One of our clients has a participant who's home was damaged in Superstorm Sandy. If he is rebuilding his primary residence, does that qualify him to take a residential loan in the plan? In other words, does rebuilding qualify as 'construction of a primary residence'?

first rmd is taken March 2014. Calendar year plan. would that be for tax year 2013 or 2014? Would the participant be issued a 2013 or 2014 1099?

thanks

A number of providers are now using alternative reporting on their Schedule C reports. If alternative reporting is used and assuming all indirect compensation is eligible indirect compensation (and properly disclosed), do I still need to complete Part 1, Line 3 for each source of indirect compensation?

The provider is reporting 31 sources with all information except either the EIN or address of the source so the information is incomplete. If I do have to report this information, I would need to obtain the prospectus for all funds in the plan to get either the EIN or address.

I don't do many of these, so I appreciate the guidance.

There is an article linked to today's Benefitslink newsletter from PlanSponsor magazine that has me scratching my head, "The Cash Balance De-Risking Solution"

It states a number of reasons why using the actual investment return on a cash balance plan is a good idea, and not many, if any, reasons why it might not be a good idea.

But what about the accrued benefit? What happens if the investment return is 15% one year and the next year the sponsor is forced to freeze the plan?. Many documents I've seen say the monthly benefit at NRA is equal to the current account balance projected to NRA using the most recent interest credit. Doesn't that create a huge liability, whether the plan is frozen or not? Not to mention testing problems.

Am I missing something, or is the article?

Can a plan administrator who has a money purchase pension plan subject to QJSA as the normal form of distribution eliminate an optional form of distribution from the plan (i.e., installments). Meaning, if a non-married participant opts out of the annuity as the normal form of distribution, the only two options are lump sum and installments. Can the plan administrator eliminate installments from the plan as an optional form of distribution. Therefore only leaving a non-married participant that opts out of the annuity to only take a lumpsum. Does this violate the anti-cutback rules to eliminate installments?

Will someone please tell me that not even the DOL would be this rash?? There is literally nowhere else for the small plans to go...

http://lawtonrpc.com/lrpcs-weekly-insight-brokerage-account-windows-shutting-in-401k-plans/

What is the likely outcome? Most experts think the DoL will:

• Establish fiduciary guidelines and limitations for offering brokerage account windows;

• Require more notices for plan participants who have access to brokerage account windows;

• Bar their use as the only investment option in a retirement plan; and

Can a plan administrator who has a money purchase pension plan subject to QJSA as the normal form of distribution eliminate an optional form of distribution from the plan (i.e., installments). Meaning, if a non-married participant opts out of the annuity as the normal form of distribution, the only two options are lump sum and installments. Can the plan administrator eliminate installments from the plan as an optional form of distribution. Therefore only leaving a non-married participant that opts out of the annuity to only take a lumpsum. Does this violate the anti-cutback rules to eliminate installments?

This is a "Consent to Extend the Time to Assess Tax on a Trust" Basically the IRS is auditing 2010, is afraid they won't finish their audit in time and wants the taxpayer to extend the statute of limitations for another year.

It says right on the form: "The taxpayer(s) has the right to refuse to extend the period of limitations or limit this extension to a mutually agreed-upon issue(s) or mutually agreed-upon period of time."

Question: Why in the name of all that is logical would a sponsor sign such a form?

Can an employer who has hired a candian resident, who's working in canda and only earning Candian income (no us based income) allow that participant to participate in their 401k plan?

I have a new one partcipant plan (owner and spouse only).

The final regulations confirmed that so-called “one participant plans” are not subject to Section 408(b)(2). Does that mean they are not subject to 404(a)(5) fee disclosure as well? What about PPA periodic notice requirement?

Company A with Plan A is a controlled group with Company B with Plan B. Neither company participates in the other plan. Both plans are 401ks with 3% safe harbors. Company A has 1 HCEE and 20 NHCEES. Company B has 1 HCEE and 300 NHCEES. The coverage ratio for the HCEES is 50% in both plans. Therefore, we need a coverage ratio for the NHCEES of 35% in both plans. Plan A would have 20/320 or 6.25%. Plan B would have 300/320 or 93.75%. Plan A would fail coverage. How do we correct? Thanks for your assistance.

Hello all,

A company buys another company and now owns it 100%. Both companies had plans prior to the acquisition, and the parent company wants to maintain both plans after the acquisition. Both companies have about 70 employees.

I know that for testing purposes, we have 140 people to consider, but what about for audit count purposes? I saw a similar thread from a few years back where the respondents indicated that you can avoid the audit requirement by maintaining two separate plans like this so that neither goes over the 100/120 limit.

