The Final rules came out on February 14, 2014. Does anyone know how the measurement period would work for a plan that has a September 30th plan date? I noticed in the regulations that the measurement period can not start later then July 1, 2014. However, the measurement period can not be longer then 12 months and the administrative period has to be less than 90 days. Please help.

I believe that a plan that covers employees is generally called an ERISA plan and is safe from creditors.

Can anyone point me to where that is explained in regs?

Thanks

A HCE took a full distribution from the 401(k) plan on 11/20/2013 and continued to work. He rolled all of these funds to an IRA> He resumed making deferrals to the 401(k) in January of 2014.

He is due a ADP refund from the failed 2013 test. Would it be okay to refund his 2014 deferrals to correct the failure? Or will the IRS deem a portion of his rollover ineligible, meaning that the refund amount should come from the IRA?

Can a small profit sharing plan that otherwise meets the requirements for filing a Form 5500-SF but has a life insurance policies file a 5500-SF? Do the policies qualify as "eligible plan assets" or does that fact that there is insurance in the plan require a Schedule A, thus requiring a 5500?

I have a heckuva mess on my hands and need some help sorting out the solution.

Client was sole prop/no employees in 2012, and opened a SEP/IRA with Vanguard in June 2013 (missed the solo 401k setup deadline)

Contributed a total of $32,909 to the SEP in June 2013 for tax year 2012, of which $17,000 was erroneously included as deferred compensation, and is an excess contribution. This mistake was just discovered this week.

Formed S Corp in early 2013, and opened a solo 401k with Vanguard also in June 2013 for 2013 contributions. No employees.

Salary deferrals for 2013 reported on W-2 as 12DD are $17,500, but only $14,318 has been contributed so far. Remaining contributions to be made by April 15 to bring the total employee contributions to $17,500.

Employer contributions to the 401k for 2013 total $14,530.50. There are additional employer contributions accrued on the books, but have not been made yet.

My questions are:

1. Can I get the plan administrator (Vanguard) to return the 2013 employer contributions to the 401k of $14,530.50 without penalty if done so before the tax filing deadline plus extensions?

2. Can I recharacterize or rollover the SEP/IRA excess employer contribution of $17,000 into the 401k plan without triggering penalty or a taxable event, since the SEP/IRA contribution was made in June 2013?

3. I realize I have to file an amended 2012 tax return for the client, but because she was a sole prop in 2012, there are no amended W-2's to deal with.

Any help or advise is greatly appreciated. I am sweating the penalties I will have to pay if this scenerio isn't feasible.

I think there's a way now to terminate am ERISA 403(b) plan invested in individual annuity contracts (something about assigning the contracts to the participants).

Questions:

1. Does the vendor/insured have to "agree" with the assignment or can the employer make the assignment unilaterally (just send the vendor the assignment and file a final 5500 showing all assets distributed)?

2. Anybody had any experience they're willing to share on doing this with TIAA-CREF?

Thanks

The Internal Revenue Service does not have a determinations program (except for its recent prototype program) for 403(b) plans.

In the 1980s and 1990s, some charitable organizations obtained letter rulings that were, in practical effect, similar to a determination on the form of the employer's plan document.

Is that still possible? For an employer that does not want to use a prototype document, can one request a letter ruling that contributions made under the plan stated by the document submitted would get the Federal income tax treatment of IRC section 403(b)?

Can anyone recommend a good training program/courses for cafteria plan administration? Something similar to programs that ASPPA & NIPA have for retirement plans.

Thank you in advance for any guidance.

Hope you can help a debate we are having . . . .

As a participant ages and would fall into different target date funds, does all of his money move into the current appropriate fund?

Or does the "old" money stay where it is and only the "new" money goes into the "updated fund?"

It would make sense that all of a participant's money would be in the same current appropriate fund based on age.

Even if the target date fund is elected rather than a default, would the funds move based on attained age?

Thanks!

Hi, All:

I need a sanity check, please. I have a 401(k) which failed their 2013 ADP test. They've chosen to make a QNEC to correct the test. They plan to make the QNEC deposit when they make a PS deposit (prior to their business filing deadline). My questions:

1. Should the QNEC be included as an employer contribution in the Maximum Employer Contribution Deductibility test?

2. Where can I find this in the regs?

Many thanks!

