Background: Daily valued plans, participants statements include all required language as well as fee information and vesting. Quarterly ones are sent electronically but annual participant statements are sent on paper.

Is this the norm? We should know the answer by now..... but our understanding is the only way for us to be able to do the quarterly ones electronically is to at least send the annual ones on paper...just wanted to see what ever one else has been doing.

A 401(k)/PS plan excludes fringe benefits from compensation in the adoption agreement. Employer mentioned that some of the wages reported for employees includes cash in lieu of electing the employer's health insurance (they are covered by spouses' plans). Amounts vary, but are up to $9,000. Deferrals have been withheld from these amounts.

My review of the IRS website and EOB indicate that any pay other than basic compensation for the job (one's salary) is considered a fringe benefit, though I haven't found anything specific for this cash in lieu of insurance. Does anyone have anything specific regarding these types of payments as a fringe benefit?

thank you.

Can a duplicate RMD in a 401(k) that was issued in 2013 be corrected or reversed in 2014? We had an issue where the Participant had taken a RMD in 2013, then the custodian had also issued an RMD in 2013 for the Participant. The custodian is saying that they cannot reverse the duplicate entry because it is now 2014 and the error happened in 2013 and they cannot cross tax years.

Any thoughts or ideas about correcting this? Thanks : )

Company A's has a safe harbor 401(k) profit sharing plan

The plan allows for distribution of account upon the attainment of age 59 1/2 and the safe harbor hardship from all sources of money.

Participant age 60 applies for a hardship for medical expenses not covered by insurance.

I am told by the TPA that since the plan has an In Service Distribution and Hardship, the participant must first take the distribution as an In Service ( subject to the 20% withholding).

I have never heard of this.

Thoughts????

Company A maintains a 401(k) Plan on 9/12/2012 Company A purchased Company B - now we have a controlled group.

Company B maintains a SIMPLE IRA

Since the SIMPLE was not terminated prior to 1/1/2014, it is my understanding the SIMPLE Plan must continue for the entire 2014 Plan Year. Once terminated since the particiapnts have been in the SIMPLE for more than 2 years, they can roll their account balance to the 401(k) Plan.

1. is there an issue that one company has a SIMPLE and one has a 401(k) Plan?

2. Can the employees in Company B stop their SIMPLE IRA contribution, join Company A's 401(k) and defer up to $17,500 ( reduced by the contributions made to the SIMPLE). Then in November of 2014 the Employer will notify employees of Company B the SIMPLE Plan is terminated

The goal of the employer is to get everyone under one plan ( the 401(k)) for 2014.. Any suggestions???

Thanks

I am looking for suggestions from others on how they handle when employees opt out of the Employer provided Health Plan.

Currently at Sinclair, if an employee waives the insurance, they are paid an additional $25.00 per pay. They can either take this as cash award or direct the $25.00 towards a FSA. The current policy is that employees must work the full pay period to receive the $25.00. If an employee is on unpaid leave they do not receive the incentive.

How do you handle their Waiver incentives?

When an employee is on unpaid leave do they receive the incentive?

When the employee returns do you make up the amount the employee would have received?

Thank you,

John

An employee with no ownership age 70.5+ is still working.

Plan allows for in-service distributions.

Participant wants to rollover account to IRA.

Does the participant have to receive RMD before rolling over account. That is does the rollover request trigger an otherwise delayable RMD?

Oh and yes I realize that by rolling over now they will subject funds to RMD in the IRA in future years that might be delayed under plan rules.

Can the plan make a loan to a participant, secured by a mortgage, in excess of 50% of account or $50,000?

I have an indiviudally drafted 403(b) PS Plan that has a 5 year vesting schedule. I have read the document 5 times but no where does it state how to use the Forfeitures? Has anyone come across this?

We have been using the 5500EZ for single participant plans.

We are thinking of using the 5500SF now for these plans. Other than the obvious differences in filing, client's computer savvy etc, is there any compelling reason for using one vs the other?

We have a plan that allows loans but they are restricted to the usual items: Medical bills, tuition, purchase or maintenance of a home.

Should the plan sponsor have written proof about a need (i.e. estimate, etc.) before approving the loan or is the signed statement of the participant good enough?

Thanks

Plan has a 3 year vesting schedule for their match. The match is not available for hardship. Question; Can the admend the plan in 2014 to say that anyone hired prior to 12/31/2011 their match would be considered a QMAC and therefore 100% vested.

I am thinking no since the amendment does not really change any benefit as those participants would be 100% vested at this point. However, if they wanted to 100% vest anyone hire prior to 12/31/2012 that could work since you are actually providing an improved vesting schedule. In the second example, you could then use the match portion for those employees hired prior to 12/31/2012 as a QMAC and then test that portion in the ADP.

