Assuming a controlled group has elected qslob status for its separate lines of business and, their separate dc plans, what are the annual testing requirements...

410b tested separately for each qslob ?

401(a)(4) and/or adp testing separately for each qslob?

top heavy testing on a controlled group basis (not tested separately for each qslob)?

gateway test on a controlled group basis?

A participant is a 1% owner and in prior years was considered a Key employee because of his compensation. His compensation last year (the determination year) and this year (the allocation year) is not sufficient to make him key. Is he now simply a non-key employee and requires the TH minimum?

Client did an internal audit and discovered they owe compensation to a few terminated employees. The employees terminated two years ago. The client is now going to pay them for serivces rendered during the time of employement. This is not severance pay, they just did not pay them their full compensation.

The question is, do you apply the deferral election form that was in place? I don't think so because they are now termed??

Is there a corrective distribution that needs to take place? The compensation has not been paid yet, so I don't know what the correction would be. I don't think you have a missed opportunity correction.

Any thoughts?

Thanks

The participant is lost. The client has tried to find them using a locator service and the internet. His vested balance is under 5k. The client does allow forceouts to an IRA. This is a new Plan to us in 2013. His RMD should have started in 2011. Nothing has been processed, since he is lost.

Any suggestions?

I have a calendar year safe harbor match plan. The client wants to terminate the plan as of 12/31/2013. Can they do that or must they issue a 30 day notice and terminate on the 30th day which means they would need to fund the safe harbor match for anyone who defers in January, 2014. Thanks.

Can you have a SEP with alternative eligibilty requirements? For example, an employee is eligible to participate if EITHER -

(a) the employee has performed services for the employer in 3 out of the preceding 5 years, OR

(b) the employee is hired on a full time basis (40 hours per week), other than on a temporary basis.

Alternative (a) satisfies 408(k). Does alternative (b) cause a problem?

The goal is to exclude interns and other temps.

Owner/participant age 70 wants to start DB plan. Does not have prior plan.

Can RMD be delayed to age 73 with 3-year cliff vesting and excluding service prior to start of the Plan?

If yes, do you have to "catch-up" the "skipped" RMDs when the benefit becomes accrued in the 3rd "pop-up" year?

Hello, everyone!

Question for you all. We have a company that failed Section 125 ND testing for the year-end 2013. Most of the folks in the plan are highly compensated. To that end, the company plans to go out of pocket and pay the taxes dues on the portion of taxable benefits for each highly compensated employee for the 2013 taxable year.

Subsequent to this, the company would like to ask each employee to reimburse it for the taxes paid on their behalf. This reimbursement will be requested in 2014. If an employee refuses to pay the company back, can the company simply withhold what it paid on that employee's behalf from that employee's next paycheck?

This feels a bit wrong...the company may have to eat the tax payment, or just require all employees to pay their own way? Does anyone have any tax authority or other guidance they could point me too on this issue?

Thanks so much!

Anybody else notice on the IRS website that the instructions for the 2013 1099-R forms are not included? It jumps from 2012 to 2014. The actual 2013 forms are there along with the 2013 1099 General Instructions, but no form specific instructions for the "R" forms. I like to download the *.pdf files of the instructions so I have them handy for reference. Not a big deal I realize, just found this odd and wondered if anyone knew why?

I have a situation that I've been struggling with and I think some of you may be able to help, since I am not an expert in safe harbor plans.

I have a client who is a member of a controlled group with about 20 members. The members all maintain separate safe harbor plans and define compensation as total compensation. My client wishes to amend the definition of compensation to exclude bonuses, even though none of the other members will be doing so.

First, can a member of the controlled group have a safe harbor plan with different provisions than the others.

Second, if it can what are the potential risks?

Thanks for any help and guidance you can give me.

I have a plan that is undergoing a standard termination. The majority owner will probably forgo part of his benefit rather than fully funding the plan.

This majority owner is in his mid 80s and originally elected his RMD as a 20 year certain and continuous.

He is now well down the road from that and the plan allows him to re-elect as part of the plan termination. I'd assume since it's his own dime, he will want to take a lump sum, but we will provide him with all of the options available to him...well, because it's required and he's married, anyway.

So, the plan says that his lump sum value is "the value of his normal retirement benefit". This is standard language, I'd assume, to avoid early retirement subsidies being rolled into the lump sum value.

As time has gone on, his RMD has increased, so it is not one single value over its history.

