Coal Company A is a wholly owned subsidiary of Big Electric Company B. For years, Big Electric company B has excluded A from it's retirement plan and company A maintains its own Plan. In 2013, B hired some of the A employees. 1) Do A employees have a distributable event? and 2) would former A employees share in PS which has a last day provision. I'm thinking no and no, but am not completely sure.

401(k) Profit Sharing plan has Money Purchase related rollover dollars in it....

It no longer requires J & S annuity - but the MP rollover piece still retains that requirement from the transferring plan (i.e. the MP) - so you'd require spousal consent... Also, if the 401(k) PS permits in-service at 59 1/2 is the MP rollover piece precluded until either age 62 or the NRA in the plan...

I'm looking up the rules, but not putting my finger on it! Thanks

The following excerpt from the RR indicates further guidance will be forthcoming. As far as I know, there hasn't been additional official guidance, and I just wondered if I had missed anything? Although I find it almost inconceivable that the IRS would require retroactive effect for things like contributions, benefits, nondicrimination testing, controlled group attribution, Key/HC employee status, etc., etc., I'd feel a lot better if I saw it in writing...

The Service intends to issue further guidance on the retroactive application of the Supreme Court’s opinion in Windsor to other employee benefits and employee benefit plans and arrangements. Such guidance will take into account the potential consequences of retroactive application to all taxpayers involved, including the plan sponsor, the plan or arrangement, employers, affected employees and beneficiaries. The Service anticipates that the future guidance will provide sufficient time for plan amendments and any necessary corrections so that the plan and benefits will retain favorable tax treatment for which they otherwise qualify.

An IRS information data request regarding a 401(k) plan asks whether there have been any significant adjustments to compensation or any unreasonable compensation issues with respect to any plan participants. What is the request getting at, and what constitutes a "significant compensation adjustment"?

Calendar year plan terminates 4/30/2014 and had a funding shortfall as of 1/1/2013. Assume assets are not distributed until 2015. MRC for 2013 was $100,000. MRC for 2014 is $50,000.

What are the quarterly installment dates for 2014 and what are the required quarterly amounts?

(Main question: Is this considered a "short plan year" for 430 purposes, and does that mean that $22,500 is due 4/15/14 and 5/15/14?). If not, do the same 4/15, 7/15, 10/15 and 1/15 dates and rules still apply with the quarterly amounts being $11,250?

A church wants its employees to set up personal IRAs and the church, not the employee, will contribute annually to the IRAs. Are employer contibutions to IRAs permitted? Wouldn't the contributions be income to the employee subject to withholding, etc? Thanks.

We were recently hired to replace client's TPA. The client was audited by DOL in 2012 and found to have late deferrals for 2010, 2011 and 2012 which totaled about $80,000. Interest was calculated and deposited to plan in 2013 with DOL approval. Interest due was around $850. DOL gave client letter that case was closed and they would take no further action.

When TPA prepared 2012 5500, they showed the late deferrals on Schedule H. No late deferrals were shown on 2010 or 2011 Forms 5500. The former TPA also filed an extension for the 2012 Form 5330. So, it is now due on 1/31/14. Client has asked us to prepare the Form 5330.

Questions:

Should we just prepare a 2012 Form 5330? Since the interest didn't get paid until 2013, I think that a 2013 Form 5330 is due as well, since the error isn't considered to be fully corrected until 2013.

What about 2010 and 2011? Client doesn't really want to go back and file 5330 for those years and I guess the IRS won't be looking for it, since the 5500s for those years don't show any late deferrals.

Can I exclude Non-Shareholder Physicians who regularly work less than 40 hours per week? It's not an exclusion based on primarily on service so I wasn't sure if this might be an out.

I'm a TPA working with a governmental plan that's been restated on a new individually designed document. Their lawyer is saying the per Rev Proc. 2007-44 they are required to file for a determination letter. I'm not sure if this is greed or ignorance.

Surely no one is required to file for a determination letter are they? Especially governmental plans.

Thanks in advance for clarification.

If an employee's domestic partner participates in the employer's health plan and then the two (employee and domestic partner) marry during the plan year, does the employer consider the employee married for the entire plan year ( and recoup overpaid taxes for benefits paid while a DP) or should the marriage only be honored on a prospective basis for tax purposes (i.e.,tax breaks apply only for the portion of the year during which they were married)? Any citations would be appreciated.

