I keep reading that fiduciary education, specifically educating plan committee members is the new, important process. I like the idea, but haven't seen any good resources about what should be covered. Can anyone point me to a good source for a starting point?

Who can shed some light on a supplemental QUARTERLY statement requirement under Sec 508 of the 2006 PPA.

When it is it required if the plan is say with John Hancock.

I have a plan with a beginning of year valuation date of 12/31 that uses calendar year pay for the year ending on the 12/31 valuation date - 12/31 to 12/30 plan year and 1/1 to 12/31 compensation year. Let's use a 12/31/2013 to 12/30/2014 plan year and a 1/1/2013 to 12/31/2013 compensation year for example. Several participants have compensation well in excess of the 401(a)(17) limit every year, and I'm confused about which limit to apply.

For reference, 401(a)(17) limits for years beginning:

2014 - 260,000

2013 - 255,000

2012 - 250,000

2011 - 245,000

2010 - 245,000

The plan uses a high 3-year average. To calculate average pay to determine the 12/31/2013 accrued benefit, should I look to the plan year that ended on 12/30/2013, and then to the compensation year for that plan year, 1/1/2012 to 12/31/2012, and use the limits for 2012, 2011 and 2010 to calculate the average, or should I look at the limit that applies for the current plan year beginning on 12/31/2013 and use the 2013, 2012 and 2011 limits for the average?

I think for the end of year average, I should use 2013, 2012 and 2011, but I'm not sure if I should be using the same average at the beginning and end of the year. I've gotten myself confused and would appreciate some outside input.

We are TPA on an old profit sharing plan that has pooled assets with Schwab. The plan made several distributions in 2013. The plan trustee didn't want any of the money running through the company bank account, and didn't have a separate bank account for the plan. Schwab was instructed to cut checks to the IRS and mail them in. The checks were sent with no accompanying explanation or forms, and a note in the memo line that read "f/b/o [participant SSN]".

Any suggestions about how to reflect that on the 1099-R and 945 forms?

Our legal department said that under Obama care we can no longer pay for an EE's COBRA. Is this true? Would you please give me the link with the answer?

There are income limitations for Obama care that is what is making me say this is not true.

Thank you for your help.

One-person DB Plan. In 2012 the participant defaulted on a loan, and a 1099-R was issued for the 2012 year. The total loan taken was for $50,000. At the end of 2012 the outstanding balance on the loan was $42,000 because the participant had made some repayments. The 2012 Form 1099-R was issued for the full amount of $50,000 showing the entire amount as taxable. In 2013 the participant took a cash distribution of the remaining balance in the Plan. The participant had paid back $8,000 of the loan (this was part principle and part interest) into the Plan. My thinking is the amount he repaid created basis in the Plan and he does NOT pay taxes on this again for 2013 when he took the cash withdrawal of the remaining assets. Is this correct? If so, does the principle payments only create basis, or both the principle and interest payments ($8,000 total) create basis?

One of my clients would like to put in 12,000 in deferrals, 5,500 in catch up and 39,000 as a profit sharing. Would that be allowed? I told them no, and then they wanted to see where that was written in stone. I couldn't find anything that specifically said that. Anyone know?

How is severance pay handled under 415 regulations and for purposes of plan compensation if it is paid before the employee officially terminates? I have recently seen a pre-approved document that allows severance pay if paid prior to the time the employee terminates, for example on his last day, CAN be included unless the plan excludes it?

I was under the impression that ANY severance pay was not plan compensation eligible?

Any thoughts!

Sponsor of 2 defined benefit plans is assessing possible request of funding waivers for both plans. The material facts about business hardship are identical for each waiver request, and I'm sure the requests will be resolved in a single ruling (e.g., PLR 201229015). So, it makes sense for the IRS to charge just one user fee.

However, Rev Proc 2004-15 does not address the issue, Rev Proc 2014-8 does list a waiver (singular) at $14,500, and I would not necessarily describe the waivers a part of "only one transaction" as per 8.03 of 2014-8.

Any thoughts or experiences? Would like to be able to confidently describe relevant costs to sponsor before we start down this path.

Thanks in advance

Would either participant be included the adp test?

1 - An [eligible] participant is now terminated, but listed with no compensation (or hours).

2 - An [eligible] participant is "still on the books" and only works as needed, so they have no real term date, but is listed with no compensation (or hours).

