A participant erroneously received a check in 2013, which had 401k withholding. The check was canceled, but the 401k contribution and match was submitted to the plan. Therefore the participant now has an extra contribution for 401k deferral and match in their account. Is it best to just move this money to the forfeiture account rather than send it back to the plan?

That is a fact and not an opinion.

http://www.relius.net/News/TechnicalUpdates.aspx?ID=1020

Employer contributes profit sharing contributions during a plan year into a holding account earning a return until the contributions are allocated at year end. If the plan allocates earnings on pre-funded employer contributions as employer contributions instead of ratably across assets, is the allocation an annual addition subject to 415?

I am doing a 2013 valuation for a one-man DB plan. As expected, my valuation system is producing a funding target used for the maximum that is larger than the MAP-21 funding target. However, it is calculating a target normal cost for the the maximum that is LOWER than the MAP-21 target normal cost. How is this possible, if the all of the MAP-21 segment rates are higher than the segment rates used for maximum purposes?

Any thoughts would be appreciated!

I have read the regs and several posts on this board, but I seem to be just confusing myself more, so, at the risk of asking a stupid question, I thought I'd ask a stupid question:

If an employer has 2 401(k) plans and there is no overlap of employees between the plans, can they automatically test each plan separately, or does each plan need to pass 410(b) coverage testing on its own (considering all employees of the employer in the test) in order to test each plan on its own?

I would think that each plan needs to pass 410(b) on its own, but these posts make me think otherwise:

http://benefitslink.com/boards/index.php?/topic/55126-brain-cramp-controlled-group-mandatory-aggregation/?hl=disaggregate#entry240106

http://benefitslink.com/boards/index.php?/topic/54601-adpcoverage-testing-for-control-group/?hl=disaggregate

This seems like a dumb question, but I can't seem to locate the answer clearly anywhere. The buyer purchases a company (Asset Puchase) and subsequently adopts the sellers 401(k) plan. The buyer has a PS plan, but no 401(k). Do the transition rules apply for the 401(k) (i.e. can it proceed with covering only the "new" (seller's) employees for the rest of the plan year? And, then bring in the buyer's "old" employees at the end of the transition period?

Dumb question but if you charge more for smokers and offer a smoking cessation program as an alternative for tobacco users, is the requirement to participate in the smoking cessation program an annual thing for those individuals that do not quit or do you merely have to participate one time such that the following year you get the benefit of the lower rates even if you continue to smoke?

If the later, can you change up or introduce a new smoking cessation program and require individuals to take the new program to reduce the rates?

Any general suggestions as to how one might increase the percentage of non-smokers if increased rates and the smoking cessation program has not worked well?

Two different problems:

1) If you have a newer browser (I know it's a problem right now in IE 11), you might not be able to copy/paste in a message board reply.

The solution is: click in the reply window, then click on the tool icon that looks like a grey light switch, it's the very first one. This will toggle between text and html mode. If you now go up to a post you want to quote, it will now appear in the reply window. Or you can now paste into your reply. You can toggle back to html mode if you want to use the other tools like underline or bold.

2) If you just posted a reply, you might not be able to edit it immediately.

The solution is: I didn't think until just now to first try the tip above (toggle between text and html mode). Otherwise, click "View New Content" in the upper right, find and go to the message thread you just posted in, and now you can edit your reply.

My plan is a LLP and one of the partners has Self Employment Earnings of 151,010.00 before any deductions. he owns 1,20% of the company. When determining if he is a key employee, do I use his self employment earnings which are over 150,000 and would be considered Key or his earned income compensation, which is below the 150,000, which would make him non-key. Not sure if he should be receiving a top heavy minimum contribution.

Forgive me for lots of unnecessary information. I don't pretend to be experienced with these topics. But I need help and I am desperate. I'll try to simplify:

Thirty years of marriage - I am 46

We have 3 daughters - two are twins in college.

I discovered affair and filed for divorce 01/13.

Divorce was final 09/13 along with QDRO.