Looking at the 2013 Schedule SE and want to make sure I'm understanding correctly.

We are back to a .5 multiplier on both the SS and Medicare to determine the deduction?

The .596 multiplier on the SS was just 2011 and 2012, correct?

Good Morning,

I have a client who is a more than 5% owner. Back on 12/21/1983 he signed the waiver of RMD until the later of normal retirement age or the year in which he actually retires. This has allowed him to forego RMDs for 2011, 2012 and 2013.

The participant is still employed, but wants to take an in service distribution of his entire account and roll it to an IRA. He will continue to make 401(k) contributions and receive employer contributions.

Question - Does the RMD waiver prevent him from rolling his funds to an IRA? The notice talks about when the payment is made in annual installments over the lifetime of the participant with the balance at his death to his participant. OR since he is still active, and eligible for an in service, can he take his account and roll to the IRA.

In essence he will be rolling over funds that are not adjusted for prior RMDs due to the waiver - Is this ok??

We have the signed waiver, and it was properly and timely executed. Just never saw one before!

I have a dentist with a SARSEP plan. He has a son who is age 21 and works part time on his website and has worked for him for over three years now. Questions:

Must the son come into the plan ?

If he does not make any elective deferrals does it help his father in any way for the ADP test ?

How is this test done with the son and the father ?

For ADP testing purposes is he considered a HCE ?

Is the son counted for the rule that says that 50% of all eligible employees must defer ?

If so and he needs to defer will this hurt his fathers elective contribution percentage.

Many thanks

WE have an old grandfathered SARSEP in which we generously contribute 10% to all eligible employees. We just had an employee become eligible and she asked if she could opt out of our plan including employer contributions. She indicated that having a SEP Plan will have negative consequences on their current retirement savings strategy.

Is it possible for an employee to opt out of SEP in which Employer has contributions to all eligible employees?

I know an employee can opt of 401k but did not know about SARSEP. Employer would like to allow this this as it would save him over $3,000 in contributions.

Thanks.

It doesn't appear that Notice 2013-74 addresses how to code the 1099-R for the new ATRA IRR. I couldn't find it in the 1099-R instructions either. Is there other guidance that I've missed?

We have a participant that is taking an in-service distribution from her 401k designated roth account. She has attained age 59 1/2 and her roth monies have been in the account for 5 years. Is it code Q?

Client's CPA told them their 401k contributions could be passed through a Cafeteria Plan, excluding them from being subject to FICA. This is news to me. CPA provided the attached PDF, which focuses the 401k component on Page 9.

...a cafeteria plan ... can include a profit-sharing or stock bonus plan that has a qualified cash or deferral arrangement under IRC §401(k). Amounts contributed under the employee's election are treated as non-taxable benefits for cafeteria plan purposes. IRC §125(d)(2)(B). After-tax employee contributions under a defined contribution plan subject to the non-discrimination rules of IRC §401(m), are also allowed. Furthermore, employer matching contributions may be made with respect to before-tax or after-tax employee contributions. Prop. Reg. §1.125-2, Q. and A.-4©.

Any additional insight? If passed through a Cafeteria Plan, does that mean the funds are added back to FICA wages? Or does this exemption really exist?

Chapter-14-Cafeteria-Plans-Employee-Fringe-Benefits-and-COBRA.pdf

Corporation Z is owned 50% each by two brothers, A and B. The brothers have decided to end their professional relationship; each brother will take a piece of business (and some employees), and each will have their own company (which might be a corp, or maybe a sole prop). They want to terminate the 401(k) plan, and both expect to start new 401(k) in their respective new entities.

Does this run afoul of the successor employer/plan rules? It seems to be OK, but I could certainly see how this could look like a tax dodge (i.e., a way to get a distributable event). Any thoughts? Thanks.

Plan has a participant who defaulted on their loan (because the plan sponsor forgot to start the repayments, not that that particularly matters). 1099-R has been issued, and we're still accumulating income because there is no distributable event yet. Now the participant wants to take a new loan - the plan sponsor is very inclined to give one to her because they feel this whole situation was their fault.

The plan's loan program only allows one outstanding loan per participant. Does this defaulted loan count as the one loan the participant can have?

Securities laws and required disclosures aside - client is interested in offering election to transfer/invest participant 401(k) funds under the client's ESOP. Does anyone have any knowledge or experience whether the transfer of Roth funds is permitted?

Thanks in advance...