A 501©(3) organization established a non-ERISA 403(b) in 2009; only allowed for deferrals. In 2014 they added employer contributions and the plan became subject to ERISA. They added a 4-year graded vesting schedule. There is no predecessor employer

Under ERISA you can exclude vesting service before the establishment of the plan or prior to age 18. Can they exclude the pre-ERISA service? In other words, they want all existing and newly eligible employees to start vesting service in 2014 when the employer contributions were added to the plan. If yes, can you please provide a cite.

Thank You.

TPA Firm ABC (NOT a 3(16)) has an affiliate RIA that works with the various insurance platforms and receives revenue sharing payments from them. RIA is a co-fiduciary because they receive money for giving investment advice.

Would the revenue sharing payments constitute PT's? IT sounds like the relevant section of ERISA is 406(b). I was reading an article related to 3(16) Fiduciary Administrators where Fred Reish is indicating that such providers would NOT have PT's, so long as they are not involved in the investment decisions. So what of the situation I described?

ADP safe harbor contribution requirement is being satisfied through the 3% nonelective contribution. Plan also allows for ACP safe harbor match - fixed formula, $1-for-$1 up to first 3%, $.50-on-the-$1 on next 3%. Employer wants to amend the match formula to reduce the formula to just $1-for-$1 up to first 3%. The ACP safe harbor match is subject to a vesting schedule (not 100% vested).

It seems to me that this type of amendment is expressly allows under Treas. Reg. Section 1.401(m)-3(h), which provides that a Section 401(m)(11) safe harbor match may be reduced or amended during the Plan Year.

But, Sal's book states that an ACP safe harbor matching formula may not be modified during the plan year. This just seems to me to be contrary to the express language in the Treas. Reg.

Any thoughts, help on this is appreciated. Thanks.

Plan has immediate entry for employee deferrals, but requires 1 YOS for the employer match.

When I run the 410b test in Reilus Administration without dissagregating otherwise excludable employees the number of non-excludable NHCEs and HCEs are correct.

When I run the 410b test, choosing to disaggrate otherwise excludable employees, the number tested in the otherwise excludable group for the employer match is including employees who never met the eligibility requirements for the match portion of the plan (however they have a plan entry date due to employee deferral eligibility). Not only this, the test says they are benefitting under the match. I would expect to see the nonexcludable population from the first test I ran (w/o dissaggregating) to be split into two pieces when I disaggregate. It should be easy to check the numbers: sum of nonexcludables for 410b purposes not excludable by statute + nonexcludables for 410b purposes excludable by statute should equal the total nonexcludables from the first test, correct?

Do other users out there have the same problem? What is your workaround?

Also, if anyone can tell me what Relius' logic is in determining whether an employee is non-excludalbe and benefitting (what fields should I be looking in to trouble shoot), I would appreciate it.

Client maintains a QACA Plan.

New CEO wants to remove the match from the plan.

Do you agree they can stop the QACA match if,

1. 30 day advance notice is given to the plan participants

2. Match contributions continue through effective date of amendment

3. Participants must be given the opportunity to change their deferral election

4. The Plan must satisfy the ADP/ACP test for the entire plan year

Thanks

Have a large controlled group of ERs in a 401(k) plan - 0ver 100 participants

Have another controlled group of ER's that does not fit the Controlled Group rules to join the first group as a related ER. But has some common ownership.

What are the benefits of keeping the plans separate or setting up a Multiple ER plan.

I know that Coverage, Top Heavy and ADP/ACP testing must be done separately for the Related vs the unrelated.

I know it will be complicated to separate out as some Employees will work for both entities.

Benefits might be one Audit, One 5500

Anything else I should be looking at?

Pat

1. A participant didn’t have deferrals deducted from a commission paycheck in March 2013 (commissions are part of the definition of comp). However, if he did he would have exceeded the deferral limit. He wound up contributing $17,500. Does he still get the 50% QNEC and earnings for it?

2. Another participant had a couple of pay periods that deferrals weren’t deducted in 2013. However, if she did she would have exceeded the deferral limit. $1,444.48 should have been deducted, but that would put her $658.01 over the deferral limit. Does she get the 50% QNEC and missed earnings for the entire missed deferral or just the amount that would bring her to the limit?

Is there a penalty when a plan administrator does not cash-out the low balance accounts timely? (Assuming the plan document calls for it)

Obviously, it is a failure to follow the plan document. But has either service assessed penalties when the PA doesn't keep up with it? Or is it just "get it done" when it's discovered?

We have a client that merged their plan. The merger was to take place on 9-30. However assets were not transferred until 10-1. What would be the correct date used to consider the filing deadline? 9-30 or 10-1?

The old vendor is stating they were not aware that the plan experienced a merger and did not file the extension. They clearly received a letter indicating it was a merger from the successor trustee.

Thanks!

I have a client that has 5 owners. They each have multiple K-1s.

Owner #1 has 1 positive line 14, 1 negative line 14 and a W-2.

Owner #2, #3 & #4 has 2 positive line 14 and 1 negative line 14.

Owner #5 has a negative K-1, plus a W-2 and 1099.

Owners #1 and 5 are less than 5% owners.

They all made salary deferrals.

Owners 2, 3 & 4 have negative net comp.

The negative K-1s have a positive number on line 4 guaranteed payments, but a negative number on line 1 ordinary business income (loss).

so my question is what do I report as compensation? This plan has SHM. I assume that they can defer on the "positive" or guaranteed payments off those K-1s?

We have a client who has a small defined benefit plan and 401(k) plan. Only he and his wife are participants.

He wants to invest in Austrailian real estate. Can this be done?