The QDRO states I will receive 100%. This may seem overly generous, but please know that my ex had an issue with job loyalty. He never worked at a company for more than a couple of years. This last employer was the longest at almost 7 years, and I would receive the earnings (?) of that fund for those years. This is where it gets complicated and tragic for us. Just after receiving spousal support payments in Oct and Nov .. My ex contracted the H1N1 virus at age 47 and after a month long coma - died Jan 19, 2014.

We discovered his life insurance had lapsed. We have only the QDRO. i do not know the value of this account. I have received no communication from his employer (PA). It's a small company, well aware of his death. I emailed the person who prepared the order, who then emailed the PA.. who says she is "waiting for calculations". She hasn't even asked me for a death certificate. Meanwhile, we have only the income I make as a teacher aide ($17k), we are at risk of losing our home of 15 years. I found a statement showing a balance a year ago of $93k. Can anyone please tell me what the time frame is to receive these funds? It was never my intention to do anything with this money other than to roll into an IRA for my own retirement. Now I have no choice but to hopefully pay for house. I have a copy of the "profit sharing plan" which is pooled by the employees. The company is owned by the PA. I can't ask my divorce attorney any questions, I can't even pay him for the divorce now with no income to speak of. He did tell me that the QDRO was complete and out of their hands. How long can the PA sit on the funds? Any direction or advice is greatly appreciated.

Not for Profit Plan

Plan is distribuitng 457 deferal account. Actual deferrals from pay were already taxed for FICA/FUTA when made/

Are the earnings on the deferrals subject to FICA/FUTA or are they somehow exempted?

Thanks

I have a plan where an HCE died in 2013 and during 2013 the account was transferred to his beneficiary's (spouse) account under the plan. When the 2013 ADP test was run in 1/2014, the deceased ptp was due a refund because of the failure of the ADP test. My question is how is this amount distributed and how should the 1099R be coded?

Does the corrective distribution get withdrawn from the beneficiary account and paid to the participant's SSN and taxed accordingly? Or does the corrective distribution get withdrawn from the beneficiary account and paid to the participant's estate and taxed accordingly? Since the beneficiary is his spouse, does the corrective distribution get withdrawn from the beneficiary account and paid directly to the beneficiary and taxed accordingly? Or some other way?

Any help is greatly appreciated.

Is there any reason an employer participating in a multiemployer pension plan couldn't convert its contribution structure to a defined contribution (money purchase) arrangement?

Plan excludes participants who do not elect to make 403(b) deferral of more than $200 for the plan year. There are no exclusions for purposes of employer contributions.

Do you count these excluded employees as $0.00 for the ACP test?

I have gotten two different answers. Yes, because they could have contributed more if they wanted to and No because they were excluded from making deferrals.

Is anyone aware of any guidance on whether missing participants should be counted for PBGC premium purposes? PBGC Reg. 4006.6 defines a participant as an individual with respect to whom the plan has "benefit liabilities."

As permitted by Treasury Reg. 1.411(a)-4(b)(6), the Plan in question provides that if a participant cannot be located, his or her benefit will be forfeited subject to reinstatement if the participant eventually comes forward. Since the participant's benefit is forfeited once he or she is deemed to be missing, I would think the plan no longer has "benefit liabilities" with respect to the participant, and therefore the participant would not be counted for PBGC premium purposes. However, I can see the argument that the liability to the participant never really goes away, because there's always the potential for reinstatement if the participant surfaces. Even under that logic, though, it would seem that the participant would have to be presumed dead at a certain age, so that the premiums don't continue in perpetuity.

Thoughts on this?

I retired from a company that set up a HRA to reinburse me for medical insurance premiums purchased for me and my family through my wifes employer which is tax free. I was told to submit the payroll stub to MY employer and get reinbursed. What are the rules that would not allow this type of reinbursement. I'm not sure if this is s double dip.

My employer failed their ADP/ACP Test for 2013 in our 401K plan. I have been after our owner to Safe Harbor the plan for the past few years, as I've gotten money back each of the last few years due to failed ADP tests, but he doesn't want to put the extra money into the plan to Safe Harbor it. As a result, the past few years I've gotten a check back for excess contributions.