PuffMama

Just notified that plan was terminated as of 10/1/2013. Company has recently been doing very well. Why would employer terminate ESOP plan? Greed? ( I'm sure it is financial.)

Fairly small company, less than 100 employees. Maybe 20 % of the 100 are fully vested. Vesting is vary "top-heavy", if that matters.

Still offering 401k plan.

Thanks for any input.

Running across situations with cash balance plans having less than 40% of participants accruing a benefit for 2013 less than .5% of compensation because of the use of low interest rates such as 30 year treasuries.

How are others handling this? Amending, ignoring?

Opinions please.

When the plan defines compensation as W-2 comp, the payroll division of our company is including everything that goes on a W-2 in the contribution deposits that they make for the clients. Unfortunately, that includes the taxable company paid health insurance premiums that are added to the taxable compensation for the greater than 2% shareholders of S corporations. They are now asking me for proof that it is not supposed to be included, and I'm having trouble finding it. Where should I be looking?

Profit Sharing plan's trust is in a pooled account.

Balance forward valuation.

Plan Sponsor now wants to take plan expenses from the trust. The expenses are justified and eligible to be paid from the assets.

What kind of notification (if any) is due to the participants?

We had a client fail to file a PBGC form, and apparently received notices for a while that they ignored, and now have received a bill for $45,000 in penalties! The plan had one participant and less than that amount in assets! Is there any way to get relief after they've already sent the penalty invoice with threat to refer the debt to the Treasury by the end of the month?

If a plan was started in 2013, no past-service is credited, and the beginning of year assets are $0, is the 2013 AFTAP 0% or 100%? Is there official guidance on this? Would it make a difference if the valuation date was 12/31/2013?

Thanks!

We had a call from a terminated participant that elected to take his distribution from a 401k plan in the form of a rollover to an IRA. The check was made payable to his IRA institution fbo participant name and was sent to the institution (per his instructions on the distribution paperwork). This occurred in 2013. The call from the participant came in a couple of days ago and he tells us that the money was not put into the IRA account, but rather into his checking account. We have already prepared the 1099-R with a code G and submitted the info to the IRS (figures he would call the day after we submitted our filing to the IRS). Do we complete a corrected 1099-R to indicate a lump sum cash distribution with no withholding? Does this create an issue for us as the submitter of the withholdings? What is our exposure? Any replies are welcome!

We have a defined benefit plan that wants to terminate. The plan has only allowed lump sum payments of less than $5,000. There are over 100 Retirees who are currently receiving monthly payments from the Plan. The client would like to offer lump sum payments to as many of the Participants as possible. We told them that this is no problem for Actives and Deferred Vested Participants but that we generally advise them to purchase an annuity for the Retiree group.

Is there any regulation that prohibits us from providing the lump sum option to a Retiree? I am especially concerned about the expense of purchasing annuities for elderly Retirees with small monthly benefits. The current lump sum value for several of the Retirees is less than $5,000.

Thanks

If employee participates in 401k with company A for 5 years from 1989 to 1994 and is fully vested in the plan. Then works for company B (which resulted from a merger of company A and 2 other companies) for a period of 3 1/2 years from 2010-2013. company B's plan had 5 year vesting @ 20% / year. Company B claims employee is only 60% vested.

Question: would employee be fully vested due to service with predecessor (company A), or does the 16 year break somehow disqualify the prior service?

A month ago, a participant receives a large participant loan and uses the funds to purchase a principal residence. However, the participant did not apply for the 15-year home loan exception, so the loan was set up with a standard 5-year amortization. Apparently, the participant was unaware of the option, even though it's clearly stated on the loan appication. Anyway, now the participant wants to reduce the monthly payments by switching to a 15-year amortization.

In looking through things, it seems like the only option here (besides telling him "no") would be for the participant to refinance the loan and since the original loan was in fact used for the home purchase, it should be allowable. But I'm not completely sure on this. Any thoughts or concerns?

Thanks.

BTH