Suppose plan currently uses prior year testing. If they amend the plan this year (2014) to utilize the top 20% election, are those people who will no longer be HCE's due to the election still counted as HCE's for 2014 plan year testing, because they were HCE's for 2013? So that the amendment would have no real effect until you do 2015 plan year testing?

Or, can you count those people as NHC's for 2013, since you are doing "2014" testing?

I'm inclined toward the former...

If for the past 2 years, a client has been making 401(k) deferral contributions on behalf of an employee on leave out of post-tax payments that are not allowed to be used for 401(k). The employee has no other income from the client to make 401(k), and therefore should not have contributed anything.

What is the correction method?

Are there multiple ways to correct?

Do you have to file anything with the IRS or can you self correct?

My experience with excess 401(k) contributions is to refund the money and earnings as ordinary income, but that was for contributions over the $17,500 limit. I am not sure if it is different if all of the 401(k) contributions are disallowed, and if it spans multiple years.

Looking at PPA restatements, I am thinking about my default being to allow rollover-in-kind. Has anyone ever had any problems with this?

Does anyone have a form they would be willing to share: that is for an employee to sign certifying that the money he is rolling into the 401(k) plan comes from an eligible source?

Could a Limited Liability Partnership have w-2 and k-1 comp for the partners that counts as Plan compensation? I was thinking it they were taxed as a corp it would be w-2 and if they were not taxed as a corp it would be k-1.

I am doing ADP/ACP testing on many plans within the same controlled group. All are calendar year, all have current year testing. Most have different rates of matching contributions and employer non-elective contributions. I am testing all excluding those below the statutory eligibility. If I permissively aggregate some plans what other testing do I need to do? For example, I aggregate 2 plans. One plan has some employees receiving a 3% match, and some employees excluded from the match. The other matches 2%. They pass the ratio percentage test with the plans aggregated (as well as on a control group basis). Do I need to do benefit rights and features for the different rates of match? Do I need to do it for any other plan features that may be different?

Thank You

Currently the TPA's plan document legal fees are being paid separately by plan sponsors - with some of these legal fees being paid by the plan (non-elective plan doc work) - so they are disclosed on 408b2, 404a5 disclosures...

If a TPA is looking to provide this service for "free" - how is that handled for 408b2, 404a5 disclosures?

My understanding is that firms cannot 'give away' services - but if there is no fee, how would that be communicated - are others putting "zero" fees into disclosures or would the TPA need to list under services for plan administration (which will maintain a base + per participant charge) the plan document services rolling up there...

No free lunch!

Is anyone aware of a separate RMD table for a 401-k plan that is different from the RMD table for IRA's? Someone is telling me there is a separate table but the IRS website seems to indicate they are the same. Any help is appreciated.

One of the things I wish I had done differently in my career (though I ain't dead yet -- age 55, which means I have quite a ways to go per the IRS life expectancy tables) would have been to establish a relationship with an older man in my field, to whom I could turn for advice on a regular basis... someone to pass along "Here's what I would have done differently..." kinds of tips and guidance.

As I've grown older, I've been surprised at how few younger people understand the benefit of such a relationship. I know I didn't, though I fancy myself to have been a fairly bright young salaryman such that I should have known better.

About a month ago, I said to a personable young employee benefits attorney that I would be happy to hear from him and to pass along information or advice about being a practicing attorney. He sorta smiled, took my card, and hasn't contacted me since. Actually, it's happened twice recently.

Dumb. (Says I, to my younger self.)

Has this been your experience, fellow grey-heads?

As a practical matter, what are companies doing to determine the level of bona fide services for purposes of determining whether an employee that will render some post-termination services has separated from service? If the employee is a typical exempt executive, the HR record might reflect 40 hrs. per week, but the actual services rendered might be more than that. The situation I see is an employee transitioning to a consulting role. We need to determine at the time of separation from service if the 20% threshold is reasonably anticipated to be exceeded. Are companies just using the straight 40 hours and saying that if it is reasonably anticipated that he will render less than 8 hours / week then there is a separation from service and if it is reasonably anticipated that he will render more than 8 hours / week then there is a separation from service? Any formal IRS guidance on this point? - I'm not aware of any. Thanks!

Working on an ADP test and I have 5 employees that terminated on 12/31/2012 and have comp and hours in 2013. It's their last paycheck of 2012 that was paid in 2013. Do I include those participants in the 2013 adp test? I normally do include those participants, but wanted to double check since 3 of them are HCE's and it makes a difference in passing the test. One of them does have deferrals.

Calculating present value of account for SERP termination. I feel like I'm being screwed. Anyone with experience here???

Please respond

I have a plan that was effective in 2012, made a cash contribution in 2013 for 2012 and immediately purchased shares. The cash contribution and shares were allocated to the participants as of 12/31/2012. Now, for 2013 the company made a cash contribution in April of 2014. But the wrinkle is that as of 1/3/2014 the ESOP became leveraged. The client wants to use the contribution made for the 2013 plan year to pay on the loan that was effective 1/3/2014. Can the shares released with the 2013 contribution be allocated as of 12/31/2013???

Hello,

I recently withdrew 30K from one of my IRAs for a short-term cash need. I plan to redeposit the money in the same IRA within 60 days.

I would like to keep doing a series of 60-day loans until later this year when I will have revenue from my business to pay the IRAs back completely. My wife and I have several IRAs between us.

