Employer owns 3 companies. Controlled group situation exists.

Each company has its own plan. Plan A, Plan B and Plan C.

Client does not want to aggregate all the plans and wishes to test each plan separately. I understand that if each plan passes coverage on its own, we can do separate ADP/ACP testing.

My question is:

Is this an all or nothing situation? EIther each plan passes coverage separately or they are combined as 1, coverage is run and then other compliance tests follow OR can you combine Plan A and B, and if this combined plan passes coverage and Plan C passes coverage, you can then run your compliance testing separately for Combined Plan A&B and Plan C?

I hope I am making some sense here.

I understand that a 401(k) Plan can restrict cash or deferred elections to once per plan year pursuant to 1.401(k)-1(e)(2)(ii).

If a Plan has an annual enrollment period, does this mean a participant who elects a 10% deferral cannot elect a 0% deferral until the next annual enrollment period?

A participant in a 401(k) plan has requested to change his beneficiary to his new spouse. Currently his former spouse is the beneficiary. Does the plan administrator need any type of documentation that the divorce decree did not grant the former spouse a portion of his 401(k) that would be payable at his death? If so, what type of documentation would be needed (copy of divorce decree, letter from the participant)?

Thank you.

Can anyone tell me how many tax laws have been passed in the last 6 years?

Hello,

I have a client who added life insurance to the Plan and purchased a couple of whole life policies in late December of 2013.

While the premiums are substantial, the only portion of them which had cash value at year end are the Paid Up Additions.

The cost of insurance was almost as high as the value of the PUAs, and I'm not sure where and how to account for this on my balance sheet and 5500.

My prior experience has been with older policies where the premium simply adds to the overall cash value.

I was thinking of accounting for the COI as an expense, like other expenses, but an alternative is to call the COI a withdrawal from the plan, since it's not the same as a normal plan expense.

Call it withdrawal? Expense? Something else? Thanks for your help!!

If a plan hasn't been amended for GUST and EGTRRA--using App. C, Part II Sch. 2--must a filer send (1) a GUST amendment and an EGTRRA amendment (i.e., two amendments), each retroactive to the applicable effective date, or (2) may the filer simply send a restatement with everything? Thanks!

Hello, I am new to this board and am not a benefits professional, but this seems like a good source of information on a topic that is as clear as mud to an outsider. I hope I'm not breaking any rules with this post.

I left my employment in Sept 2013; this employer had a pooled 401k. The year end statement for 12/31/2013 was provided to me in May 2014, and they distributed my balance (~$130k) to a rollover IRA on June 1. The amount distributed was the amount on the year end statement.

In other words, any gains that my $130k portion of the pooled fund may have made between January 1 and May 31 of this year accrued to them, not me. Is that legal? Or should they have performed another valuation of my account prior to distribution?

A TPA client has multiple clients with SIMPLE IRAs. They would like us (the custodian) to set up their IRAs in an omnibus account. Is this allowed?

past age 25. Adult child is disabled. Can coverage continue past age 25? Can coverage continue under any other situation (another child is in graduate school)?

I reach age 70 1/2 this year. I have four Individual Retirement Accounts, two of which contain Individual Retirement Annuities and nothing else. The annuities have not been annuitized. I don’t plan to annuitize them for a couple of decades. Can I add up the Required Minimum Distribution (RMD) from these and take the total from one of the Individual Retirement Accounts not containing an annuity and by doing so satisfy my RMD for all of the accounts and annuities? Does the fact that the annuities are in Individual Retirement Accounts make a difference?

We ran into an interesting situation. We have 401(k) where owners already took out loans, have fully vested Profit Sharing money and plan allows for in-service after age 50. Both owners (h/w) have taken distributions from their PS such that now both account balances are well below the loan amounts. Husband is still employed but over 50, and so is taking in-service. Wife terminated a few years ago but wants to leave what is left of her money in the plan.

