if deferrals are returned, whether it be for 402(g) excess or to correct an

ADP failure, is the effect on the 5500 simply a matter of whether

cash or accrual accounting is used otherwise ..does the return impact the year

of contribution or the year of return.. also how do most peope handle participant statements

with returns...reflect the return in the year of return??

Does anyone know if the benefits records of an employee (health and welfare plans, retirement, etc.) can be merged into an employee's official personnel/employment file once the employee terminates? Or, should the benefits always be maintained separately for audit purposes?

The PBGC is trying to have the Schedule SB changed to require reporting the Funding Target for inactives broken down (as is done for actives) into vested and total amounts.

1. Is anyone out there including any non-vested benefits in the Funding Target for non-actives? If so, why? Most plans contain language that treats non-vested participants as forfeiting their benefits immediately upon separation from service (having been "paid" a lump sum of $0 for the "vested" portion of their accrued benefit), and such people are dropped from the Funding Target immediately, without having to wait for a full break in service to occur. True, if rehired the "forfeited" benefits are restored, but is anyone including anything in the Funding Target for people who have not actually been rehired?

2. If a participant terminates with partial vesting and, more than 5 years later, the plan terminates, does anybody think that the non-vested portion of the accrued benefit must be restored and paid out if the participant has not been rehired?

3. If a participant terminates with partial vesting and, after some years elapse without the participant having been rehired, the participant reaches normal retirement age, does anybody think that the non-vested portion of the accrued benefit must become vested and payable?

Some of us tried to put our heads together on this but we are having a great deal of difficulty imagining a situation where the Funding Target would include any non-vested benefits for inactives.

Are there many plans out there in which people who terminate prior to eligibility for a subsidized early retirement benefit (say unreduced benefits at age 60 with 30 years of service) are able to grow into the subsidy (the way ongoing employees can after a plan has terminated)? Since no further service would be accrued, the only way to grow into eligibility would be to already have enough service before termination of employment and then become old enough and actually claim it. In that case, wouldn't the right to the subsidy, contingent only on remaining alive until early retirement age and then claiming it, be considered vested?

What is the PBGC concerned about here?

Assuming the following:

1/1/13 trust statement asset - 100

1/1/14 trust statement asset - 200

7/1/13 contribution made for 2012 plan years – 100

2012 effective rate – 5%

What is the rate of return during the 2013 year for the purpose of the credit balances adjustment:

Option A: Since the contribution was made for the prior plan year, include it in the beginning of the year value discounted with the 2012 effective rate. Therefore the rate of return is

200 / (100 + 100 / (1.05^0.5)) = 1.22%

Option B: Account for the timing of the contribution disregarding the fact that it was made for the prior plan year as: 100 * (1+i) + 100 * (1+i)^0.5 = 200 . Which gives you 0%.

Other - ?

I know plan documents govern the beneficiary designation of a 401k, but is there any liability to an employer for not making sure all participants have a named beneficiary on file?

Participant, age 78, non-5% owner, not retired up and dies in October 2013. Spouse, only beneficiary, age 76 is about to receive the distribution from the Plan. Spouse intends to do a trustee to trustee transfer into an IRA.

First, assume that her RMD is withheld from the amount eligible for distribution and direct rollover, does she need to take a second RMD prior to December 31, 2014 from her IRA.

Second, does she not take an RMD out of the distributable amount and only take one RMD after the trustee to trustee transfer of the entire amount. (We think no, because 402© prevent a rollover if the RMD is due in the same year).

Any thoughts? Help? Much appreciated.

New plan for new company has 5 participants. Immediate eligibility for all. Profit sharing contribution is new comp, by group, each employee is a separate group.

At least 4 of 5 are participating in 401(k). Match discretionary to be determined at year end.

The first year all will be NHCE. Can a discretionary profit sharing contribution be made for only one NHCE?

The DB benefits election packages I prepare typically require the participant to check one of three boxes:

[ ] I am married

[ ] I am not married

[ ] I am married but cannot locate my spouse

Are practitioners modifying the election packages they prepare to request additional information? This seems like a damned-if-you-do and damned-if-you-don't proposition. On one hand, the Plan would endeavor to respect a participant's privacy. On the other hand, you'd hate for a legally married beneficiary to show up some day and demand a survivor benefit when benefits weren't reduced to cover the cost.

In absence of any convincing direction, I will not change the package understanding that married is married and you could have the same issue with a heterosexual estranged spouse if the participant checks the "I am not married" box.

Adding modifiers such as "legally" married can be problematic. For example, Texas recognizes common-law marriage in respect to the J&S stuff.

Thoughts?

does this constitute a BRF that would need to be tested (and will fail) since only the 3 owners are allowed to enter as of a date that is earlier than the 1 year of service requirement? This is a new plan and a new employer. No one was hired (or so they say anyhow) until a couple of weeks after the owners established the practice. The owners all have the same date of hire in the third quarter of 2012, so would not be eligible to enter using the standard 1 year of service. All other employees were hired after the owners and are not eligible because of the 1 year wait and they were not employed on the date being used for the "employed on date" waiver.

