiscrimination Test include “Rate Group testing”?

Question 2

Are there any options available to pass general non-discrimination not using rate group testing?

Question 3

What does it mean for an otherwise excludable employee to be “separately tested”? If the Plan required only 6 months of svc for a Safe Harbor Non-elective, would that same Otherwise Excludable Employee be entitled to a gateway contribution?

Question 4

Is a Gateway contribution required for employees that have been employed less than one year/age 21 when the Plan requires a Safe Harbor Contribution for such employee? May those less than one year/age 21 employees be excluded from the 401(a)(4) General Test?

Question 5

The General test shows that approximately 9% of payroll must be contributed for nHCEs in order to pass the rate group test. The employer , in 2013 and 2012 contributed less than the required 9%. The 2013 tax return has been filed. Can one make self corrective contributions for employees in 2014 to correct that error or must some other correction procedure be used.