Co. A sponsors a safe harbor 401(k) plan using the match to meet safe harbor

Co. B sponsors a safe harbor 401(k) plan using the 3% to meet safe harbor

Co. A purchases Co. B in mid-2013 in a stock purchase. Each company has continued to maintain separate plans. Thye want to merge those plans now & Co. A plan provisions.

Had they done this in 2013 I think we would have been okay under Treas. Reg. §§1.401(k)-3(e)(4). Are we still okay to merge the plans in 2014? We are still in the transition period, so I'm inclined to think it is okay because the plan merger is still due to the business transaction, they just didn't address the plans as quickly as they could have.

Thanks in advance for any guidance.

I've been confusing myself here, and now I'm questioning what I think I know.

Two corporations - A & B. They are a controlled group. Each maintains separate plans. Let's assume deferrals and match only - no employer PS contribution.

1. IF there is no HC eligible for both plans, then the plans can remain separate, and be tested separately for all purposes - coverage, ADP, etc., etc. - Agree/Disagree?

2. IF there is at least 1 HC eligible for both plans, then they can still test separately for coverage. Assuming they pass coverage testing separately, they can also perform separate ADP/ACP testing, BUT, they must take into account the deferrals and match by the HCE's on BOTH plans (due to mandatory aggregation) when performing each separate ADP/ACP test in Plan A and Plan B. Agree/Disagree?

3. Now let's assume in 2 above that the plans cannot pass coverage separately - once aggregated for coverage, they must also be aggregated for ADP/ACP testing. Agree/Disagree?

Other thoughts? I need a vacation...

Would a plan of a CFP (Certified Financial Planner) be covered by the PBGC?

Seems to fit the list in ERISA § 4021(c )(2)(B) but not explicitly.

Any opinions or experiences?

Thank you

Can the owner who just turned 70 1/2 and is awaiting IRS DL use the account balance method to to take RMD?

RBD is 4/15/2015 but I think plan termination and desire to roll to IRA shortly after DL (expected in early 2014) trumps delaying the RBD to 2015.

That is if he's electing a lump sum can he take PVAB of benefit on 12/31/13 divided by applicable divisor to determine 2014 RMD?

edit - never mind for future reference the answer is in T.R. §1.401(a)(9)-(6); Q&A 1 - (d)(1) and (d)(2)

Can we have a negative election applicable to one group of employees, but not applicable to all groups of employees? For example, the plan will say, "if you are a salaried employee, you must elect to defer compensation or no compensation will be deferred. If you are an hourly paid employee, we will automatically defer 3% of your salary unless you elect otherwise."

Are there any issued with this?

I am working on a defined benefit plan with a doctor and three staff people. The doctor's accountant wants to know how much of the 2013 contribution is attributable to the doctor's benefit. My first thought is to allocate to each participant a percent of the contribution equal to the percent that his/her TNC is of the total TNC. However, there is a funding surplus that wipes out the TNC, so the minimum is $0. Would this allocation method still be appropriate? Is there an alternate allocation method?

Any help would be appreciated!

A few years ago, some small-business employers - in an effort to make health coverage less expensive - used a design of increased deductibles and other cost-sharing provisions of a group health insurance contract, coupled with a self-funded health-reimbursement plan that covered the difference in the deductibles and cost-sharing. Those who advocated this design asserted that the employer's expense under the health-reimbursement plan would be less than the incremental premium attributable to having foregone the lower deductibles and cost-sharing.

After the Affordable Care Act and other law changes, is such a design still permitted?

If not, which statute or rule precludes it?

Does the analysis vary with the size of the employer (for example, more or less than 50 employees)?

If such a design can continue, is a plan-document revision needed to sustain the design's compliance with relevant law?

Does one need to be employed to set up a health savings account? I have taxable income every year and purchase my own health insurance with additional medical expenses. If I can set an account up, who would I see to do so? Thank you!

What plan year is a contribution attributable to and whether it's based on the dates the money was earned or based on the date of the paycheck.

It is my understanding that 414(s) compensation would include auto expense reimbursements and cobra reimbursements which are includable as income on the W-2? Am I correct on that.

Having a little discussion with a plan sponsor; I guess their prior providers told them that such expenses did not count as compensation even though reported on the W-2.

Thanks in advance for any guidance.

We are the advisor two a couple of plans maintained by a controlled group. One of the companies gives a match, the other does not. The bundled record keeper has tested it each year, demonstrating that the two companies pass coverage separately, and preparing separate ADP/ACP tests.

The employer is nearly frantic because they have now been told (by someone of unknown credibility) that they can no longer do separate testing because they have switched from C corporations to S corporations. I have not been able to find anything to support this contention, but wondered if I've simply overlooked it.