Company A acquires Company B through a stock purchase. Company A’s plan requires 1 year of service and as quarterly entry dates (1/1, 4/1, 7/1, 10/1). Company A acquired this company on May 1, 2014.

1. Am I correct in my thinking that the employees of Company B that have been there 1 year would all enter the plan on 7/1/2014?
2. What code section supports this conclusion? My guess it is somewhere in the controlled group regs.
3. Is there a private letter ruling possibly on the subject? I am trying to give the client an example to support my

Not sure if I'll even ask this right, but here goes. Aside from "what does the plan say" I'm more interested in legal/regulatory requirements that might prohibit this, or practical considerations.

Suppose you have a new ESOP. S-corp, leveraged ESOP, 100% of stock. Plan is effective for 2013. Loan doesn't take effect until 2014, with a 10-yer repayment schedule, at the end of each year. Shares will be released as usual, etc., for the second and subsequent plan years as the loan payments are made. (2014 onward)

The first year contribution is cash, and is allocated as such. What happens if they want to, say in June of 2014, take the cash that was contributed and allocated to participants for 2013, and purchase stock with it? Or perhaps to make it simpler - can the Plan Trustees/Administrator/Fiduciaries, at any time, purchase stock with the cash in the plan (assuming not messing with diversification rights or anything like that?)

I'm perhaps making this more difficult than it is, but maybe I'm missing something critical?

We are looking for a 5 year plus Third Party Administrator and curious if anyone has had success using a national recruiter and if so, who? Also wondering if there are some other resources we should be considering in addition to this site?

Any insight is appreciated!

We have a former employee that has submitted paperwork from a 403(b) providor, to move her Ohio Deferred Comp funds (457)to the 403(b) providor. Wouldn’t she need to contact Ohio Deferred Comp to start the process to move funds from her 457 to that providor? I am not sure what role we as an employer would have for her moving funds from OHDEF to a 403(b) account. Are there IRS regulations that require the employer to be involved in distributions of a governmental 457?

Thank you,

Are there regs similiar to IRC 401(k)(4)(A) or Treasury Regulation 1.401(k)-1(e)(6) that apply to a 403(b) plan that prohibit a benefit be provided based on the participant's election to defer to a 403(b) Plan?

Thanks!

A Participant had a missed deferral and match corrected in 2013. It was for December of 2012 and January of 2013. The deferral went in as a QNEC for the correction and the match went in as a match. Does the match count in the ACP test for the corresponding year?

I've been reviewing Revenue Ruling 2014-09, and it appears to apply only to rollover contributions going into 401(a) plans. Does this extend to rollover distributions into nongovernmental 403(b) plans?

This seems like it should be a simple answer, but I haven't yet seen any guidance that explicitly included 403(b) plans.

Thanks!

If I transfer, say $20,000 to a Qualified Replacement Plan, I understand that I need to allocate not only the $20k, but also the earnings to the participants (within 7 years).

However, do I HAVE to allow the QRP suspense account to accrue earnings? Can it just sit in a cash position like a forfeiture account?

How are practitioners dealing with clients whose arrangements provide for post-termination of employment compensation based on payments within the controlled group? This can occur in a variety of sales situations. For example, Company A is the sales division of Goliathco and sells many products, including the products manufactured by Company B, which is the manufacturing division of Goliathco. Salesperson 1 is the top salesperson at Goliathco and would like to retire. Company A would like Saleperson 1 to transition her clients to Salesperson 2 prior to retirement. As such, Company A typically enters into an agreement to pay Salesperson 1 a portion of the commissions generated by Salesperson 2 due to sales to Salesperson 1's former clients for a period of 2 years following retirement.

Because Company A and Company B are the same 409A "service recipient," the special date or fixed time rule does not appear to be available for any compensation paid based on the receipt of payment by Company A from Company B. None of the other 409A permissible payment events are triggers, so the only option left appears to be exemption as a short-term deferral. That approach would be premised on the likelihood of a sale not occurring constituting a substantial risk of forfeiture. That is so facts-and-circumstances based it seems risky. Am I missing something here? Thanks!

We have a problem. In a H-W plan, the husband recently took a full distribution of his benefit as a rollover. For some reason, two points were ignored - 1) the 110% test and 2) the fact that the AFTAP would be less than 80% after the distribution. Other than fully repaying the distribution with earnings - are there any other solutions?

Thanks!

Facts: Participant, former 5+% owner begins receiving RMD at age 70.5. Participant takes RMD during the next 3 years, during which time his ownership is purchased by other owners. Participant becomes a 0% owner, remains employed and continues to participate in 401(k) plan. Participant would like to suspend any further RMD's siteing the fact that he is no longer a 5+% owner. The Plan document allows for Non-Owner Participants to be exempted from RMD until separation of employment.

Question: Can the RMD's, once begun, be suspended at the request of the Participant, to be resumed at a later date or terminationn of employment? Or must the RMDs continue to be calculated and distributed each year.