Does anyone have any insight on paying too much out to an employee as far as the employer match goes?

For instance, when we verified hours of service with a company that we just took over, we were informed of 5 years of service with over 1000 hours, indicating in this plan that the employee would be 80% vested. However, when needing to dig down for actual hours during an audit, we were informed that the employee should have only had 4 years of service, indicating 60% vested. The dollar amount difference is only $50 between the 80% and 60%. I could see an issue if it was the other way around where the participant got shorted. But in this case, the employer paid out too much so it really only affects the employer, not the participant. Does anyone have any thoughts or documentation on how 'severe' this over-vesting payout really is?

I have a client that has a number of employees with unused vacation. They questioned whether or not this unused vacation could be deferred into the 401(k) Plan. They want to get this obligation off their books and thought perhaps they could avoid payroll taxes with this option.

Their plan does not currently permit this type of contribution.

Has anyone had experience with this?

Would it be considered an employee contribution and require employer match? Or would it be a QNEC?

Any insight would be appreciated!

Thanks

My TPA is telling me that the spouse of an employee, who is also an employee, cannot participate in our company sponsored HRA. Our company offers a HRA to employees who "opt out" of health coverage and provide proof of alternative coverage (non-market place). Two employees, husband and wife, work for same company. Husband elects family coverage, wife opts-out and is enrolled in HRA. My understanding is that each employee has an individual right to make an election, what am I missing? Furthermore, there seems to be a disconnect as to whether or not our HRA is considered integrated. Who sponsors the group coverage is not a factor, simply that the employee enrolled in the HRA is actually enrolled in other group coverage. What am I missing here?

Section 3121 defines "qualified church-controlled organization" as meaning any "church-controlled tax-exempt organization" described in Section 501©(3).....

So the word "controlled" is in both the definition and the term to be defined.

What constitutes control?

Is "church-controlled tax-exempt organization" defined anywhere?

in conjunction with the reports I posted a few years ago to import ssa data into FT William

these are my 'double check' of the data

A D will print next to someone who has been paid and terminated over 2 years ago on the distribution report

An A will print on terminees who quit last year on the termination report

Might miss people if the dates are 12/31 or maybe 1/1 in a leap year, but they seem to work.

of course, no 100% guarantee

Distributions ssa code.rpt

terminated with ssa code.rpt

client's plan receives a k-1 for investments in an lp and

an llc.

does the schedule i 3a question on partnership

interests include all investments reporting on a k-1

regardless of entity type?

for the schedule i 20% investment question is the

k-1 reported capital interest considered a single security? I

would think yes....

lastly, the fact that the investments are shown on a brokerage statement

is not material as to either the exemption from the audit requirement

or the ability to do a 5500sf filing....correct??

A company let a participant borrow $ and now the participant left the company. The participant is willing to sign over part of their 401k back to the company. For example they would take a distribution that was taxable to them, but make the Company the Payee. If there is signature guaranteed distribution request - is this ok? Any guidance would be appreciated.

Hello. I have a plan participant who is undergoing treatment for cancer and wants to give her husband authority to sign off on any distributions they may need from her 401k if she because unable to sign. From what my document provider states, they can use a power of attorney. Anything else I should be concerned with?

Husband and wife have two separate businesses, each has a pension plan, we are the TPA for both.

I had suggested a QDRO years ago, neither party went with the idea. Probably neither wanted to pay or the attorneys talked them out of it.

Five years later the divorce is final and the wife is to get $x as part of the divorce decree and wants to roll it into her plan.

Absent a DRO, I believe the full amount is taxable to herald she can not roll it into her plan???

Is it acceptable, for the "manually signed Form 5500" attachment, to have the plan sponsor's electronic signature? Thanks!

How do non-Roth after-tax contributions to a DC plan affect the DB/DC combo limit rules in 404(a)(7) ?

I've read 1.125-3 and it does not speak to the fact if a participant chooses to catch up missed contributions, gets reimbursed their full election, and just tells their employer "not coming back". Does the reimbursements become taxable to the now ex-employee, or does the employer ask for the reimbursement to be returned?

I have a client with a 3/31 YE profit sharing plan. The plan sponsor has been a C-Corp, also with a 3/31 YE. In 2013 the owners created a new S-Corp with a 12/31 YE and this new S-Corp is the plan sponsor for the profit sharing plan. I know that, for the 1/1/13-12/31/13 tax year, the S-Corp cannot deduct any contributions as the 4/1/13 - 3/31/14 plan year had not ended so the contribution they accrue for PYE 3/31/14 will be deducted on 2014 corporate tax return. Here is my question: when must that contribution be made? My initial thought was that it is based on the plan sponsor's tax return due date (so 9/15/15 with extension). However, we would accrue on the plan's books a $100k receivable as of 3/31/14 and then accrue the next year's receivable of $100k as of 3/31/15 before the original accrual is paid off on 9/15/15. Will we just be carrying two years' worth of accruals until the plan terminates?

