Hi,

Does anybody feel that if a plan does not employ any NHCE's in a particular year, that the restrictions under -401(a)(4)-5 don't apply regarding payouts to HCE's? Has IRS ever opined on this issue that you know of?

Thanks in advance for any guidance.

Sam Winikor

I renewed online a couple months ago. Payment cleared, but I've never received anything indicating I'm renewed. Anyone know whether there's typically a response of some kind from the IRS? Thanks.

A participant is trying to get a hardship because (he claims) ever since Hurricane Irene three years ago, his basement floods when it rains heavily, and he finally wants to get it fixed.

1. Is there some kind of statute on how long you can make a claim on a casualty event? Hurricane Irene was in 2011.

2. Presuming that #1 is not an issue, is the plan sponsor OK with accepting the participant's claim that it was caused by Hurricane Irene? I'm not saying that they should have to hire some kind of foundation inspection, but...

Thanks.

Defined benefit plan provides for a life annuity with 10 years certain which is selected by the retiree. Retiree dies after 8 years. Remaining amount (2 years worth of payments) is paid in a lump sum to nonspouse beneficiary (as permitted by the plan). Is such amount rolloverable and is 20 percent withholding required on the distribution?

In most plans, do you have rule of Parity for both Eligibility and vesting?

In the appendix of the Corbel document, I can exclude either or both.

401(k) plan has discretionary match, calculation = ever pay-period, but currently there is NO Match.

Is it too late (for calendar 2014) to change the match calc to a plan year calc? If they were making a match, the answer would be "duh, of course it's not because everyone can only get more." But what if they are not making a match? One could argue that when allocating a fixed sum every pay-period (through a giant excel spreadsheet that looks at every pay-date) vs an annual calculation, some people will get more and some less.

What do people think? Or would the switch only really be permissible if the match is hard-coded into the document (i.e., in that scenario no one can get less)?

I just learned that a plan I administer (sponsored by company A) has been receiving salary deferral contributions from an unrelated employer (company B) for the last two years. The two companies share a payroll under company A's name but are otherwise unrelated. I guess you could say company A is acting as a leasing agency for company B.

They are not a controlled or affiliated service group. There is no participation agreement and the Company A's plan document is not set up for multiple employers.

Does anyone think allowing an unrelated employer to participate in a plan an issue that can be resolved through VCP?

Can a Charter School have its own 401(k) plan? or should it have something else?

Would it depend on the state they are in?

Cross-testing allows you to restructure the plan into 2 or more component plans.

The key words I am interested in are "or more."

Can you split the plan into 3 component plans?

A plan consists of 4 HCEs, ages 64, 55, 43 & 29.

It also consists on 16 NHCEs of various ages.

Can we test based on HCE1 & HCE2 in one compnent, HCE 3 in a 2nd, and HCE 4 in a 3rd?

Also, does it matter how you divvy up the NHCEs into the different component plans?

Thank you!

Is it permissible to amend an EACA plan mid year to add discretionary match and profit sharing contributions? How about to change entry date and Normal Retirement age?

Need some help (or a good reference) for a summary of the rules for Qualified Joint and Survivor provisions? I have a 401(k) plan that includes J&S for distributions only and want to be sure we are ok with the process.

I think in a nutshell: Participant must understand (such as on a distribution form, and with maybe an explanation notice, along with the 402(f) notice) that they may select an annuity as a form of payment. This information would apply to all participants both single and married participants. If married, the participant's spouse would need to consent to an election for a payment OTHER THAN an annuity. Does the explanation/notice (in advance of the pariticipant's payment election) HAVE TO provide details (any or specifics for the individual participant) about the annuity payment?

Is there something needed that addresses 'most valuable benefit'? and someone noted concerns about QPSA (different or same needed- I'm not sure)?

I understand that a plan consisting solely of deferrals and safe harbor contributions will get a free pass on Top Heavy testing. If this true even if:

1) safe harbor contributions are NOT made to HCE's, and

2) some of the HCE's are non-key (meaning there are non-key EE's who can never get an employer contribution in the plan)

This lovely pre-PPA Rev. Proc. outlined funding method changes that were granted automatic approval. In particular, a plan that was using an average asset valuation method could change to fair market value providde the average method had been used for the preceding 4 plan years. I'm unable to determine that 2000-42 was revoked or superseded or on the other hand locate any guidance that it does indeed continue to apply..

