For purposes of accident and health plans under Code Section 105, is there a definition of personal injuries or sickness? Any IRS authority or guidance relating to the definition of personal injuries or sickness?

Consider a MEWA plan (not a bona-fide group or association), not subject to ERISA, where no M-1 is required to be filed. MEWA / plan sponsor offers only fully-insured group life, on a voluntary basis to eligible business owners. The policy is issued by a national carrier licensed to operate in all 50 states. The plan is not administered by a trust.

For those states outside the policy situs-state, where covered business owners reside, does the MEWA need to register? It seems that most states registration and model law requirements are concerned about Medical insurance benefits and/or self-insured MEWAs.

Any direction about how to assess NAIC model laws and state regs for fully-insured, non-medical benefits offered through MEWAs would be much appreciated!

Hi, I'm still new to managing a retirement plan and I have a question about the deposit of deferrals.

A client's last payroll date is December 26, 2013. The deferrals might not get deposited until after the end of the calendar plan year. Are those deferrals from that payroll date included in 2013 or 2014 testing?

I think that since the employees deferrals are based on pay earned in 2013 instead of 2014, those deferrals deposited in the trust in the beginning of 2014 are included in 2013's testing.

Thanks

Are alternate payees (under QDRO) required to be reported on Form 8955-SSA? Account balance is still in the plan. Thanks.

Quick little background. I have a Dr. client who wants to have a seperate plan for HCE's and NHCE's. The reason behind this is he wants to offer an investment to the HCE's that is not avaliable to NHCE's. Is this possible? If so, could someone point me in the right directions regarding rules and regulations and how to set it up.

Corp. owned 49% by Father and 51% by his Daughter.

Daughter and 3 other unrelated non-union employees participate in a 401(k) plan sponsored by the Corp.

401(k) excludes union members.

Father has modest W-2 ($12,000) from Corp. and is paid a large 1099R ($200,000) from Corp. for Management Services that goes on his Schedule C.

Assuming Father is a union member, can this be considered a Controlled Group or Affiliated Service Group to allow the Father entry into the plan based on his Schedule C income?

This was posed by an advisor to me:

Participant has been out for about four months after having had open heart surgery. He will probably not return to work until March of next year. He has medical bills and tuition for his daughter that he is behind on payment. Does he still have to request a loan from his 401K even though he may not return to work for some time. Will he accrue interest on his loan until he returns to work? In this instance can he opt for a hardship withdrawal instead?

My answer is that he is not eligible for either a loan nor a hardship b/c both are "in-service" requests and he is currently not being paid by the company.

We have a 401k plan participant that only has a life insurance policy as his plan asset and he is a 75 year old terminated employee. Is there an RMD requirement for this participant, and if so, how is it calculated, “distributed,” and taxed? Thank you in advance for any advice.

Scenario:

Participant does $15,000 401k in calendar year 2013.

Participant is over age 50.

Participant receives PS of $41,500.

In the ADP test, I will use $9,500 for the elective for this participant since total annual additions will be $56,500 for him / her meaning $5,500 of the $15k elective has to be catch-up.

Agreement? Any thoughts?

Employer has semi-monthly payroll but pays monthly commission to many employees, thus they would like to only withhold the 401(k) deferral once a month when the monthly commission is paid. Is that acceptable if the deferral election form states that the deferral will be withheld only on one pay check per month?

Need a little guidence. Can you include investments in a particpant directed 401k (not SDBA) that imposes a minimum investment and/or a minimum networth? Off the top of my head it sounds like it's discriminatory.

Is it feasible to reclassify Defined Benefit assets as rollover assets by simply issuing a 1099? The money never actually leaves the trust, it's just reclassified as a rollover account and no longer affects the DB valuation. I've never heard of this previously but I'm being told it's a normal practice. Sounds a little fishy.

A non-5%-owner participant passed away at the age 79 in 2013; she was actively working up until her passing. Her named beneficiary is her son. Total Acct Bal $372.18. Had she retired in lieu of passing, her RBD would be 4/1/2014. If the named non-spouse beneficiary elects to rollover the Acct Bal, is he required to receive at least a portion of it to satisfy RMD rules based on his 2013 age, single life factor? Would your answer change if the distribution occurs Jan 1 2014 or Apr 1 2014?

Controlled Group consisting of 2 entities. One entity "M" declares a match , the other entity "NM" does not for a particular year. If employee A earns wages from "M" and "NM" and defers off of wages from both "M" and "NM", do we need to use deferrals and wages from "NM" when figuring out the amount of match "M" owes?

Is it possible to word each document to exclude such wages and deferrals from the other entity when calculating the match?

Understand that combined testing ADP/ACP required.

I have a plan that has employees in multiple divisions. The plan allows all of the employees of all of the divisions to make elective deferrals (when the meet eligiblity and entry dates). The plan allows employees of only two of the divisions to receive matching contributions. The plan's definition of an eligible employee specifically excludes all but two of the divisions from the matching contribbutions.