I've talked to a few folks to see what they think the "present value of the normal retirement benefit" is for calculating a lump sum. Most people feel like the remaining value of the 20 year certain is the present value of the benefit, and I'm inclined to agree. The Plan obviously does not allow election of any benefit form that goes beyond the statutory certain period limit that would have been calculated as of his original 70 1/2 date.

A calculation accumulating benefits received each year and coming up with a benefits earned less benefits received does not make a lot of sense when you do the numbers because the compensation limit interferes.

Is there any guidance when a situation like this comes along? Nobody else in the plan is receiving anything, other participants who have left have elected to receive a lump sum. Does anyone see any issue with using that present value and allowing another election, that conceivably could include taking another certain and continuous annuity with the benefit of knowing 14 years on that he's still alive?

Aside from the MO's original intention to take a lump sum, if precedence is to make an actuarial adjustment for payments received, I will end up with a drastically different answer, and I want to make sure that no matter what, I don't run into an issue where he is allocated lump sum benefits he's not entitled to.

Question about permissible plan design under the ACA. As I understand it, annual dollar limits for essential health benefits are prohibited under the ACA. However, it has been suggested to me that it would be permissible to lower the coverage level after a certain limit is met.

For instance, prescription drugs would be covered 100% after a $5 copay for the first $20,000 in annual expenses, but only at 30% after $20,000. Any thoughts on this? I'd imagine that a plan couldn't cover at only 1% after $20,000 because that would be a de facto annual limit.

Background:

1) Terminated employee completes all the required forms for a Lump Sum Distribution from the company’s ESOP.

2) A company agrees that the terminated employee is entitled to a Lump Sum Distribution of his entire account balance.

3) Company states that they don’t have the required funds for the Total Lump Sum Distribution.

4) Company states they will pay a portion now and provide an “IOU” for the remaining balance.

Questions:

Is this legal?

Is the company Required to pay the Total Lump Sum Distribution now?

Can the ex-employee force the company to pay....if so how?

How should this ex-employee proceed?

Thanks for your time.

Lisa

Safe Harbor 401k Plan with 3% SHNEC going to the ESOP. May I permissively aggregate the 3% SHNEC going to the ESOP with a 6% profit sharing going to the owners in the PS Plan? Assuming of course I pass rate group testing. Both Plans are sponsored by the same employer and have the same plan year.

Dr. is 12.5% owner of a business that sponsors a CB plan and he owns 100% of a sole proprietorship which may start a DB plan. Does he have a separate 415 limit under each plan?

Plan allows for lumpsum, instalments and annuities as the allowable forms of benefit. Can the document be amended to remove annuities as a form of distribution for all assets or is there any cutback issues? Thanks!

4/30 plan year and 5558 extension was not sent in to extend past 11/30 (due to change in admin & internal confusion on responsibility). So now 5500 is late. They want to file as soon as possible and ask for fee waiver. So the following questions, which are more out of general curiosity as a result of this circumstance:

Who do they contact to request late penalty waiver?

Does checking DFVC checkbox affect eligibility to get a fee waiver? ie would you recommend they do or don't check off the box?

Is there a deadline for paying the DFVC fee?

Need some direction. Picked up a takeover plan where the formula for the Safe Harbor Match is 100% up 1% of pay and 50% of elective deferrals for deferrals which exceed 1% but does no exceed 6%. Does that meet the Safe Harbor requirements? Would seem to me it doesn't even meet the Basic.

Also, has something changed or is the person that wrote this doc totally off base as they but a requirement of two years of service to vest in Safe Harbor Match. Mandatory 100% vesting didn't change did it?

Thank you

Participant's 4% election was stopped in the plan sponsor's payroll system 12/31/2009 - this was done in error.

In 2013, the participant realized that she was not having 401k withheld from her paycheck - so she's missed 4 years of elective...

Correction is 1/2 the elective as a QNEC + missed match + earnings

Anyone know of any limit of time that we need to go back here - from my viewpoint, it's the full history so we need to calculate 4% on all wages from 2010 to 2013 - determine missed match, half the elective missed is QNEC and fund with earnings

Is there a minimum on the number of months that a plan has to be, funded I guess you can say, to be considered a short plan year? I have a plan that ended 10/31 and are wanting to change to calendar year. Can I do a 11/1/2013 - 12/31/2013 plan year? If so, can I still do it this late into December? I looked into the regs about short plan years and can't see a minimum number of months.