I have a client that works for a hospital and is eligible to contribute to their 457(b) plan, and he also works for a federal agency, and is eligible to contribute to the federal governments Thrift Savings Plan. It appears that he can contribute up to the $17,500 limit in both the 457(b) plan AND the Thrift Savings Plan, and is not limited to a single $17,500 between the two plans.

Is that correct? If someone has any definitive proof, please let me know where I can find it for file documentation.

My calendar year defined benefit plan had both common law participants terminate in 2012 and they were paid out lump sums in June 2013. For, the 2013 year, for purposes of applying the combined limits (there is a 401(k) also), is the plan still considered to covered under Title IV? The DB contribution is way over 25% of compensation and I would rather not limit the profit sharing to 6% of compensation.

MEP A spun off single employer plan B eff 1/1/12. PA of Plan B receives QDRO with a date in 2011 as the date of property settlement and stating that earnings will calculated as of a date in 2011.

PA of Plan B has no authority or resources to calculate earnings prior to the plan effective date in 2012. Can Plan B resolve this issue through negotiation with legal counsel for participant and AP or is it a more prudent course of action to reject the QDRO and request a modified order?

We are the TPA advising the PA on the acceptability of the QDRO. Thanks for your comments and perspectives.

I have a profit sharing plan that held mortgages as an investment option. When the plan went daily, the mortgage assets were allocated to the participants. Each quarter the income and principal paid is allocated to the participants. For several years this worked perfect. There is currently $800,00+/- in this account. The Trustees have been informed that the majority of the mortgages are defaulted can worth zip!!

1. The Trustees will pursue legal action with the entity holding the mortgages - The Employer wil pay all costs associated with this legal proceedings. Any issue with this?

2. Trying to avoid a participant riot when they find out the account has been over valued in the past and there will be no future payments.

Should the Partners, take the HNCEs portion of the mortgage pool? They would need to take funds from their core funds and make the NHCEs whole?

3. There are RMDs that need to be issued - some participants only have a mortgage pool account, so with no income and principle coming in, how can they make the RMDs

4. There are some of these are second mortgages, so the only way of getting money would be to pay off the first mortgage. The Plan Sponsor wants to take some of the core funds for those in the mortgage pool pay off the first mortgage, and then collect.

sounds like a &^%*()*#)( mess if you ask me. We will strongly recommend an ERSIA attorney get involved, but I am just looking for some insight on what to do.

thanks

Dr X has an arrangement with Company A in which Dr X pays Co A a Y% of his revenue for staff supplied by Co A.

Co A leases their employees from Company B.

Dr X maintains a 401K and DB plan.

All employees meet the regulation requirements regarding leased employees with the exception of primary control; Co A maintains control of employees. However, the regulations specifically name job functions that satisfy the control test; such as, receptionist, wordprocessing personnel, and nurses. The regulations go on to say that professionals that regularly use their own judgement and discretion in the performance of their services and are guided by professional, legal or industry standards do not satisfy the control test. Dr X utilizes Co A's staff to fulfill both clerical and professional positions.

Should the clerical employees be treated as leased under Dr X's plans? Does the payment arrangement (% of revenue) make this more of an outsourcing arrangement in which all staff are disregarded under Dr X's Plan? Or do we just have a clever attempt at skirting the issue?

Any input is appreciated!

I have a client that fails the ACP test and is required to refund match to two HCEs. One of the HCE is not fully vested in the match contriubution.

How is the refund handled in this case - does he still receive the full refund, or is part of it forfeited?

Client is terminating a DB and 403(b) plan and need a default IRA provider that would accept balances from both plans for participants who do not respond.

Can anybody recommend some providers?

Thank you.

Has anyone reported an actuary to the Actuarial Board for Counseling and Discipline (ABCD)? A friend who is an actuary told me of a DB plan they recently took over where the prior actuary seemed to be ignoring PPA. Sure, they were using the new Schedule SB rather than just the old Schedule B, but they clearly were using any interest rate they wanted, standard calculations were wrong (i.e. shortfall amortization calculations), and they were ignoring new rules such as the annual funding notices and benefit restrictions. When reading The Application of Precept 13 of the Code of Professional Conduct that the American Academy of Actuaries released last December, it appears that this actuary needs to be reported.

My friend is concerned that by doing so, the IRS will audit all of the prior actuary's plans. This could create a problem for his new client. Even though the plan has been cleaned up and is now functioning according to the law, an IRS audit usually creates a headache. So my questions are:

1) has anyone reported another actuary to the ABCD?

2) and if so did it create any problems for your clients?

Thanks.

Background: Daily valued plans, participants statements include all required language as well as fee information and vesting. Quarterly ones are sent electronically but annual participant statements are sent on paper.

