Hi all. I recently posted under "Operating a Consulting or TPA Business", but I am still a little nervous about my new venture. Long story short: I have been a Qualified Plan DC TPA for almost 16 years, and love it, but need to increase my income. Someone approached me about needing someone to simply manage insurance premium payments and that little acorn has morphed into a full blown oak tree.... adding cafeteria plan admin to my existing menu of services.

Is there ANYONE out there, maybe in the Pacific Northwest that would be willing to be an occasional 'mentor' to me? I say Pac NW b/c I'm in the SE and don't want this to be misconstrued as price fixing or client-stealing or ANYthing nefarious. I just need some reassurance that I'm on the right path, some guidance on marketing my services, and some pointers on education. I don't like reinventing the wheel. And I am willing to pay for your time!

Thanks, and I hope this isn't too far fetched of an idea, but I'm ready to get this thing going, I just wanna know I'm going in the right direction!!

Thank you!!

A participant requests an in-service distribution from her 401k plan. The distribution is processed. The participant subsequently changes her mind. Can the participant do a in indirect rollover back to the originating qualified plan? (still within the 60 day time frame) If so, does the participant have to pay back the taxes to make the rollover whole?

Is it possible to invest in a life insurance policy on a participant within a cash balance plan with the plan's death benefit being defined as the PVAB? So the insurance policy is basically just an investment of the trust, not a vehicle for providing a death benefit.

I guess the real question is, do the incidental benefit rules on insurance not apply if the plan's death benefit is just the PVAB?

I know this seems silly (why would you pay for a death benefit that you couldn't have), but I was asked the question, and I can't seem to find anything in writing that addresses the topic.

I was told that you can't buy life insurance that provides a benefit in excess of the plan's defined death benefit, but again, I couldn't find that in the regs either.

Any thoughts anyone? Thanks!

Facts:

Partnership of Doctors - not entirely clear on how they are partners but each has his / her own SEP.

There are 2-3 individuals considered to be "shared staff." They are paid by the 'parntership.'

In 2013, the shared staff went from being paid by 1099 to W-2.

1) Can the docs continue to maintain their individual SEP's - I believe the answer here is no.

2) Do the shared staff people need to be covered - the answer would be YES

Could they establish a new SEP that covers all the docs in the partnership and the staff? If they are a partnership in the literal sense, they could not have a SEP - only an employer and not a partnership can set up a SEP.

SEP is murky for me - I'd think a straightforward profit sharing plan would make more sense all the way around.

I have been looking at some articles lately, including examples provided by McKay Hochman, Derrin Watson and others that talk about the spousal exception (relating to attribution under the controlled group rules) not being applicable when the couple has a minor child because ownership is attributed to the child and that messes everything up. There are comments about that being the letter of the law, but not necessarily the intention. I have to believe that there must be a pretty large number of couples where each spouse owns his/her own (separate) business and they have at least one child. However, I haven't seen any write-ups about the controlled group status being enforced, and I'm pretty sure it's not because they are following the rules (yes, I'm a cynic). Has anyone heard the IRS make any informal comments about this, or has anyone seen it enforced? Or is this one of those things that's quietly swept under the rug and nobody talks about it?

One of our clients is going through a divorce, and I had recommended a QDRO be drafted by a local firm. The QDRO was drafted and sent to us for review. The QDRO had my firm as the Plan Administrator. I called the preparer and asked them to correctly enumerate the Plan Administrator as the Employer. I was sent a new draft and will still down as the Plan Administrator and had them redo.

This was the last I heard of the issue, until last Friday when we were served with the QDRO papers as filed in the court. Needless to say, my firm had been incorrectly listed as the Plan Administrator. Upon receipt, I called the opposing attorney as well as the QDRO preparer.

It appears as though the investment broker is related to the wife, and he is not knowledgeable on pension matters and he is the one who told the parties that we are the Plan Administrator.

Has anyone else run into a similar circumstance and how was this handled.