If that is correct, can someone please point me to some regs, or even something in the ERISA Outline Book that backs that position? I can't find anything one way or the other.

Thanks!

A participant (in a 401(k) plan) has a foreign address (they moved out of the country, unclear as to whether this was before or after terminating service). We utilize state of residence (for tax withholding), but this is a first.

When a distribution is processed, what tax withholding is necessary? Is the withdrawal subject to US federal taxes? Does the answer vary depending on the county?

We are a small company that is part of a very large PEO. We went with them primarily because of the lower medical premium rates. The PEO is partially self funded and partnered with a major Health Insurer. One employee left and their cobra rate quoted was substantially higher than what he was paying, even after adding in the company contribution. Hypothetically, he was paying $350/mo and our company was contributing $200, but his quoted cobra prem is way above $550 - far beyond the 102% allowed (around $1100). I think it has to do with the fact the the PEO is partially self insured as what we pay in medical is referred to an allocation and blended in with the combined rate for taxes, work comp, unemployment, insurance, etc. We are being told that the major Health insurer the PEO is partnered with is offering an equivalent coverage policy for cobra, despite being more expensive. My first reaction was that this in not in compliance with Cobra. Has anyone dealt with this issue before - cobra rates for self funded (or partially self funded) plans? There seems to be some ambiguity in determining the rates, it can't be that far off. Draper vs. Baker Hughes, Inc doesn't address this 100%, but still seems to point to a uniform rate for cobra recipients.

I have a client who is a sole proprietor & sponsors a Simple IRA. She was unaware that the deadline for her to deposit her 2013 deferral contribution was 1/30/14. She thought she had until her 2013 Schedule C income was determined. If she makes the deposit now can she correct under the IRS VCP? Would an IRS Compliance letter allow my client to take a 2013 deduction for her deferral contributions or can the deduction be taken in the year of correction?

A non-electing church plan erroneously excluded eligible employees and did not allow them to make elective deferrals or receive the match. The correction methods are clear when you have a qualified plan. Would the same corrective measures apply to a church plan and will the IRS accept a VCP application for a church plan?

Thanks for any insights.

Profit sharing plan has an integrated formula. The doctors want to have portions of the contribution deposited during the year so that they can get those funds invested in their brokerage accounts. All employees have brokerage accounts and all employees will receive a portion of their contribution deposited during the year at the same time as the doctors.I am trying to come up with all the potential problems with this arrangement from a compliance standpoint. I understand that this would be a BRF that would need to be tested. How much has to be deposited for the NHCEs compared to the HCEs for this to pass the BRF? I understand the math of the BRF test, but how much would the NHCE have to receive to be considered "benefiting" for testing purposes?

Any thoughts on this issue are appreciated. Thanks. I did search the forum and have been reading the other threads.

A nonresident aliens who was excluded under the terms of a defined benefit plan was inadvertently allowed to participate. Date of hire as a nonresident alien = 10/1/03. Allowed to participate on 1/1/05. Date nonresident employee became a resident = 6/9/11.

Questions:

1, Should eligibility service credited from original date of hire (10/1/03) or from date the employee became a resident (6/9/11)?

2. Is this required to be corrected under an IRS program (only self-correction method I saw was for 401(k) plans using a retroactive amendment. We don't want to bring this participant in early)

3. Other than recalculate the employee's benefit using the correct entry date, what other issues are in involved (i.e. possible over deduction in prior years, funding balances, etc.).

What have other out there done?

Gratzi!

Prior to us taking over a 401k plan, the employer paid the IRS directly from her own funds the 20% withholding amounts that were withheld within the plan from multiple accounts cashed out from the plan one year. Rather than asking why, we just wanna figure out how to reconcile the amount that is now stuck in the plan but does not apparently belong to any participants anymore and would seemingly be reimbursable to the owner. Not comfortable paying this to her but dont really know what to do.

Can anyone tell me if it is necessary to separately track contribution types in a Solo(K)? I'm referring to separately tracking employee deferrals vs. employer profit sharing contributions vs. rollovers from other plans. I'm not referring to Roth vs. regular contributions - which obviously would need to be tracked separately. I am firing up a Solo(K) for myself and am trying to determine if I should hire a TPA to do the administration. I can handle the 5500 reporting, but not sure I want to bother with tracking contribution types on an ongoing basis. I don't believe the 5500 requires reporting which money types are in the plan, other than the breakdown of the current year contribution. Seems to me then that once the money is in the Solo(K) plan it's source shouldn't really matter. Is this a correct assumption?

Thanks for any help!

Matt