Suppose a new individually drafted defined benefit plan was established mid-2013 with a January 1, 2013 plan effective date. Suppose the plan was signed and executed and the plan document was submitted to the IRS with Form 5300 last summer. No contributions made yet, but liabilities for 2013 have accrued.

Now suppose the client calls today and says business has turned so bad that they aren't sure they will even be in business a few months from now and they don't see any possibility for making any plan contributions.

Also suppose the DB document says something like "...if, pursuant to an application for qualification, the IRS should determine that the Plan does not initially qualify as a tax-exempt plan under Code Sections 401..., then if the Plan is a new plan, it shall be void from its inception..."

Since the IRS is still in the review process for this plan's determination letter application, would the IRS accept and even consider a request to them asking that they issue an unfavorable letter on this supposed plan? Has anyone done this? What do you recommend?

Participant takes hardship in September 2013. The employee deferrals are not suspended. What is the best way to self correct? Should we suspend future deferrals or should we return past deferrals as a mistake in fact and then have the client run them through payroll. Or should we return the deferrals and tax them with the 10% early withdrawal. The confusing thing is that we span 2 calendar years.

Thank you!

Are people using cloud computing services or maintaing their own computer/servers etc.?

Is anyone worried about the exposure to hacking/ lost data etc. with information held in the cloud?

A multiple employer plan we administer allows for loans. When one of the members of the MEP ceases its arrangement with the PEO and ultimately stops making contributions to the plan, but does not start up their own individual plan - what happens to the employees that may have outstanding loans? The loan payments have ceased being deducted from the participant's pay as a result of the fact that the PEO is no longer handling payroll for the employer. But, the employee is still an active employee of the employer, so in that sense, a default isn't triggered. But a default will be triggered when the Trust doesn't receive loan payments for a period of 90 days. So, is it as simple as drafting the loan policy to have verbaige for this particular situation allowing the participant to continue to make payments directly to the Trust? Has anyone run into this situation before?

Business is making an unusual allocation. The allocation looks to an outsider to be more or less arbitrary. We have cautioned them extensively on deemed CODA's so let us leave that aside for purposes of this question.

Each employee receiving a unique contribution has a very unique job description. For example, one might be VP Finance and the other is VP Marketing. Another is the receptionist, another a machine operator, and you get the idea.

When all is said and done, my coverage ratio is just 62%. I say "we're using reasonable business classifications and therefore I am permitted to run the average benefits test." I know I can for nondiscrimination/rate groups. My question is regarding coverage.

Appreciate your thoughts!

Is an authorization to release protected health information that has been executed by a participant/patient itself protected health information that is subject to the privacy rules?

Have my application in for the CPC credential, and was wondering what if any benefits the ERPA designation would give me? Also,very much looking to pursue becoming an Enrolled Actuary. Not, looking forward to having to do more test though .

been awhile since I posted this one

this report takes a summary of account and makes it look like a 5500SF

since I use used defined fields to track suspense account there might be some data on this report that you wouldn't apply for your usage, but the basic report should work.

you might have to modify distributions if some are corrective distributions

and of course no guarantees on anything, but I haven't encountered many problems with it. maybe if forfeitures reduce contributions, but what the heck, if it helps...

5500 SF.rpt

If an employee terminates employment in October 2013, are they still able to use the 1/1-3/15/14 grace period for the 2013 plan year, or does their "grace period" begin the day they terminate?

Thank you,

-John

I have searched prior posts and cannot find a reference to this specific situation. Thanks in advance.

An employee terminates on October 1, 2013. Terminated employee receives severance pay. Severance pay is not for services rendered, not for time off or sick leave, would not have been paid if the employee were still employed and not included in the 2 ½ month inclusion rules. Severance pay beyond this is not includible in the definition of compensation.

The severance is paid from October 1, 2013 through March 1, 2014. The terminated employee defers and receives the match during this time period.

Question: The match and the deferrals will need to be removed from the participants account. Do the 2013 ineligible deferrals need to be paid on a revised 2013 W2? Or can you pay out the deferral to the employee with a 2014 1099 or 2014 W2? How do you correct this?

