A client was informed this morning by the company that performs its actuarial functions for benefit plans that the "enrolled actuary" that signed the client's 5500s for the last few years has been misrepresenting his professional credentials. In fact, this person is not an enrolled actuary.

Has anyone faced this situation before? Does the client need to amend its prior 5500 filings? Are there additional steps the client needs to take?

Thanks in advance

In what instance can the owner of an LLC participate in a 401(k) Plan?

LLC is a single member LLC 100% owned by the the owner. Can the owner participant in the 401(k) Plan he setup for the employees of the LLC.

It's been awhile since I tackled this so wanted to be sure I have it correct:

Sponsor has one participant deferring $100/check semi-monthly and CONSISTENTLY held checks and deposited them very late. Plan started in 2012 and we only discovered the extent of this recently as we tried to put together 2013 data, and everything still due, including lost earnings was paid last month.

Facts (I have used IRS calculator to determine lost earnings):

• For 2012, all deposits were delayed, for up to 217 days - total delayed deposits = $2,400, total lost earnings = $22.85
• For 2013, all but the first two deposits were delayed again for over 200 days - total delayed deposits = $2,200, total lost earnings = $44.39

The question is what figures to I put on the 2012 and 2013 Form 5330?

Situation:

Man lives with his aunt. At the end of the month he must get out. Reason: unknown.

Can he take a hardship for a down payment & 1 month's rent?

Safe Harbor reasons.

My employer sponsors a 403(b) plan with multiple vendors and no central recordkeeper, which sometimes causes issues for us.

While reviewing the asset transfers processed in 2013, one of our vendors discovered an account for a terminated participant that was transferred to another vendor and reported as an asset transfer within the same plan. However, the participant was moving money to a 403(b) plan of a new employer, and the receiving vendor accepted as an external rollover and deposited it to the new employer's plan.

Unfortunately, the paying vendor did not obtain spousal consent for the transfer/distribution.

What are our options? Attempt to reclaim the assets? Have the participant complete termination distribution forms which include spousal consent, and then adjust the transaction to a termination distribution and direct rollover instead of a transfer? Report the distribution as taxable and ineligible for ollover treatment? (That should get someone's attention.) We know we have a compliance problem on our end but is there any potential issue for the receiving employer? We have attempted to contact the participant several times without success.

An ESOP holds 30% of an S-Corp's stock and the owner holds the other 70%. I understand that distributions (not dividends since this is an S-Corp.) are often used to pay down the loan. One article I read says that distributions cannot easily pass through to ESOP participants. However, this client doesn't want to pay down the loan or allocate it to participants. Instead, the company would rather use the distribution for other plan obligations -- perhaps to liquidate the shares of retiring employees or for plan expenses, for example. I'm looking for something that definitively tells me that that would be okay to do. I've looked through the BNA ESOP portfolio, thinking that surely that there would be a discussion about the earnings distributions there, but I didn't see anything. Can somebody point me in the right direction? Before amending the plan, I want to make sure that what they want to do is permissible.

All of a company's employees (including the owner) are leased employees. During the first 10 months of the year, they are leased thru Company A. Company A pays the employees and submits taxes on their behalf. The employees participate in the Leased Company's MEP Plan. The employer funds the MEP with a 7.50% contribution. During the last 2 months of the year, the employees are leased thru a different leasing company that does not have a plan. If the employer also maintains a plan, can he offset any required and/or discretionary contributions that are due to his own plan by the contributions he made to the MEP?

Plan currently has a Safe Harbor Match - the employer would like to eliminate the SH Match in favor of a match subject to vesting - The plan year just started 6/1/2014 - so we're just two months in.... to elminate the SH match - need to give 30 day notice, amend plan before end of PY and then be subject to ADP testing and TH requirements (this is prior to PY's beginning after '14 after which midyear SH suspension is permitted only if you’re operating at an economic loss or had included a potential reduction/suspension statement in your annual safe harbor notice to participants.

Is it permissible for the employer to turn right around and implement the new match that will be subject to vesting. Say that the SH provision is eliminated effective 8/31/14 and the vested match starts 9/1/14. I don't see any reason why this wouldn't be permitted, but wanted to hear some thoughts.

A 401(k) plan payed out a distribution to an Alternate payee (ex-spouse) based upon a draft DRO. Two weeks later the DRO was entered into the court.

Assuming the DRO is reviewed and found to a QDRO, what corrective action is needed to make it so that the plan is in compliance?