Thanks.

I am new here but have read dozens of posts and realize that you guys are really knowledgeable and generous with your help. And I really need help.

I went through a nasty divorce, and 4 years later am still trying to finish the settlement. My Ex works for a huge publicly traded global company. Ex and the Plan Administrator have been friends for over 20 years. I cannot get a full and straight answer from the PA as to what my choices are to get my 50% (awarded by the court) of the employee stock options in the account. Every time I try, the PA contacts my Ex and then feeds me Ex's version of what he wants me to know. I finally went back to court and got a Court Order for Ex to authorize the company to give me the full information, but it is still being filtered by the PA.

I did finally get to see the account statements and have learned (after the Court Order) that in these 4 years, Ex has exercised and sold some of the stock. This situation of some sold shares and some unexercised Options probably has complicated the decisions on how to divide the account assets.

The only condition in the divorce decree is that the asset is to be settled in a way to cause the least tax liability to each of us. He is in a very high tax bracket and has to consider AMT. I am on SS and in such a low bracket that I owed no taxes the last 3 years.

How can I learn if the employer's Plan allows for Options to be transferred to me (and exercised at my own tax level) or what other choices I have in this asset division?

Thank you for any and all help.

Company has some benefit plans for Union ee's only, some plans for Non-Union only and some plans include both. Currently there are two wrapped plans (union, nonunion) but the nonunion plan has some benefits which include union. what might a best approach be - keep the two plans separate or actually just combine all into one megawrap plan?

A few years ago, I went to the optician and had him make prescription glasses for me that have their focal point at 18 inches, which is the distance between my eyes and my computer monitor.

It is SO much better than tilting my head up and down trying to get my regular prescription glasses ("progressives") to work properly, or taking off the progressives and working without any glasses (which I did for quite a while).

I can't imagine working any other way now. I put the "computer glasses" into my computer laptop bag whenever I take the computer with me. They even make decent reading glasses in a pinch.

Admittedly, everything's fuzzy if I walk away from my desk and forget to put on my progressives, but I can tell quickly when such a swap is needed.

They weren't too expensive, because I didn't get the anti-glare coating, the automatic darkening, etc. -- maybe the anti-glare would have been worth it, though. Still, I don't see any glare when looking at the high-def flat-screen monitor.

Give it a try!

Profit Sharing plan terminated in the 80's - Form SSA filed at the time indicated a benefit for a participant who went missing - the plan later terminated.... during the course of the termination IRS permitted the balance to revert to the employer (or so it is believed) - Now because of SSA sending the participant of notice of a possible benefit, the participant is making his claim for the benefit - can someone point me in the direction of the rules to go about paying this participant - I've tried searching in the ERISA Outline Book, but am only coming up with info on what do when someone goes missing as opposed to restoring their benefit - is interest applied to the benefit in the case of a terminated plan or are there outlined steps of how to proceed... just not able to put my fingers on it - any help would be appreciated, thanks

Seems like every time I look into an ESOP question, I wish I hadn't.

Suppose there is a SAR for a few critical employees. Suppose it basically operates as a cash bonus if the stock (all owned by a 100% leveraged S-corp ESOP) hits a certain strike price.

How do you take this into account for purposes of determining synthetic equity? Since a future stock value is a complete unknown, then is it safe to assume that there would be NO synthetic equity until the strike price is reached? Or is that an unwarranted assumption?

Hi all,

I am wondering if "Key Person" Insurance policies are generally subject to ERISA? This is not part of a group policy, only life insurance company offers is 100% paid by company for the owners of the company?

Thanks for any guidance you can give.

Participant wants to take a hardship withdrawal. He has roth deferrals only. The distribution would not be a "qualified" distibution under the Roth rules. Since we can only distribute deferrals (and not earnings) for a hardship, would this be non-taxable?

Can someone please clarify something about this new trend? If any of you all have had the same experiences as me, most of my clients problems do not originate from the services covered by 316. So for example, clients are not experiencing "liability" issues because of mailing out disclosures, failing to adopt timely amendments, signing 5500's, etc. I'm not saying that there are no problems with those things (nor potential liability) but certainly no "significant" liability that I have ever seen (in fact nothing beyond the DFVC user fees in my experience).

The problems come from things like this:

-Client provides bad census data (perhaps excluding anyone not contributing)

-Client does not implement automatic deferrals or does not implement a participant election

-Client inadvertently deposits Susan's 401k into Suzanne's account.

-Client does not send in 401k for a pay-period because someone was on vacation

-Loan payments do not get set up on the system.

-401k is not suspended for 6 months after a hardship

-A rehired employee is not permitted back into the plan after rehire

-Safe Harbor Match got deposited to the Regular Match account, and then people forfeited money when they closed their accounts.

-Even though requested on the census, family relationships are not disclosed

-Even though requested on the census, other affiliated entities are not disclosed

I just have a very hard time believing that these are the types of things for which the 316 will accept any responsibility whatsoever. In other words, while the 316's are out there saying "reduce/eliminate" your fiduciary liability, it seems to me they have only closed the door on the most benign of exposures.

Please let me know, maybe I am missing something. Maybe they are reviewing every transaction during the whole year and I just don't know what I'm talking about. Has anyone ever seen the contracts? My suspicion is that there are dozens of scenarios for which the 316 says "well, that's not my problem."

Case: Plan Sponsor of PS plan has always been husband/wife and always filed 5500EZ. Have not restated plan since non-standardized prototype which received DL in 1995, document signed in 1997.

Question: Is it satisfactory to restate the plan to a new prototype and submit VCP with Appendix C Part II Schedule 2?