I'm helping a very small charity with an underfunded db plan. They can't afford to make their final contribution for 2013 (due 9/15). As far as I can see, the user fee for a waiver request is $14,500--which is more than the contribution. In other words, they can't afford the user fee.

Is there any ability to request a hardship waiver of the fee? I'm also thinking it may be too late to request a funding waiver for the 2013 contribution....True?

Thanks for any help.

Distribution from a NQDC plan for active employee. The document states that an employee can take a distribution from the plan upon emergency if approved by the employer's committee.

How are distributions taxed from a NQDC plan?

Do we withhold 20%? I know that there's no 10% withholding even if under 59 1/2.

There's some places that state it's done via W-2 if the person is an employee? Not 1099.

What if they are terminated is it true that we have to report it on the

1099 Misc. (Is there 20% wh though?)

If a 403(b) plan allows for a matching and non elective contribution, I understand these contributions will make the 403(b) plan an ERISA plan subject to all the rules of compliance testing and form 5500.

Question, doesn't the plan document need to name a Trustee for the employer portion of the contribution? I am reviewing a document prepared by TransAmercia - Tax Deferred Annuity Retirement Plan Adoption Agreement, and it contains employers contributions.

Thanks

We (TPA) have taken over a DB plan for 2013. It turns out that the 2012 contribution was funded late, and the 2012 Schedule SB reflects a funding deficiency. However, the sponsor never paid the excise tax.

They are now asking whether there is any particular advantage to coming forward and paying the tax at this time, vs. waiting until the IRS asks about it. Can anyone think of anything? Keep in mind that the funding deficiency goes away in 2013.

Dog

Would costs related to Continuing Education count for hardship distributions? For whatever reason the employer is not paying for the training, probably she is a per diem employee or something.

Let's suppose you have a company that was acquired in July 2013. In July 2014, the plans actually merge together and now you have 1 plan. (A is the surviving plan- Plan B merged in on 7/1)

Testing:

For Coverage, you would perform it as/of the end of the plan year.

For ADP/ACP, you have the option of testing each one separately from 1/1-6/30/14 then together for 7/1-12/31.(option1) You can test plan B from 1/1-6/30 separately, Plan A's test runs from 1/1-12/31 but only includes Plan B from 7/1. (option 2) Or, you can test them together from 1/1-12/31/14. (option 3)

Let's just say you go with option 3:

From 1/1-6/30, participants in plan b received a match of 50% up to 4%. Then effective 7/1, they moved to Plan A's match of 100% to 5%. Would BRF testing be required? I believe yes. What happens if plan B does/would not pass BRF (high concentration of HCEs & very few NHCEs)?

Now let's say they have other provisions that were different between the 2 plans, but as of 7/1 they all will follow Plan A's provisions-they were all more generous. Would other features need testing as well? Vesting, Distributions options, after-tax availability, etc. What if Plan A did not have a match at all during...what testing would be requried?

Any help would be greatly appreciated!

We have a situation where a client's recordkeeper is offering to backdate a fee reduction for them as of march 1st; however, in that case they obviously wouldn't be able to get a fee disclosure out to participants 30 days prior. I'm thinking that because it's a reduction in fees that will benefit participants, they can send just send the disclosure asap without getting in trouble. Any thoughts?

Imagine that your client is an individual who is a vested participant in a multiemployer defined-benefit pension plan. He is entitled to a pension, which the plan estimates as $1,958 per month, beginning at his age 65. But he also is entitled to claim his pension as early as age 55, with a plan-specified early-retirement reduction. He is 56 now. His employer is no longer a participating employer, and does not maintain any retirement plan.

Although the individual does not need the pension money now, he is considering claiming his (reduced) pension now. Why? He believes the plan will become insolvent. He has seen his employer and several others withdraw from the plan; much of the industry's business goes to non-US providers; most of the US business does not require union labor. We have read the pension plan's Form 5500 reports for the past few years. The plan, although not reported as "critical", has not obtained (even with PPA surcharges) the contributions needed to fund the plan. Asking for contribution rate increases when a collective-bargaining agreement expires has resulted in yet more participating employers withdrawing from the plan.

What professional methods should one use to help this individual evaluate his choices?

I consider the early-retirement reduction of the pension as a kind of "premium" that buys some insurance against the risk that the individual's pension would be cut (or eliminated) in the plan's insolvency. Is this a logical way to think about it?

If one assumes that the plan becomes insolvent before the individual turns 65, how does one estimate how deeply his normal pension would be cut?

What other risks and trade-offs should a professional consider?

I am newly involved with a CB/DC combo plan that has the following problem: The 2011 and 2012 PS contributions required to pass nondiscrimination testing were not deposited until December 2013. I am wondering about compliance / disqualification, deductibility, etc. This was an issue of communication/disorganization rather than financial issues. The plan sponsor is getting back on track and for 2013 all CB and PS contributions for 2013 will be depsoited timely - in an amount that is just slightly less than the 404(a)(7) limit for 2013.