The DRO specifically provides for the amount awarded to be eligible for distribution to the alt. payee after the date of the Order (if the Alt. Payee so elects).

Problems

The plan paid out a substantial amount before there was a DRO

If the DRO is followed today - the participant would get another substantial payment

Normally, I would say the plan needs to try to recover distribution #1, Review the DRO, if it is a QDRO, then segregate and make pmt #2 (alt payee wants the $).

I don't really see the point in putting the money back in just to take it out, so I think the only other option to avoid that is VCP asking the IRS if they will just call it good.

The other alternative is to get the DRO amended so that that payment #1 counts, but then the plan is still out of compliance since it made the distribution prior to the QDROs existence.

Any thoughts?

Any options other than VCP? I think even if the plan goes through VCP the DRO needs to be amended to account for the earlier payment, probably by taking out the language that the distribution be made after the DRO date.

If the plan sponsor corporation dissolved, but the plan still needs to be restated, and terminated, who typically signs the documents in such a situation? The Plan Administrator/Trustee, under the general authority to administer the plan, etc., etc., or do you have to get into the DOL's "abandoned plans" guidance - which I haven't looked at yet.

Not a real life situation (at least not yet) but there are a couple where this might yet come into play...

This may seem like a simple question, but as you think about it, more questions come up.

Is an Employer required to notify participants in a Safe Harbor Non-Elective plan that they will no longer take EMPLOYEE Deferrals?

The Employer has not said anything about terminating the plan or the situation of the company.

If a person has a DB Plan and a SEP, and they contribute the $52,000 limit to their SEP, are the two plans subject to the 31% limit? In other words, is it true that the combined SEP and DB contributions can't exceed 31% of earned income? Thanks for any responses!

A participant in a small plan elected out of making pre-tax deferrals, however payroll did not pick up on this for several paychecks nor did the participant.

1) Can the deferrals along with income be returned to the participant?

2) If so, how would the company treat it? As ordinary income or would a 1099 be issued? Let's say the deferrals totaled $1000, the participant grosses 2000 per pay period. Would the plan sponsor just bump up the gross to $3000? It would not be subject to FICA, correct?

Has anyone ever seen guidance addressing whether a participant in an IRA who has a fee deducted directly from the IRA could reimburse the account the amount of the fee, without it counted as an annual contribution? Thanks for the help.

Company funds a SIMPLE IRA for 2014. Wants to move to a 401(k) plan. Company fiscal year ends 9/30/14. If they stop SIMPLE @ 12/31/14, can they adopt a 401(k) on 1/1/15 with a short plan year of 1/1/15 - 9/30/15?

I have seen language that says a company cannot sponsor another plan in the same "plan" year as the SIMPLE and language that says a company cannot sponsor another plan in the same "fiscal" year. Which is correct? This is assuming they do not want to "void" the SIMPLE for 2014. Thank you for any clarification.

Their Schedule A indicates that all of the money other than the TIAA Traditional Account is in pooled separate accounts. Yet on their Schedule D report, they include ONLY the TIAA Real Estate Account. Has anyone ever looking into why that is? I assume that we should be doing it more like Hancock does - listing each fund with "000" as the plan number.

I don't really care, I will continue to exclude them based on TIAA's Schedule D report (let TIAA defend it if it ever gets questioned) but was wondering if anyone had ever looked into this.

Besides the typical checking of prior addresses, checking with beneficiaries on file, Google and social media searches, what are people using to find participants now that the letter forwarding is discontinued? Has anyone used an online service such as - Intelius?

Is the buy-back provision (of rehired employees who wish to restore their prior distribution in order to have their nonvested balance restored) a required provision or is it optional?

I have a 457plan with a rolling 5 year vesting provision, so 2013's contributions vest in 2018 and so on. However, the Participant becomes fully vested at NRA.

Is this easily corrected by distributing the excess before 4/15th of the tax year following the year in which the contributions vest? Or is this a bad plan design doomed from the start (assuming the individual will work until NRA).

There would have to be some provision like this, otherwise the Executive will ALWAYS forfeit something.

I'm wondering if we should set up a separate 457(f) Plan for the employer contributions. I suppose there is no reason not to set up the 2nd plan?

We have a participant who terminated from a plan who is under age 59.5. At the time of termination the participant did not take out heir money. The participant is now disabled and would like to make a withdrawal. Would we waive the 10% penalty for this person even though they were disabled after termination?