When calculatiing the maximum benefit a participant can recieve when a Cash Balance plan has an offset feature, is the maximum benefit (the 415 limit say $2.6 Million) before or after the offset?

If the Offsetting profit sharing plan for example has $2 million. Is the lump sum beneif only $600k or is it still $2.6 million, which would make the full benefit $4.6 Million?

Thanks

Basic 401(k) plan with a 3% Safe Harbor Nonelective contribution.

Adoption Agreement defines Total and Plan compensation the same: "W-2 Wages, including Elective Deferrals, pre-tax contributions to a Code §125 cafeteria plan or a Code §457 plan, and qualified transportation fringes under Code §132(f)(4). "

Basic Plan Document further defines W-2 Wages as:

"Wages within the meaning of Code $3401(a) and all other payments of compensation to an employee by the Employer (int he course of the Employer's trade or business) for which the Employer is required to furnish the Employee a written statement under Code §6041(d), 6051(a)(3), and 6052, determined without regard to any rules under Code §3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed. " (emphasis mine).

This plan does not name any exclusions to compensation.

The employer, per the Affordable Care Act, now is required to and does report in box 12 of the W-2, the full amount of the cost of the employer sponsored health care. They report as it as a single sum using code DD. The portion that the employee pays pre-tax and the portion the employer pays are not split.

Example Numbers

Pre-tax Deferrals $5,000

Other wages taxes $65,000

Health Insurance Costs $15,000 - I do not know what portion is ER and what portion is EE.

Lets say $6,000 is EE and $9,000 is ER.

What compensation does the employer pay the 3% Safe Harbor on?

Prior to the ACA I would have calculated the 3% on $5,000 + $65,000 + $6,000.

But now I wonder if the ER portion of the health cost has to be included. I hope not, but I can't see a way around it under the terms of the document.

Thoughts?

If you amend eligibility on a calendar year plan, is it effective the date the document is signed, or can it be effective the date that a corporate resolution is signed? Reason I'm asking, we are a TPA and have a investment broker that we believe back dates certain documents. Spoke with broker on June 2 about possible amendment to plan eligibility with no amendment date given and we prepared amended and restated document with July 1 amended date. Now all of the sudden a corporate resolution is showing up, dated 5/28 with a June 1 amendment date. Currently the plan has immediate eligibility with 100% vesting and no accrual requirements to receive employer contribution. The amendment made a certain class of employees (retail class) employed after June 1 have a 6 month wait and a 3-year cliff vesting schedule. Unfortunately, we do not have a relationship with the plan sponsor. What would you do if you believe a broker is back dating documents?

Hi,

I am working on late 5500s for a client ( 100 plus covered) with a self insured health plan and insured LTD plan. My question has to do with what schedules are required for the health plan. We received Schedule A information from the claims Administrator for the Health Plan, but since there is no insurance carrier, I am thinking no Schedule A is necessary. The broker received commissions in excess of $5K do those get reported on Schedule C? In my reading of the instructions many times, it looks as if no schedule H or G is required.

I appreciate any help as I keep rereading the instructions and end up more and more confused....

Thanks,

I know little or nothing about 409A plans, so I apologize if my question is too basic. We have been asked by a plan sponsor if a terminated employee's income from their 409A plan can be included in compensation for their 401(k) plan. The payments are only available after termination of employment and will continue for 5 years.

The 401(k) plan's definition of compensation is W-2 wages, which would include distributions from a non qualified plan. But the payments only being available after termination of employment makes me think they can't be included in 415 compensation. And with no 415 comp, there could be no deferrals.

What is the rule on this?

Hi,

A 457(b) governmental plan allows participants to elect their normal retirement age for the special pre-retirement catch-up. Can a participant retire this year (age 60) and begin taking their unreduced DB benefit and turn in their 457(b) special catch-up papwerwork declaring their 457(b) normal retirement age as 63 so they can make the catch-up contribution this tax year?

The 457(b) regulations refer to declaring a normal retirement age and not a normal retirement date. At first blush it appears that the taxpayer could do this but I have heard that IRS auditors saying that taxpayers can't do this. The taxpayer would need to turn in their 457(b) special catch-up form declaring their normal retirement age before telling the DB plan or employer that they are going to retire in the same tax year.

Has anyone had any experience with this? Also, if the IRS says the taxpayer can't do this does anyone have any IRS published guidance showing they can't.

Thanks.