Is this the norm? We should know the answer by now..... but our understanding is the only way for us to be able to do the quarterly ones electronically is to at least send the annual ones on paper...just wanted to see what ever one else has been doing.

A 401(k)/PS plan excludes fringe benefits from compensation in the adoption agreement. Employer mentioned that some of the wages reported for employees includes cash in lieu of electing the employer's health insurance (they are covered by spouses' plans). Amounts vary, but are up to $9,000. Deferrals have been withheld from these amounts.

My review of the IRS website and EOB indicate that any pay other than basic compensation for the job (one's salary) is considered a fringe benefit, though I haven't found anything specific for this cash in lieu of insurance. Does anyone have anything specific regarding these types of payments as a fringe benefit?

thank you.

Can a duplicate RMD in a 401(k) that was issued in 2013 be corrected or reversed in 2014? We had an issue where the Participant had taken a RMD in 2013, then the custodian had also issued an RMD in 2013 for the Participant. The custodian is saying that they cannot reverse the duplicate entry because it is now 2014 and the error happened in 2013 and they cannot cross tax years.

Any thoughts or ideas about correcting this? Thanks : )

Company A's has a safe harbor 401(k) profit sharing plan

The plan allows for distribution of account upon the attainment of age 59 1/2 and the safe harbor hardship from all sources of money.

Participant age 60 applies for a hardship for medical expenses not covered by insurance.

I am told by the TPA that since the plan has an In Service Distribution and Hardship, the participant must first take the distribution as an In Service ( subject to the 20% withholding).

I have never heard of this.

Thoughts????

Company A maintains a 401(k) Plan on 9/12/2012 Company A purchased Company B - now we have a controlled group.

Company B maintains a SIMPLE IRA

Since the SIMPLE was not terminated prior to 1/1/2014, it is my understanding the SIMPLE Plan must continue for the entire 2014 Plan Year. Once terminated since the particiapnts have been in the SIMPLE for more than 2 years, they can roll their account balance to the 401(k) Plan.

1. is there an issue that one company has a SIMPLE and one has a 401(k) Plan?

2. Can the employees in Company B stop their SIMPLE IRA contribution, join Company A's 401(k) and defer up to $17,500 ( reduced by the contributions made to the SIMPLE). Then in November of 2014 the Employer will notify employees of Company B the SIMPLE Plan is terminated

The goal of the employer is to get everyone under one plan ( the 401(k)) for 2014.. Any suggestions???

Thanks

I am looking for suggestions from others on how they handle when employees opt out of the Employer provided Health Plan.

Currently at Sinclair, if an employee waives the insurance, they are paid an additional $25.00 per pay. They can either take this as cash award or direct the $25.00 towards a FSA. The current policy is that employees must work the full pay period to receive the $25.00. If an employee is on unpaid leave they do not receive the incentive.

How do you handle their Waiver incentives?

When an employee is on unpaid leave do they receive the incentive?

When the employee returns do you make up the amount the employee would have received?

Thank you,

John

An employee with no ownership age 70.5+ is still working.

Plan allows for in-service distributions.

Participant wants to rollover account to IRA.

Does the participant have to receive RMD before rolling over account. That is does the rollover request trigger an otherwise delayable RMD?

Oh and yes I realize that by rolling over now they will subject funds to RMD in the IRA in future years that might be delayed under plan rules.

Can the plan make a loan to a participant, secured by a mortgage, in excess of 50% of account or $50,000?

I have an indiviudally drafted 403(b) PS Plan that has a 5 year vesting schedule. I have read the document 5 times but no where does it state how to use the Forfeitures? Has anyone come across this?

We have been using the 5500EZ for single participant plans.

We are thinking of using the 5500SF now for these plans. Other than the obvious differences in filing, client's computer savvy etc, is there any compelling reason for using one vs the other?

We have a plan that allows loans but they are restricted to the usual items: Medical bills, tuition, purchase or maintenance of a home.

Should the plan sponsor have written proof about a need (i.e. estimate, etc.) before approving the loan or is the signed statement of the participant good enough?

Thanks

Plan has a 3 year vesting schedule for their match. The match is not available for hardship. Question; Can the admend the plan in 2014 to say that anyone hired prior to 12/31/2011 their match would be considered a QMAC and therefore 100% vested.

I am thinking no since the amendment does not really change any benefit as those participants would be 100% vested at this point. However, if they wanted to 100% vest anyone hire prior to 12/31/2012 that could work since you are actually providing an improved vesting schedule. In the second example, you could then use the match portion for those employees hired prior to 12/31/2012 as a QMAC and then test that portion in the ADP.