I have a plan that has a portion of their match as a QMAC. We typically "reverse borrow" a portion into the ADP test to improve the results. In the past we only "borrow" a portion that does not cause the ACP test to fail. Is this a requirement? Or can we borrow more then Shift back a portion of deferrals to allow the ACP portion to pass.

Hello Everybody,

I am a controller of a company who just acquired another larger company who has a Safe Harbor 401K plan. We, the acquirer, do not have a plan.

We are adding the parent company employees into the acquired 401K plan.

The plan is administered by a payroll company.

My concerns are:

1. The plan name is still named the subsidiary name 401k plan. The employees of the parent company are not employees of the acquired company. Shouldn't the plan name be changed to the parent company's name and it's EIN#?

2. Control groups and testing.

3. Board resolutions? Plan amendments needed?

Unfortunately, our management sees this as an afterthought and everything is left for me to figure out. I do not trust the payroll company 401K department to do this correctly. He just wants me to write a letter to change the plan name. Don't we need to amend the plan to add the parent company employees??

Thank you for your comments and knowledge on this!

I’ve got an interesting (and a bit confusing) question for everyone. Here’s the background.

1) I was on an EPO from Jan to Oct 2013 and on HDHP from Nov 2013 to Dec 2013.

2) I have an FSA for whole of 2013, with balance of $100 at end of 2013. As of now, I still have an outstanding bill for $150 for 2012 expenses which needs to be claimed. This should make my FSA balance 0.

3) The FSA has no grace period, but in 2014, the new rules permits FSA carry forward of $500.

4) The FSA became a limited FSA from Nov 2013 onwards despite the fact I have not contributed to a HSA. (but the HSA account was setup automatically)

5) From Jan 2014 onwards, I’ve started contributing to the HSA via payroll.

Q1) Can I utilize the last month rule to contribute the full $3250 to my HSA for 2013? From what I have read (extensively) I know I should be able to, but yet, contributing seems to contradict the rule that I can’t contribute to HSA if I have a FSA for the year.

Q2) If not, would I be able to use the last month rule once I've completed the FSA claims for 2013 and fully deplete my FSA to 0 today?

Q3) If I didn’t contribute to a HSA in 2013, will my FSA still be limited to dental and optical regardless?

Been puzzling me to no end... Any tax/IRS/HSA experts care to share your thoughts?

Hi,

the 403(b) Lifetime catch-up definition states "To qualify...plan participant must also have contributed an average of less than $5,000.00 a year to the plan."

Does this mean an average over their time of employment?

Does this mean an average over the length of their contributions?

Ex: Dave Smith began his employment in 1990. He has 24 years of service, so he qualifies. He has contributed $9,000 the past 6 years for a total of $54,000. Would he qualify for the lifetime catch-up?

Thanks

-John

After reviewing prior posts, it seems as if it is no surprise when a takeover plan document is unsigned. Has anyone come across a situation in which a company acquires another company (let’s call the other company, “Target”). Target has a signed 401(k) prototype plan. Prior to sponsoring the prototype plan, Target sponsored an individually designed plan, which was never signed. The prototype vendor used the unsigned document to create the prototype and never asked for anything more. Company wants to merge Target’s 401(k) plan into its own 401(k) plan but is concerned that Target’s prior unsigned individually designed document will taint its 401(k) plan. Should we simply ignore Target’s prior unsigned document, or is this a real concern that would justify a VCP filing?

The financial institutions are advising that they do not track deposits ( what I would call basis ) into Roth IRA accounts.

So does that mean that every person will need to track their basis in their Roths ?

If so - most people do not retain their old statements and therefore do not have this figure. One fund company told me recently that they do not even retain statements prior to 2000 any longer.

If the above comments are true then how does a 50 year old for example figure his basis when he cashes in his Roth IRA account ??

THanks

Participant has an In Roth Conversion account balance in his prior employer's plan. The participant has not attained age 59 1/2 nor has the 5 year period expired. The participant would like to transfer this roth balance to his current employer who also allows for roth contributions.

Is he allowed to transfer the funds directly from the prior plan to the current plan and not jepordize the roth account balance.

Thanks

A large doctors group carved out >100 employees who were sold to a hospital group. These employees continue to work in the same capacity for the doctors group, and the hospital pays the doctors group to manage them. The hospital group offers full benefits, including a 403b plan - we don't have knowledge yet of whether or not the hospital group matches deferrals at this point.

The doctors group has @ 80 remaining employees - all upper level management and doctors. They would like to max out the plan between Safe Harbor NEC and cross-tested profit sharing allocation (entity is a partnership).

If the hospital does not offer an employer contribution, will the doctors group have to fund safe harbor and profit sharing for the group that is being leased back?