What plan year is a contribution attributable to and whether it's based on the dates the money was earned or based on the date of the paycheck.

It is my understanding that 414(s) compensation would include auto expense reimbursements and cobra reimbursements which are includable as income on the W-2? Am I correct on that.

Having a little discussion with a plan sponsor; I guess their prior providers told them that such expenses did not count as compensation even though reported on the W-2.

Thanks in advance for any guidance.

We are the advisor two a couple of plans maintained by a controlled group. One of the companies gives a match, the other does not. The bundled record keeper has tested it each year, demonstrating that the two companies pass coverage separately, and preparing separate ADP/ACP tests.

The employer is nearly frantic because they have now been told (by someone of unknown credibility) that they can no longer do separate testing because they have switched from C corporations to S corporations. I have not been able to find anything to support this contention, but wondered if I've simply overlooked it.

Have a plan with 90 day eligibility for deferrals. Entry date is the first of the quarter next following. (no exclusions)

Plan has match and profit share with allocation conditions of age 21, 1000 hours, last day. Plan excludes keys from TH minimums.

One of the partner's children has worked there continuously since 2009. Entered the plan as of 04/01/2010.

Did not work over 1000 hours in 2009 ,2010, 2011 or 2012 but is age 21. Was excluded from the TH minimum in those years due to status as "key". Works over 1000 hours in 2013 and is employed on 12/31/2013.

I believe this participant gets a full profit share allocation and match for 2013 because the requirements for allocation have been met. I have one of the large vendor administration teams telling me that she won't get PS and match until 2014.

agree or disagree?

individual has his own 401k plan for his company. only employee.

he is in a SEP, total unrelated company, no ownership.

he receives the maximum in the plan (e.g. 51,000)

as I recall, annual additions are separate for unrelated companies, so he could still put in a contribution for himself in the 401k, but my brain is on a freeze, so just want to verify.

Employer mistakenly allowed someone to defer prior to entry date. (Allowed as of 7/1/2013, when should have been 1/1/2014).

So, correction will be to amend plan to retroactively change eligibility/entry for this person, as permitted under Rev. Proc. 2013-12. This change will apply to one person only.

Is a SMM required to be given to all participants? A strict reading would seem to be yes, yet it seems ridiculous in that it cannot possibly apply to any other employee. Although 2520.104b-4© allows a dispensation for Retiress, separated participants, and benefficiaries, it doesn't address the situation at hand.

Would you give a SMM to everyone?

In a small cash balance plan (a DB/DC combo design to minimize employee benefit costs), suppose that the plan's interest rate credit is written to provide for the NHCEs the greater of the 3rd segment rate under MAP21 or the 30-year treasury rate. Then, for the HCEs, it provides the lesser of the 3rd segment rate under MAP21 or the 30-year treasury rate.

Perhaps define the actuarial equivalence as a fixed rate (for purposes of this discussion).

Problems? The HCE benefits would grow less quickly than the NHCE benefits. Of course this helps with 401(a)(26) and 401(a)(4).

Has anyone attempted this?

Has anyone attempted this and received a D letter?

Has anyone attempted this, been audited, and survived the audit?

This question is about a couple who operate a farm. The husband has been reporting as a self-employed farmer for several years with an established SEP plan. Four years ago, the couple elected to treat the business as a qualified joint venture, reporting the revenue and income on two Schedule F's, one for each spouse. Prior to the election, everything was reported in the husband's name.

The farm has reported a loss for the past three years, but this year it has a profit. The husband and wife would both like to make a contribution to their SEP plan (as well as for other qualifying employees). However, the wife has only reported the farm on a separate Schedule F in her name for four years, and the farm had a loss for three of those years.

The question is whether the wife meets the eligibility requirements for a SEP contribution since she did not have positive earnings from the business for three of the last five years. Does a year with a loss count as a year of service for an owner for eligibility purposes?

Have a takeover plan that has 1000 hour, last day, except disability(total and permanent), death, NRD.

Profit Sharing.

I want to remove disability from the restated plan as sometimes you don't find out right away that it is total and permanent.

Also NRD. We don't have in any of our plans, does this mean only in the year they retire they would get a contribution, or if a participant has the met eligibility for the plan, once they reach NRD age, they are always eligible to receive an allocation ? A Person goes to PT( under 1000) hours, would they get a contribution for each of the years after turning 65, or only in the year they actually retire.

Any problem removing this upon restatement?

Thanks

P

I recently heard that a 501©(3) org can sponsor both an ERISA 403(b) and a 401(a) plan and get a double 415 limit ($52,000 ER contribution to each plan for a single employee), sounds too good to be true?

I know if the plans allow elective deferrals there's a single 402(g) limit but can I also have a 457(b) for another $17,500 on top of the $104,000 to the 403(b) and 401(a) plans?

Thanks

A plan document limits a Profit Share contribution to the 415 limit. For the 1/1/2013 to 12/31/2013 plan/limitation year, an employee, age 30, defers $15,000 and has a match of $7,500. This employee is limited to a PS of $28,500 – as to not exceed the 415 limit of $51,000.