Have a plan with 90 day eligibility for deferrals. Entry date is the first of the quarter next following. (no exclusions)

Plan has match and profit share with allocation conditions of age 21, 1000 hours, last day. Plan excludes keys from TH minimums.

One of the partner's children has worked there continuously since 2009. Entered the plan as of 04/01/2010.

Did not work over 1000 hours in 2009 ,2010, 2011 or 2012 but is age 21. Was excluded from the TH minimum in those years due to status as "key". Works over 1000 hours in 2013 and is employed on 12/31/2013.

I believe this participant gets a full profit share allocation and match for 2013 because the requirements for allocation have been met. I have one of the large vendor administration teams telling me that she won't get PS and match until 2014.

agree or disagree?

individual has his own 401k plan for his company. only employee.

he is in a SEP, total unrelated company, no ownership.

he receives the maximum in the plan (e.g. 51,000)

as I recall, annual additions are separate for unrelated companies, so he could still put in a contribution for himself in the 401k, but my brain is on a freeze, so just want to verify.

Employer mistakenly allowed someone to defer prior to entry date. (Allowed as of 7/1/2013, when should have been 1/1/2014).

So, correction will be to amend plan to retroactively change eligibility/entry for this person, as permitted under Rev. Proc. 2013-12. This change will apply to one person only.

Is a SMM required to be given to all participants? A strict reading would seem to be yes, yet it seems ridiculous in that it cannot possibly apply to any other employee. Although 2520.104b-4© allows a dispensation for Retiress, separated participants, and benefficiaries, it doesn't address the situation at hand.

Would you give a SMM to everyone?

In a small cash balance plan (a DB/DC combo design to minimize employee benefit costs), suppose that the plan's interest rate credit is written to provide for the NHCEs the greater of the 3rd segment rate under MAP21 or the 30-year treasury rate. Then, for the HCEs, it provides the lesser of the 3rd segment rate under MAP21 or the 30-year treasury rate.

Perhaps define the actuarial equivalence as a fixed rate (for purposes of this discussion).

Problems? The HCE benefits would grow less quickly than the NHCE benefits. Of course this helps with 401(a)(26) and 401(a)(4).

Has anyone attempted this?

Has anyone attempted this and received a D letter?

Has anyone attempted this, been audited, and survived the audit?

This question is about a couple who operate a farm. The husband has been reporting as a self-employed farmer for several years with an established SEP plan. Four years ago, the couple elected to treat the business as a qualified joint venture, reporting the revenue and income on two Schedule F's, one for each spouse. Prior to the election, everything was reported in the husband's name.

The farm has reported a loss for the past three years, but this year it has a profit. The husband and wife would both like to make a contribution to their SEP plan (as well as for other qualifying employees). However, the wife has only reported the farm on a separate Schedule F in her name for four years, and the farm had a loss for three of those years.

The question is whether the wife meets the eligibility requirements for a SEP contribution since she did not have positive earnings from the business for three of the last five years. Does a year with a loss count as a year of service for an owner for eligibility purposes?

Have a takeover plan that has 1000 hour, last day, except disability(total and permanent), death, NRD.

Profit Sharing.

I want to remove disability from the restated plan as sometimes you don't find out right away that it is total and permanent.

Also NRD. We don't have in any of our plans, does this mean only in the year they retire they would get a contribution, or if a participant has the met eligibility for the plan, once they reach NRD age, they are always eligible to receive an allocation ? A Person goes to PT( under 1000) hours, would they get a contribution for each of the years after turning 65, or only in the year they actually retire.

Any problem removing this upon restatement?

Thanks

P

I recently heard that a 501©(3) org can sponsor both an ERISA 403(b) and a 401(a) plan and get a double 415 limit ($52,000 ER contribution to each plan for a single employee), sounds too good to be true?

I know if the plans allow elective deferrals there's a single 402(g) limit but can I also have a 457(b) for another $17,500 on top of the $104,000 to the 403(b) and 401(a) plans?

Thanks

A plan document limits a Profit Share contribution to the 415 limit. For the 1/1/2013 to 12/31/2013 plan/limitation year, an employee, age 30, defers $15,000 and has a match of $7,500. This employee is limited to a PS of $28,500 – as to not exceed the 415 limit of $51,000.

Another employee, age 55, also defers $15,000 and has a match of $7,500. Would there be an issue if the PS for this employee is $34,000? Yes, it would exceed the 415 limit – but the employee would be able to recharacterize the excess $5,500 to catch-up.

Any problems with this?