I have limited experience with this sort of problem but it seems like this is an issue for VCP since plan contributions were not made in a timely manner. In addition, I would think that investment gains may have to be restored. Since the contributions were not made in a timely manner I'm not sure that a tax deduction is available even with a VCP submission(?). If that's the case is there an excise tax on nondeductible contributions? The contributions made in December 2013 was only the amount necessary to pass nondiscrimination testing for 2011 and 2012, does that change the the excise tax situation?

For now, I just want to advise the plan sponsor that they have some issues we have to follow up on, without being too specific or too open-ended. Any input would be appreciated.

Participant still working. Not a 5% owner. Turns 701/2 in December. No current required beginning date for 401(k) because still working.

He has 2 IRA's. If plan allows, can he roll them into the 401(k) and delay the required beginning date for them?

Is there a trend towards offering some sort of Compliance Guarantee or other way of guaranteeing our work as tpa's? Does such a marketing approach have substance to it, considering the commitment reflected in our credentials?

A small business has a Simple plan (not sure if it is IRA or 401-k) and wants to start a traditional 401-k (safe harbor). Can this be done any time in the calendar year and do participants have to wait a certain time period before rolling the simple into the new plan? Any guidance on notifications/issues would be appreciated.

Am I allowed to use component plan testing to pass the ADP/ACP Test same as for Cross-Testing?

Calendar Year Plan

2012 MRC = $0

5500 on extension

Plan sponsor contributes $50,000 on August 1, 2013. SB filed August 15, 2013 reporting the $50,000 contribution. Plan sponsor contributes additional $75,000 on September 1, 2013 but fails to communicate to EA until 2014. Plan sponsor deducts $125,000 for 2012

For $75,000 to be deductible for 2012, the IRS informal position is it must be claimed on the 2012 and not 2013 SB.

Is it acceptable to amend 2012 SB as of this late date in 2014?

If not, how would this situation be corrected? Claim the contribution on the 2013 SB and ignore the destructibility issue since the IRS has only informally stated their position of not being able to deduct a contribution for a tax year than precedes the Plan Year for which the contribution is claimed?

Client has 4 employees plus himself as the owner. All employees were hired in 2014. The owner started the business 6 years ago.

Can he establish a safe harbor 401k for the employees and continue to contribute the max to the SEP ($52,000) without including any of his employees until

2017 (2014, 2015, 2016 for service = 2017 eligibility in the SEP)? The document does use the "3 of 5 rule."

I know that we can no longer use the 5305 and I also know that I need to be concerned with top-heavy (hence the safe harbor status of the plan).

I know about 415 aggregation, etc., but I cannot find anything on this, which is surprising because I would think this is a pretty obvious plan design choice in the right circumstances.,

Participant withdrew $18,000 from individual account in profit sharing plan in November 2012. The participant started making loan repayments in January 2013 however the participant did not sign the loan documents until February 2013. Can this still be considered a loan or is a taxable distribution? If it's a taxable distribution, what do I do about the repayments that have been made to date?

Prospective client has a current NON-ERISA 403b plan. He wants to establish a 401(k) plan. Current non-ERISA 403b plan has loans.

1. Can the cleint adopt a 401(k) plan while sponsoring a non-ERISA 403b plan?

2. Am I correct that the client cannot merge the non-ERISA 403b plan into the 401(k) plan?

3. If client terminates the non-ERISA plan does it need to wait 12 months to establish the 401(k) plan?

4. If the 403b plan is terminated, can employees roll the 403b assets, including loans, into the 401(k) plan?

Thank for any guidance you can provide.

With the revised final regulations are most folks getting rid of the circular 230 disclaimer on e-mail and other communications or replacing it with a broader, more general disclaimer? Thanks!

In 2013, I was covered under my spouses HMO through her employer, and I enrolled in an HDHP with an HSA through my employer. For 2014, my employer claimed that double coverage was not allowed under the ACA, and that I could only fund an FSA if covered by my spouses HMO. Others have told me that double coverage shouldn't prevent me from enrolling in an HDHP with HSA, especially since I have a pre-existing condition. Does anyone know if my employer is correct, or are they just creating their own rule?

Small business with 10 participants in a MPP, 7 highly compensated persons hitting the 52k mark. Want to terminate the MPP and start a new 401k using another low cost provider (currently using bank for MPP with high fees). We DO NOT want to convert to a 401k but rather terminate the MPP and start new 401k on 1/1/15. Question: Can some persons still keep money in the MPP or do you HAVE to roll it over into an IRA or the new 401k? Thanks in advance.