My issue is how should these people be treated for ACP testing and coverage testing. My thought process was that they are excluded from the matching source via the definition of eligible employee and therefore should be excluded from the ACP and in the coverage, not benefitting group in the coverage testing.

From my reading of the EOB, it says that when there is a discretionary matching contribution and one group is given zero, there are two possible options available: One is as I have thought above and the other is to include them in the ACP as zeros and include them in the benefitting group for coverage. My issue with this is that this talks about a discretionary matching contribution that can be give at different levels. My thought is that this may different as my situation specifically excludes them from the testing.

I use Relius and I posted a matching transaction for the each specific division that was to receive the matching contribution. When I run the ACP, it includes the folks who are not eligible for the match as 0%. It also includes them as benefitting for the covereage testing. This seems to support the second theory, but I may have a coding issue as to how I have set-up Relius.

Does anyone have an opinion regarding the which methodology is correct or even preferable? Any thoughts are greatly appreciated.

I have a s corporation and a schedule c. I am the only employee on my corporation.

The 2 business are related and I own 100% on both.

Question: I already have an SEP plan on my schedule c. Can I establish a 401K salary deferral plan on my S corporation?

I am over 50. What are the limits.

Thank you for your help.

Because I have heard that the IRS is fairly stringent regarding the validity of 242(b) elections, I am hesitant about giving the go-ahead on a particular one.

The participant signed a 242(b) TEFRA election 12/29/83. He turned 70 ½ this year, 2013. My question is whether his election meets the requirements of 242(b) regarding “the time at which the distribution will commence”.

The 242(b) signed form says:

“ I elect that benefits be paid to me at the latest age at which such benefit will not cause this election to violate Section 401(a)(9) of the Internal Revenue Code of 1954, as amended, (“Code”) and as in effect immediately prior to the effective date of the Tax Equity and Fiscal Responsibility Act of 1982, (“TEFRA”). “

Although I am not sure this is relevant, the client's last pre-TEFRA document (1981) defines the latest commencement date for the payment of retirement benefits as the later of the date the Participant attained the Normal Retirement Date or the date the participant terminated employment.

Is the above a valid 242(b) election regarding the time at which a distribution will commence?

Basic Information:

ER sponsors a DC plan, utilizes SH Match. ER Would like to have a greater deduction for 2013. It is a calendar year plan. Only a handful of participants mostly the owner and his family. DC plan allows for a discretionary contribution, allocated on a pro-rata (across compensation) basis.

My understanding is that the plan would not be allowed to change the profit sharing allocation method to something more favorable, such as cross-tested. The ER is interested in adding a DB plan, but one that is offset by the DC plan. Typically I would add a DB plan, and amend the DC plan to add language making it crystal clear what the offset arrangement it. And do it all prospectively. In this case, they want the deduction for 2013 and the prohibition against the changes to the Safe Harbor plan during the year would prevent the PS allocation method change.

Would the addition of the DB plan in 2013 be considered a change, such that it would violate the prohibition against mid-year changes on the SH DC plan? I don't know if the DB and DC would be considered 1 plan, or could be considered 2 for this purpose. The DB plan would reference the DC plan and offset, but the DC plan would not, until a new amendment is effective in 2014.

If that doesn't work, could the ER set up a new DC profit sharing only plan to pair with the new DB plan? The SH Match would be provided in DC plan 1, a PS contribution would go into DC plan 2 as the offset, and then there would be the DB plan.

Or is all of this pointless because under ERISA they would all be considered one plan anyways and would be an impermissable change to the original SH plan?

Thoughts? Advice?

Hi. I am a small business owner of age 34 with three small kids and stay home wife. I don't have any retirement plan at this moment. All my after-tax savings are in stocks and mutual funds. I don't pay myself high wage to avoid income tax and Social security deductions, so I don't earn enough wage to make big contribution to tax free retirement accounts. However yearly capital gain (especially short term since I trade as well) from these stocks are adding on to our income tax bill and pushing up to higher bracket.

Anyway I am thinking if there is any retirement plan that I can move our savings to so future capital gains won't be adding on to our income statement? Please suggest either retirement plan or anything tax free fund to save up for kids education that is available to me.

Also will I still be allowed to trade stocks and mutual funds in that retirement plan? If the fund's capital gain does not contribute to income tax, I assume capital loss would not also contribute to the income statement. In that case how can you harvest the loss?

Thanks for all the advise. My tax accountant is useless in answering about retirement question. Is there any professional service that I should approach?

I guess I'm old school, but I miss the days when as a TPA our focus was on our client and how to help them with their retirement plan needs. It seems that has all but faded away. We deal with brokers, not clients. The platforms use participant money to pay for TPA "conferences". TPA firms use platforms as "sponsors" in their advertising and promotional and even charity events.

Is it unrealistic to think I could find a firm who wants an experienced administrator who wants to work for the client and not for the platform?

Thanks for letting me vent.