Another employee, age 55, also defers $15,000 and has a match of $7,500. Would there be an issue if the PS for this employee is $34,000? Yes, it would exceed the 415 limit – but the employee would be able to recharacterize the excess $5,500 to catch-up.

Any problems with this?

I have a client that works for a hospital and is eligible to contribute to their 457(b) plan, and he also works for a federal agency, and is eligible to contribute to the federal governments Thrift Savings Plan. It appears that he can contribute up to the $17,500 limit in both the 457(b) plan AND the Thrift Savings Plan, and is not limited to a single $17,500 between the two plans.

Is that correct? If someone has any definitive proof, please let me know where I can find it for file documentation.

My calendar year defined benefit plan had both common law participants terminate in 2012 and they were paid out lump sums in June 2013. For, the 2013 year, for purposes of applying the combined limits (there is a 401(k) also), is the plan still considered to covered under Title IV? The DB contribution is way over 25% of compensation and I would rather not limit the profit sharing to 6% of compensation.

MEP A spun off single employer plan B eff 1/1/12. PA of Plan B receives QDRO with a date in 2011 as the date of property settlement and stating that earnings will calculated as of a date in 2011.

PA of Plan B has no authority or resources to calculate earnings prior to the plan effective date in 2012. Can Plan B resolve this issue through negotiation with legal counsel for participant and AP or is it a more prudent course of action to reject the QDRO and request a modified order?

We are the TPA advising the PA on the acceptability of the QDRO. Thanks for your comments and perspectives.

I have a profit sharing plan that held mortgages as an investment option. When the plan went daily, the mortgage assets were allocated to the participants. Each quarter the income and principal paid is allocated to the participants. For several years this worked perfect. There is currently $800,00+/- in this account. The Trustees have been informed that the majority of the mortgages are defaulted can worth zip!!

1. The Trustees will pursue legal action with the entity holding the mortgages - The Employer wil pay all costs associated with this legal proceedings. Any issue with this?

2. Trying to avoid a participant riot when they find out the account has been over valued in the past and there will be no future payments.

Should the Partners, take the HNCEs portion of the mortgage pool? They would need to take funds from their core funds and make the NHCEs whole?

3. There are RMDs that need to be issued - some participants only have a mortgage pool account, so with no income and principle coming in, how can they make the RMDs

4. There are some of these are second mortgages, so the only way of getting money would be to pay off the first mortgage. The Plan Sponsor wants to take some of the core funds for those in the mortgage pool pay off the first mortgage, and then collect.

sounds like a &^%*()*#)( mess if you ask me. We will strongly recommend an ERSIA attorney get involved, but I am just looking for some insight on what to do.

thanks

Dr X has an arrangement with Company A in which Dr X pays Co A a Y% of his revenue for staff supplied by Co A.

Co A leases their employees from Company B.

Dr X maintains a 401K and DB plan.

All employees meet the regulation requirements regarding leased employees with the exception of primary control; Co A maintains control of employees. However, the regulations specifically name job functions that satisfy the control test; such as, receptionist, wordprocessing personnel, and nurses. The regulations go on to say that professionals that regularly use their own judgement and discretion in the performance of their services and are guided by professional, legal or industry standards do not satisfy the control test. Dr X utilizes Co A's staff to fulfill both clerical and professional positions.

Should the clerical employees be treated as leased under Dr X's plans? Does the payment arrangement (% of revenue) make this more of an outsourcing arrangement in which all staff are disregarded under Dr X's Plan? Or do we just have a clever attempt at skirting the issue?

Any input is appreciated!

I have a client that fails the ACP test and is required to refund match to two HCEs. One of the HCE is not fully vested in the match contriubution.

How is the refund handled in this case - does he still receive the full refund, or is part of it forfeited?

Client is terminating a DB and 403(b) plan and need a default IRA provider that would accept balances from both plans for participants who do not respond.

Can anybody recommend some providers?

Thank you.

Has anyone reported an actuary to the Actuarial Board for Counseling and Discipline (ABCD)? A friend who is an actuary told me of a DB plan they recently took over where the prior actuary seemed to be ignoring PPA. Sure, they were using the new Schedule SB rather than just the old Schedule B, but they clearly were using any interest rate they wanted, standard calculations were wrong (i.e. shortfall amortization calculations), and they were ignoring new rules such as the annual funding notices and benefit restrictions. When reading The Application of Precept 13 of the Code of Professional Conduct that the American Academy of Actuaries released last December, it appears that this actuary needs to be reported.

My friend is concerned that by doing so, the IRS will audit all of the prior actuary's plans. This could create a problem for his new client. Even though the plan has been cleaned up and is now functioning according to the law, an IRS audit usually creates a headache. So my questions are:

1) has anyone reported another actuary to the ABCD?

2) and if so did it create any problems for your clients?

Thanks.