Thank you

I have a Daily Valulation platform 401(k) plan that imposes a 10% deferral limit to HCEs. They have two HCE employees who exceeded this limit in the 2013 plan year.

#1 - Should these excesses be processed and 1099'd like a 402g violation?

(Process by 4/15/14; excess amount taxable in year deferred and 1099'd with tax code P; applicable gain taxable in year distributed and 1099'd with tax code 8)

or

#2 - Should this excess be processed as an EPCRS type correction? (process the excess amount adjusted for gain loss and report the total with tax code E.)

The information I have found in the ERISA outlines and the 1099 instructions seem to lean toward #2 but wanted to see if anyone can provide definitive guidance.

Thank you.

Plan A had late 401(k) contributions and reported the late contributions on Form 5500. Before Form 5330 could be filed, Plan A merged into Plan B. For Form 5500 and Form 5330 purposes, are the late contributions now reported on the Form 5500 for Plan B, and the Form 5330 filed by Plan B to report the correction?

The company in question acquired another company that sponsors a 401(k) plan with a 3% nonelective contribution. The Safe Harbor plan is not being terminated, but rather merged into the existing 401(k) plan. Participants are eligible to participate as of 4/1/14, but the assets have not merged yet.

Do we have to wait until the end of the plan year (2014 calendar year) before merging 401(k) assets?

If not, can we suspend the Safe Harbor contributions mid-year? Are we responsible for paying out 1/1 through 3/31 or the first two quarters of the year? Is there a notice requirement to the participants announcing that the contribution is being suspended?

Thank you for your help!

May a traditional IRA be used for the stated purpose?

Client has an individially designed plan (happens to be an ESOP) that was prepared by Sungard/Corbel in response to a checklist we submitted. The plan provides that in order to receive an allocation for a given year, a participant must be "actively employed on the last day of the year." I can't imagine that someone who is away from work and on long-term disability could be "actively" employed on the last day of the year.

Am I missing something here?

Active grandmother with original teeth seeking a dedicated flosser to share rare steaks, corn on the cob and caramel candy.

Plan Sponsor recvd EBSA ltr to file VFCP for late 401k as reported on 2011 5500. When I looked at 5500, delinquent amount reported includes only 401k, not loan pymts which were paid simultaneously. Considering correction approaches:

option 1: file vfcp based on reported amount of 401k

option 2: amend 5500 to add delinquent loan pymt amts and incorporate that into vfcp

thoughts much appreciated .

Company A sponsors the Company A 401k Plan. Through common ownership (but not enough for a controlled group) Company B adopts the Plan and it is now a Multiple Employer Plan. There is an unsigned joinder agreement we inherited from a prior provider.

Company A want to move to a PEO. They want to leave the Plan in place for Company B to take over as the Sponsor. So a new Sponsor Name, EIN and Plan Name must be done via amendment. If I really wanted to be clean, I could create a whole new set of plan documents. Company B doesn’t want to terminate the plan (and create a distributable event) as they want all assets to remain in the plan.

They want this change effective 4/1/14.

What amendments did you think should be done to facilitate this change? What changes should be done on the 2014 5500? If I do new documents, what nuances can you think of? Any other advice? Thanks.

Suppose a corporation has a profit sharing plan and a fiscal year that ends on 12/31/13. If the employer sends a check by mail on 3/15/14 for a 2013 contribution (2013 corporate return is not extended), is the contribution considered deposited in time to be taken as a deduction for 2013?

A 401(k) Safe Harbor Plan has a Basic Safe Harbor Match to be calculated each payroll period and the plan compensation to be considered is wages, tips and other compensation on Form W-2 including salary deferrals. The employer contributes the match to the plan on a quarterly basis. At year end the employer uses each participant's W-2 Box 5 annual compensation to compute the safe harbor match amount for the plan year then he contributes the final quarter safe harbor match based on the W-2 box 5 compensation for the year. Is there anything in this scenario that would be in conflict with the plan's match and/or compensation specifications?