The owner and I are the only HCE's in the organization currently. Most of our organization doesn't contribute at all to our plan (we have about 50 employees total) and those who do invest a small amount.

My employer ended up matching over $10,000 to my 401K last year but because the ACP test was failed, I'm being told by our plan administrator that more than $8,000 of the matching (and $1,900 in gains) are in excess of the average contribution and are being put in a forfeiture account, which my owner will use to fund the 401K plan for this year (fees and funds). Our plan administrator's response is that this money never should have been put into my account since we failed the ACP Test.

I am essentially having more than $10,000 taken out of my 401K with nothing to show for it. Should I accept the logic our my plan administrator? He's trying to tell me that most companies he deals with have ADP/ACP issues and that HCE's are always having this same problem, yet a good friend of mine who runs a similarly sized business (50 employees) told me that he simply just Safe Harbors his plan to avoid upsetting employees. The plan administrator's response is that I should just do something like an annuity since we're always going to have this 401K issue (feels like he's just trying to sell me something).

I talked to my boss again about my concerns and he doesn't plan on Safe Harboring the plan any time soon. I'm having to cut my 401K contribution to about 4% now so we don't fail the ADP/ACP test again next year, so instead of maxing out at $17,500 each year, my contribution will have to be much less. I already max out on IRA's for my wife and myself and also have taxable accounts for stocks and mutual funds, but am wondering at what point I need to look for a company who doesn't have these ongoing issues.

Would appreciate any insight from others who run into this issue or who understand it from a planning point of view.

This has to be relatively common, but I can't find anything that is clear on the topic (which probably means there is no clear answer)...

Calendar year plan has dual eligibility:

1. one-month eligibility for deferrals, entry on the 1st of the month coincident or next following

2. one YOS (1,000 hours) for safe harbor and profit sharing, entry on 1/1 & 7/1, and uses DOP compensation

The plan switches to calendar year eligibility periods if the YOS is not satisified in the initial one.

Dan was hired on 4/1/09 and left in 2011. He had never completed a YOS while employed (generally working about 100 hours per year), so never became eligible for safe harbor or profit sharing.

Dan is rehired in January 22, 2013, and works more than 1,000 hours in 2013. For deferrals, he has to be eligible right away (there's no "hold out" rule in the document). For the employer contributions, is he treated as a new employee and therefore becomes eligible on 7/1/14? Or because he's already a "participant", we just look at the calendar year and since he completes a YOS in 2013, he is eligible for those sources on 1/1/14?

Thanks...

Hello;

My employer has a Safe Harbor 401k plan with a 3% non-elective contribution made to all employees each year. After having been under this plan for a many years, I've recently noticed that the contribution is based on the value in box 1 of the W2 form. This value is amount I earned for the year less the contributions I made to the plan. Is this an error on the employer's part? Put another way, suppose I made $10k in a year and put $3k into the 401k. This leaves $7k. Should the employer make the non-elective contribution as 3% of $10,000 or 3% of $7,000?

If the employer is making a mistake in how they are determining the non-elective contribution, how can I prove it? Are there IRS regulations that I can point to? And how do I go about getting any money owed (plus earnings on that money)?

Also this plan has been in existence for over 10 years, has the rules about this 3% non-elective contribution? If so when?

Thank you for any assistance...

Sincerely;

Michelle

Hello, everyone

A question. Two companies in a controlled group don't have a high deductible health plan (HDHP), nor a corresponding HSA. A third company, to be acquired, offers a fully insured HDHP to its employees. It's thinking of offering them an HSA as well.

IRS Notice 2011-1 doesn't require compliance with controlled group nondiscrimination test in respect of insured group health plans. Does adding the HSA option somehow take away that exemption, so now we have to offer the HSA to the other two companies as well? Note that the HSA isn't likely to be offered through a cafeteria plan.

Any thoughts you have would be much appreciated. Thank you!