Having been a pension professional for over 30 years, I am finding it more difficult to deal with incompetent people.

I have a plan that excludes comp for employer provided health coverage, commissions and incentives for all purposes. For match, it also excludes bonuses. Compensation is from date of entry. Deferral entry is first of month following 90 days. Match entry is first of month following 1 year of service. It is possible to have some participants with 2 different date of entry compensation amounts for one year.

I have been running the ADP/ACP testing using 415 pay for the full year. Most of my newly eligible participants are statutorily disaggregated the first year. When I started doing this I had found references that said I could test using full year/415 comp. Now I'm not finding that information. Am I still okay?

Next, when I run the Compensation Ratio test, which compensation do I use for my mid-year entrants? Am I testing date of entry plan pay against full year 415 pay? Or do I test date of entry plan pay against date of entry 415 pay? Or can I test full year plan pay against full year 415 pay? Again, most of my mid year entrants can be disaggregated but I do have a few newly match eligible that are in my test and I'm not sure what compensation I'm testing.

We took over administration this year for a safe harbor match plan. While doing the 2013 plan administration, we discovered that the company has contributed a match of 100% on the first 3% deferred for at least 2011, 2012 and 2013 (this is all the infomation we have). Nothing more! Apparently, this is what their account told them to do, and the TPA disn't question it. The 2013 contribution will be made correctly. My question involves 2011-2012. The plan has 2 HCEs (both owners) and 5 NHCEs. Based on my research, there are two solutions:

1) Deposit the missing contributions for all employees, including the owner/HCEs, plus earnings. This involves approximately $22,000. Since the two owners get most of it, this may be the solution they choose.

2) Deposit the missing contributions to only the NHCEs plus earnings. This involves about $2,000.

The plan document does not exclude owners/HCEs from the match contribution, so, technically, #2 is a violation of the plan document. However, since the discrimination/failure involves only the owners/HCEs, what risk does this solution present? Your thoughts are welcome.

Company A maintans a plan subject to QDIA requirements. Company B is a subsidiary of Company A and participates in the Company A Plan. In 2014, a QSLOB election applies for Company B and there will be a spin-off from the Company A Plan to a new Company B Plan (to be effective March 1, 2014). Investments, including the default fund, will be identical in the Company A and Company B Plans. Company A distributed its annual QDIA notice in late 2013.

Of course a new notice for Company B must be prepared to distribute to new employees. Is Company B Plan required to distribute a new notice to partcipants who will be transferring to the Company B Plan as a result of the spin-off?

Company A has a 401k plan and ESOP.

Currently run by owner A. He has a Son B and a manager C.

Owner A wanted to institute an employee retention program to ensure Son B and Manager C stay with the company. The were each given 10% of stock in 2013. However the stock is vested out over 5 years.

The owner wanted to know what counts for HCE determination. Do we caount the stock in their name or only the part that is released to them (pro rated share). That would make a difference at least in Manager C rather he be a 10% owner (and a HCE) or a 2% owner (and potentially not a HCE as his comp is only $139k and is not an officer)

Employee's wife and children travel back to the home country each year for 2 months. During their absence, the employee wishes to delete them from all health plans and then add them back on when they return.

Would you consider an extended vacation out of the country by family members, and then the return, to be qualifying events that would allow cafeteria plan election changes?

Thanks!

Is the distribution code used when dealing with 59 1/2 the age when the distribution occurred or is it 59 1/2 during the tax year?

I have a plan that terminated as of 6/30/2013. I'm filing the final 5500 now, but since the FIRE site is down till February, can I file for an extension for the final 8955?

I am doing some research and would greatly appreciate some guidance…

Summary

Two IRA owners want their management company to be owned by their IRAs.

This is a construction management company, and the construction loan requires a personal guarantee.

Generally, an IRA owner cannot guarantee his IRA’s debt. Since

This loan will eventually rollover into a nonrecourse loan.

Question: Is there any exception or provision that would allow the investment, without resulting in a prohibited transaction.