I know there was a recent Tax Court decision that the one-rollover-per-year rule applies per person, not per IRA. Per the following link, the IRS will not start enforcing this until 1/1/2015 at the earliest. http://www.irs.gov/Retirement-Plans/IRA-One-Rollover-Per-Year-Rule So, the Tax Court decision doesn't preclude me from doing a series of 60-day loans as long as I finish in 2014.

But, I am still wondering if there will be any problem with the following set of proposed transactions. I think the answer is No (i.e., it is fine to do this). As I understand the current rules, a single IRA can't initiate more than one rollover (distribute $), nor accept funds from more than one rollover (receive $), in the same calendar year. In the below transaction, each individual IRA distributes $ once and receives $ once.

30K out of IRA A, spend it

By day 60, roll 30K from IRA B into IRA A

By day 120, roll 30K from IRA C into IRA B

By day 180, deposit 30K into IRA C from outside earnings

Series of 60 day loans complete.

Any thoughts/comments are welcome and greatly appreciated. Thank you!

HCE dies while still employed. She has been receiving RMDs equal to 12 times her AB every year. She has a non-spouse beneficiary. Although the document addresses how long the beneficiary can keep the benefit in the plan if the participant dies before her required beginning date, it is silent on what the time frame is if the death occurs after the RBD. This may be advantageous as it can allow the plan administrator maximum flexibility on determining the time frame, and if this is the case, perhaps it would be reasonable to allow 5 years from the date of death. I wasn't able to find much in the law addressing the maximum time permitted in such a situation and wanted to be sure that we wouldn't be running afoul of any regs - would our assumption be reasonable or does anyone know if the benefit can remain in the plan longer than 5 years?

We have also gotten widely varying opinions from actuaries regarding how the lump sum benefit should be calculated. Perhaps the most unsettling one we've been told is that since the plan's normal form is a life annuity, the benefit is deemed to have been annuitized when the RMDs began and now that the participant has died the beneficiary is not entitled to anything, as the "life annuity" benefit has ended. This would be quite disastrous because the participant has a very large benefit. Aside from defining the normal form, the document is silent on whether RMDs count as payment of a life annuity option. I would think that the participant would have to affirmatively elect to receive their benefit as a life annuity for the benefit to be considered totally paid upon death, in contrast to the RMDs being a payment over which she has no control. I am curious to see what members on this board think about this.

Lastly, assuming the beneficiary is still entitled to a distribution, I imagine that the lump sum would be the PV of the vested AB unreduced for the RMDs - is this correct? This is the first time I've had to do such a calc and am a little nervous about it, especially given the large benefit involved. All help is greatly appreciated.

Got this question today:

[New Employee] is a citizen of People's Republic of China but has residency in Washington (state). She receives a US W-2 for her compensation with [plan sponsor].

The plan excludes non-resident aliens... but that's not what she is. So it looks like she is an eligible employee, comes into the plan based on the plan's eligibility requirements, etc. Is there anything I'm overlooking? Thanks.

The client adds in plan roth convesions... then a participant who is 100% vested in all sources elects to convert her entire account balance under the roth conversion rules... if the TPA is doing the recordkeeping in-house - what sources should be set up? -

Should each established pre-tax source then have a corresponding Roth conversion source? - i.e.:

Pre Tax Elective ---> Roth Conversion Elective

Pre Tax Employer PS ----> Roth Conversion PS

Pre Tax Match ----> Roth Conversion Match

or can all sources move into 1 Roth rollover source - I'd think no since you wouldn't want to mix any elective with any employer source regardless of whether it is pre-tax or Roth Conversion...

I have been divorced for a little over a year now. we split all asets, including 401K, and retirement.

A month ago I called Fidelity to find out my retirement numbers ( which is going to be in about 7 years. I happened to see that it has my ex wifes name a spouse.

I called Fildelity to find out why her name was on my retirement account. I ended up talking to thier legal dept.

We both had seperate lawyers, My attorney ask me was it ok if the ex spouse attorney did our QDRO. Understand I didn't even know what a QDRO was/is.... It all sounded cut and dry 50%/50% split

She recieved her share of my 401K which was fine. But I come to find out her attorney added the QPSA and The QSAP which I still don't totally understand.

The company I work for is fully funded which I would have be able to take A lump sum when I reture. with the QPSA and the QSAP I have to take a 50% annuity when I retire, not to mention if I die before retiremennt she recieves my pension, Crazy......

She was already issued her share of my pension, why would I owe her anything when I retire. CAN I HAVE THIS AMENDED??? My whole future retirement plans are surrounded by my lump sume. As well as my two children being my beneficary when I die.

I have no idea why my attorey would tell me she looked at the QDRO and said it looks good to her, so I signed it, is it to late. Please help.

I am seeing another Attorney this week

Thanks

A person was injured on a job, and hasn't worked for Company E for almost 2 years. He has been receiving Workmen's Compensation, but does not qualify for the plan's definition of Disability.

I recall hearing that if a person is on workmen's compensation, he is still an "employee" of that company.

In this case, the employer would not hire this person back even if able to work again.

Can we pay this person out as a terminated employee or does the fact that he is receiving Workmen's Compensation either: A): Prevent payment or B): Complicate the answer as there may be a separate legal status this person has.

Thanks for any opinions.

Craig Schiller

http://www.asppa.org/Portals/2/PDFs/GAC/ASAPs/14-13.pdf

Am I reading this right that if I want to go back to 1997 for my 5500EZ's that I need to scrounge up each form for each year? I would have assumed that I could just enter the respective plan years on a more recent version!

If the answer is "yes" where would I get them? Are they still on the IRS's site?