Any thoughts on this subject would be appreciated because a client could (at least he believes) benefit from changing to FMV but only if the IRS approval process can be avoided.

Good morning, everyone -

So I'm reading up on the fee disclosure requirements and the use of electronic media and I am Dazed and Confused. I'm reading that for the Investment related information (the chart, etc.) that the DOL Safe Harbor IS available. Meaning:

-If email is an integral part of your job; OR

-You opt in to electronic delivery; then

You can receive the disclosures electronically. Otherwise, you need to receive paper.

Then there is this ridiculously complex Alternative Method which as far as I can tell is a far less efficient way of obtaining the very same result. So what gives? What is the practical purpose of this Alternative Method? The Alternative Method requires participants to receive paper notices asking them if they want to opt-in and then they must receive a paper annual notice each year, etc.

Until now, I thought the Alternative Method was the only e-delivery method available for the fee disclosures. I did not realize it was in addition to the existing safe harbors. I just cannot figure out what you get for all of your efforts in complying with the Alternative Method...

I'm setting up a new 401(k) plan for a client and applied for an EIN using the IRS's on-line system. When applying, you are asked the type of legal structure that is requesting the number. I checked the box for "Employer Plan." As a result, the EIN I received is in the name of the retirement plan, not the trust. When I sent the EIN letter to the recordkeeper and custodial bank, and they told me they would not accept it because it was not for the plan's trust or in the name plan sponsor. Does it make sense as to why the recordkeeper and bank won't accept the EIN for the plan? Any help would be appreciated.

The plan compensation definition excludes section 125 contributions to a cafeteria plan. It fails 414s testing. It is my understanding that I can allocate the profit sharing contribution on the compensation excluding the section 125 contributions, but I have to test on 415 comp. Is that correct?

when using the 415 comp, the gateway test fails. Do I just give an additional contribution to the participants that are failing based on their 415 comp? About half of the employees received less than 5% of their 415 comp.

thanks for you help.

I know that under the FMLA, participants on unpaid FMLA leave have reinstatement rights immediately upon return to active employment, but what about other "terminations for nonpayment" --

For example, if someone is on non-FMLA unpaid leave or if someone's payroll amount is not sufficient to cover the employee share of the premiums? If that individual is terminated from coverage for nonpayment and later begins paying again...

(1) Does that person have to pay up all arrearages before being reinstated? Or do they just have to pay going forward (and have their coverage canceled retroactively)?

(2) What if that person has a qualified life event during the period he/she is not covered? For example, if that person got married during an unpaid LOA and seeks to be reinstated... would that person be eligible for an election change immediately upon reinstatement?

(3) What if that person is terminated while on unpaid LOA and benefits were terminated for nonpayment... ignoring any other legal issues, would that person be entitled to COBRA if they were not participating on the date of termination?

Does anyone know if the employer's payroll tax liability and 945 tax liability are combined for purposes of the timing of depositing form 945 tax?

Client remits payroll taxes semi weekly.

In looking at the instructions for the 945, it says that if tax liability reported on the prior year's 945 is less than $50,000, the employer is a monthly tax depositer.

Client received a penalty notice for not paying 945 tax timely. Amount of 945 liability in 2012 was 0. 945 Tax for 2013 was $3,000.

Tax liability date was 3/14/13. Tax was remitted on 4/12/13 through EFTPS.

Thank you.

I found out that one of my plans did not fund their 2012 ER (P/S and SHNEC) by 9/15/13. the owner had deposited $5500 out of the corporate account into his and his spouse's 401k brokerage account in August 2012 and in July 2013 they were told this wasn't allowed (not deferrals from salary). he was fine with that and we instructed the broker to move that money out and into the pooled account (plan only allows individual accts for 401k deferrals, trustee directed pooled account for ER $). Earlier this month I requested copies of all the brokerage statements for 2013 and found that this money was never moved. The client did deposit a check last August for the difference still due for the 2012 P/S and SHNEC, but I am short $11,000. The tax return was extended.

Where can I find the cite to correct this? I have told the broker that she needs to move that money asap (she was told to move it 3 times last year) and that Lost Earnings need to be made up on that money. From 9/15/13 for the P/S and 12/31/13 for the SHNEC? Does anyone know where on the DOL or IRS sites I can find info to forward to the broker on the correction? The bottom line is that she didn't do what she was supposed to do.