I have an employe who has worked for a company for 4 years. However, he never worked 1000 hours in any of those years. For the 2013 plan year he worked 1000 hours and is now eligible. The plan's entry dates are 1/1 and 7/1. Which entry date do I use for him? Does he come in 7/1/2013 since that is when he met 1000 hours or would it be 1/1/2014?

Plan permits entry after 1 month of service - no age requirement - entry dates are 1st of each month

I'm using the carve out method to do 401k testing - removing all those not meeting statutory eligibility

Through an asset sale effective 12/31/12 - the plan sponsor acquired an entity - it has a couple hundred employees many who have been with the entity for many years

The employees of the acquired entity are eligible to participate in the purchasing employers 401k plan effective 1/1/13

The plan sponsor wishes to recognize service with the prior employer for vesting

Question - can I carve these people out of the ADP test since they became employees 12/31/12 despite the employer permitting them entry at 1/1/13 and giving vesting service?.

Thanks

Hi there.

I have a 1099-R that has been completed to show a Rollover distribution.

Box 1 has been completed with the total amount of the rollover, Box 2a has been completed to show $0.00 as the taxable amount, and Box 7 has been completed with Code G.

Now I need a tie-breaker.

The form has also had Box 13 completed to show the state and Box 14 completed to show the total amount of the rollover distribution. Box 12 does not have any amount entered.

The instructions for Boxes 12-17 seem pretty vague.

If 13 and 14 are completed, but no amount is shown as being withheld in 12, will the state think they are owed money? I would rather leave all these boxes blank since it was not a taxable distribution.

Thank you very much! Happy tax season to all.

In a SEP plan (5305 SEP) that excludes union employees and has a one year service requirement, if an employee changes to non-union mid-year, is he ineligible for a contribution until the next year?

I believe this is ok, but wanted to see if I am missing anything. Company A has a 403(b). A new company B is formed and started a new 403(b) Plan. That new plan is identical to company A's Plan. About 100 people are leaving company A to work for company B. There are no other employees. The two companies are not a control group. Can they transfer the assets for the affected participants from A to B?

Participant turned 70.5 in 2012 and commenced rmd on 4/1 /2013 for 100%j&s amount with cola increasing at 4.75% as annual annuity(not monthly). Need.to make adjustment for 2013 accrual. Benefit at 12/31/2012 was AE of NRA amount(formula late accruals are much smaller).

At 12/31/2013 i compute plan benefit as AE of NRA benefit. Next subtract similar amount as of 12/31/2012. Then compute 12/31/2013 AE annuity of benefit paid during 2013(since no risk of forfeiture accumulate payment with interest only before annuitizing). Subtract this piece to get my life annuity additional accrual. Turn this into 100% j&s annuity and add to 1st year payment increased at 4.75% to get my year two annual payment amount. Does this sound correct?

Client terminated their plan effective with 2012 PYE of 8/31/13. The 5500 needs to be amended as they apparently had a bond and "no" was checked to this question. Can we still file using the 2012 form, or do we need to use the 2013 form? I still have to file their final for 2013, as they have liquidated all assets at this point.

Husband and wife each have 50% ownership in their own companies. The other 50% of her company is owned by a friend and the other 50% of his company is owned by his brother. Due to the couple's minor children, they can't rely on the spousal exception. So, the 80% test is satisfied because it looks like husband and wife own a total of 100% of each company. But the identical ownership (50%) test also adds up to 100%. I feel like there's double attribution going on here -- or maybe the fact that neither has effective control (voting power) in the other's company that makes me think that the 50% test is not met. Is my intuition steering me in the right direction, or am I grasping at straws and just need to face facts?

We took over a cash balance plan in October, 2010. The prior actuary had converted the plan from traditional DB to Cash Balance. The amendment was effective January 1, 2009 but the Resolution was not signed until January, 2010. The actuary did have the plan sponsor sign a form he called "Election of Plan Amendment Effective Date" which basically stated that the amendment was effective for 412. Can this be done? It seems to me this was a discretionary amendment that was adopted late. What are the ramifications of this late adoption? I was going to file the Cycle C document for a determination letter (on cycle) and I want to be sure I've covered all the possibilities.

I have a DC plan that defines compensation as regular compensation, EXCLUDING overtime and commissions. The plan fails the 414(s) compensation test. As a result, I go back and INCLUDE overtime and commissions in covered compensation. Do I also have to go back and now include the additional HOURS that are represented by this additional compensation for purposes of computing eligibility and vesting?