I am doing some research and would appreciate some guidance.

Summary

Two IRA owners want their management company to be owned by their IRAs.

This is a construction management company, and the construction loan requires a personal guarantee.

This loan will eventually rollover into a nonrecourse loan.

Generally, an IRA owner cannot guarantee his IRA’s debt.

Question: Is there any exception or provision that would allow the investment, without resulting in a prohibited transaction.

Prior to PPA, you used to calculate a lump sum using the same method as actuarial equivalence, 1.417(e)-1(d)(1). So if actuarial equivalence had no pre-retirement mortality, you would use interest only for lump sum determination as well. But did PPA change this to always use pre-retirement mortality? Reading through PPA, it seems to not fully address this. What is being done in practice?

This is a doosey of a question...

Our church had a 403b annuity account set up many years ago. Two pastors were part of the plan. We hired a new pastor and no matter how many times we filled out the paperwork (long crazy story) he never successfully got added to the plan. Eight years went by and we finally decieded that we needed a new vendor.

We have set up a new account with Vanguard and all three pastors are in the plan and we have made our first contribution this January!

Problem solved, partially....

We would like to restore the employer contribuiotn for all eight years to the pastor that should have been in the plan. We are working on the final amount but it is approximatly $5,000.00 How do we pay him back properly? Our plan allows for a fixed employer contribution of $50/month for qualified employees. It also allows for employee contributions through a salary reduction agreement.

Can we simply pay him back as we have funds making extra contributions to his account since the employer contribution was allowed for and should have been paid to him in those previous years? Should we give him a temporary raise and have him add that to his contribution on his salary reduction agreement until the total almount is paid back? Do we need to modify our plan to allow for some kind of special discressionary contributions?

I would love to get some advice on this. Thanks.

We are an organization that offers health insurance to all of our employees, paying all or almost all of the employee only premium options and not contributing very much additional premium for family, children and spousal levels. We also provide $140 a month in HSA employer contribution to the employees who elect our HDP (HSA eligible plan). Essentially, we pass the cost savings of the lower premiums on to our employees through this contribution. The HSA plan is part of our Section 125 plan.

We have one employee who can be much better off financially to obtain a HDP for his wife and himself on his own, directly from an insurance carrier (even considering his premiums will now be post tax). Our HSA administrator will not allow him to participate in our Section 125 HSA payroll deductions and therefore will not allow him to receive the $140 a month in employer HSA contributions. They claim this is because they have no way of confirming his actual eligibility regarding participation in an HSA account.

Our question is whether or not we can make a $140 contribution directly to his HSA account and what the ramifications of that would be. We know that Employer Contributions without a Section 125 Plan are allowable (assuming comparability rules are met, etc.). Having said that, we wonder if, by having a HSA as part of a Section 125 Plan, we are precluded from also have HSA Contributions that do not relate to the Section 125 Plan.

We would make this opportunity available to all employees (all who participate in a different HDP plan would be able to receive the contribution) and in the same monthly amount as those inside the Section 125 Plan (both sides would receive the $140).

It seems silly to force the employee to pick an employee plan with us and an individual spouse plan with the insurance company just so that he can get our $140 a month, something that will happen in this case and cost our company a lot more money.

Any thoughts would be appreciated.

Business owner/HCE is regretting his decision to stop the safe harbor match, realizing how much his deferrals will be limited. He has a calendar year plan and wants to reinstate safe harbor mid-year in 2014, but since it is not a new plan, I don't believe that is allowed. Please correct me if I am wrong here.

Are there any other creative solutions that can be implemented for 2014 that would allow him to maximize his salary deferrals?

Having a hard time finding guidance on if an employer who successfully terminated their plan (Nov. 2013) can now establish a SIMPLE 401k for the owners only now (doctors) and then start a new 401k for all employees once the 12-month waiting period is up. Does the 12 month rule apply to SIMPLE 401ks as well?? Where does it say you can or can't?

Thanks!