Since the 50% limitation for loans is designed to provide a remaining account balance sufficient to secure the loan, what about this situation. We are aware of no restrictions that keep the participants from withdrawing after they have taken their loans. In fact, since the loan balances are now more than the remaining invested balances, the wife would actually end up owing money were she to take a total distribution.

Thoughts and experience on this issue?

Just got an email from benefitlinks and noticed it said something about VCP Submission documents. When I clicked on the link it took me to the IRS website and i see they have new VCP forms.

Form 14568 is the Appendix C Part I - Model VCP Submission Compliance Statement.

I just received a signed submission back from the client and I am about to put in the mail when i saw this. The forms i used which i probably downloaded from the IRS website about a month ago did not have a form number.

Does anyone know if it's ok to continue to submit using the old forms or do we have start using these new ones right away??

When filing the SF instead of the EZ, are there questions that we do not need to answer because those same questions are not on the EZ? I'm getting the message from someone that the SF they filed has a lot of blanks because those questions do not apply to an EZ.

I read a post recently that I think is misstated (unintentionally). Here are the facts that I would LOVE to get comments on.

Individual business owner is wanting to make a charitable gift of his 401(k) assets to charity. However, he wants to take some of the funds from the plan and "distribute" and purchase a life insurance policy with the beneficiary (most likely) being family. It is possible that they could make the charity the beneficiary as well.

What I thought I read elsewhere (but don't believe this is possible) is that once the funds are distributed from the plan, they are taxable, regardless of an ILIT, correct? Whether the end beneficiary is the charity of the family, correct?

If that answer is YES, my question is why would an ILIT be necessary as the funds would have been taxed and, therefore, the purchase of life insurance with such funds would be not taxable to the beneficiaries. Am I missing something?

Thanks.

Sam

A lump sum restriction went into effect because an AFTAP wasn't certified timely. Once it is certified above 80%, are lump sums allowed immediately, or is there a wait time?

Can the start of auto enrollment be pushed out or does it have to start within a certain period from meeting eligibility in the plan?

Suppose a company currently has a Safe Harbor plan with one year eligibility and a QACA/auto enrollment feature in place. If the company wanted to offer immediate eligibility but did not want the auto enrollment feature to kick in until the second year of employment/eligibility, would that be allowable?

This might create more of burden with explaining it in the annual notice, but otherwise I'm not able to find a specific citation that would prevent such a delay in starting the auto enrollment. In describing the minimum initial percentage, the regulations (I'm looking at 1.401(k)-3(j)) do not seem to tie the initial period to eligibility or any specific date.

Does anyone see a problem with delaying auto enrollment like this?

Thanks!

We have a client who established a ROBS. Plan owns the company's stock. Client would like to terminate the plan but does not want to sell the stock as the client still wants to own the business. How can this be accomplished? Has anyone encountered this problem before?

A client is on the board of a publically traded company and receives stock options. He wants to take his owner only defined contribution plan assets and invest them in those stock options. Is he allows to have those stock options in his own DC plan? If so, are there any restrictions? Does this require a full plan audit or increase fidelity bond? Any help would be appreciated.

My client (plan sponsor of a self funded) group health plan is being asked to consider adding coverage for both therapies and ABA for covered individuals with autism spectrum disorders but not any other developmentally impairing condition (eg. Fragile X). Currently such treatments are excluded under the plan by the general educational, custodial and developmental coverage exclusion, or in the case of ABA under medical necessity/investigational guidelines. (The plan is not required to cover under ACA or any state law because it is self funded.) We are struggling with the potential for an autism only benefit to result in claims under the ADA by employees whose children have a need for such treatment but who have a condition that is not on the autism spectrum under the "subterfuge" exception to the bona fide plan rule. There seems to be little guidance on the subject and no recent case law. Any thoughts?

An auditor recently informed me that the fees paid when a participant takes a distribution/rollover should be reported on the Schedule H as a benefit payment and not as a fee. So if the distribution fee is $100 and the participant rollovers $10,000, line 2(e)(1) would have $10,100. Any thoughts on this?