Now that we're somewhat down the road in 404a5 fee disclosure requirements is anyone aware of any push from ASPPA or any other organization to question or otherwise confront the requirements of this rule? It's becoming a bear to live with especially as an investment provider that is seeking to maintain a strong core menu for the 401k plans it manages. Anytime there's a change to the menu, there are 30 day notices to provide and 404a5 disclosures to update going to an audience that is just not reading or understanding the material. I'm all for full disclosure to participants but the time and cost here don't seem to equal up to the benefit of making these disclosures.

Any comments or chiming in appreciated!

Have a situation where we can demonstrate employer intent, both by clear instructions to the plan document provider and actual operation of the plan, but document provider made a scrivener's error in a plan amendment.

I know IRS historically doesn't recognize scrivener's errors but wondering if anyone has seen any losening of that position or whether an anonymous VCP filing would just be a waste of time?

Thanks

I have a question that I have been searching high and low for a clear andwer on and have not found one. Here is the fact pattern:

Employer offers two health plan options to employees, 1 HMO and 1 PPO. Total premiums for the HMO are on average $9,000 and the employer pays $7,000. Total premiums for the PPO are on average $13,000 and the employer pays $8,500. All premiums are excluded from medicare taxable wages (no payroll or other tax applied).

All full-time Employees are eligible to participate in either of these plans with those levels of contribution. Due to the lower employee premium cost of the HMO plan, most low wage employees choose that plan while a higher percentage of the higher wage employees opt for the PPO. The average wage of a participant in the HMO plan is around $25 and the average wage of a PPO plan participant is around $41.

My understanding is that for premium only plans the safe harbor eligibiltiy test is all that must be met. Does the fact that there is no discrimintation in what is offered to employees mean that the eligibility test is met? Or since the PPO is weighted towards higher compensated employees higher wage employees and PPO members get 1) a higher premium contribution from the employer and 2) more wages sheltered from taxable wages is the eligibility test potentially failed?

Does anyone know who far out (decimal places) the MAP-21 rates go before being rounded (after applying the corridor) and are they rounded to nearest or up or down? Thanks.

Can a 401(k) Plan be amended mid-year to adopt regular (non-EACA & non-QACA) auto enrollment or must it be effective the first day of the next plan year? Thanks.

If a plan failed the ADP test for the 2012 plan year, did not distribute the excess contributions until after the 3/15/2013 deadline, and then did not file Form 5330 to pay the 10% excise tax by the deadline of the last day of the 15th month following the close of the 2012 plan year, how is this corrected? Would the plan sponsor file the Form 5330 and pay the excise tax even though it is past the deadline? (Assume the IRS would assess some sort of penalty/interest for the late filing of the Form 5330....) Is there some other correction that would be required due to the Form 5330 not being filed on time?

I used to use Judy Diamond for marketing purposes to get current plan information and contacts for a particular geographic location. They have gone up considerably in price. Does anyone know of a similar firm/website that provides this information? Any help is appreciated.

So someone just blew my mind. Is it true that if 2 501c3's are under common control (in fact in my case, it's a parent subsidiary situation) that you do not have to have both organizations covered by the plan? In other words, universal availability applies only to each entity completely independently?

Would just regular coverage apply, or does that even apply?

I don't have much experience with 457b governmental plans and a recent discussion has me confused.

What is the annual additions limit to a governmental 457b? For example, an employee defers $23,000 to the plan for 2013 (catch up eligible). The employer matches 100% on first 3% deferred. Based on his compensation the match would be $3,000. Total contribution would then be $26,000.

However, for some reason I was thinking the annual additions limit was $23,000 (assuming catch eligible) including both employee and employer contributions. Therefore, I am confused on what is the annual additions limit in a 457b governmental plan?

Thanks for the help.

Haven't seen this one, although it perhaps isn't all that rare. And I have no other details other than the following.

Employer merged with another business at some time in the past. The other business had a plan that allowed participant loans, and those loans were transferred to plan of new employer. To make a long story short, the participant loans were originally set up for weekly withholding, and the new employer had bi-weekly payroll, but continued to withhold, on a bi-weekly basis, the original weekly amount. So under-withheld by 50%.

So, even though the loan was correctly set up, withholding was incorrect. It is now WELL past the original 5-year limit - by a year and a half, and there is still an outstanding balance.

Since they are beyond the original 5-year maximum period, under Revenue Procedure 2013-12, Section 6.07(2)(a), it appears that this can't be "fixed" - even under VCP. It is just a deemed distribution, no correction available.

Is there any other solution that I'm missing? I know that the listed corrections in the Revenue Procedure are not the EXCLUSIVE corrections, and I wondered if anyone had submitted under VCP to attempt to correct such a situation anyway.

As a practical matter, since the loan was mostly paid off and the deemed distribution would be small, I suspect the employer would just make the participant "whole" outside the plan, because the cost of VCP filing and correction would exceed the cost to make the participant whole.

Client had a DB plan with 5-year cliff vesting. A participant terminated in 2012 and took a distribution. The client froze the DB Plan effective 12/31/13. It started a 401(k) plan with a match on January 1, 2014. The participant who terminated in 2012 was rehired in 2014.

Does the client have to credit the participant with eligibility service under the 401(k) plan on the date of rehire? I think the answer is yes for two and 1/2 reasons.

First, no 5-year break and thus service not lost. Second, the participant was not a participant in the 401(k) plan, and the rule of parity only applies to participants. Since the terminated individual was not a participant in the 401(k) plan, the rule of parity does not apply for purposes of crediting service under the 401(k) plan. The second and one-half reason is that even if you consider the DB participation as being a participant for purposes of applying the rule of parity to the 401(k) plan, the participant was vested and thus the rule of parity does not apply.

Change the facts a little. What if the employee did not participate in the DB plan and terminated in 2008 after being with the company for over five years and working over 1,000 hours in each of those years. In that case the individual would not have been a participant. Does that mean the years credited before the 401(k) plan have to be counted for eligibility puropses even though the employee was gone for more than 5 years?

Here is the situation. Owner of LLC from Jan 2013 to current. NO employees. In September, 2013, purchased another LLC that has employees. Can the dr. make a SEP-IRA contribution under her single LLC for income earned BEFORE she also became owner of the LLC with employees? Based just on her January, 2013 to September, 2013 income.

Since the type of work she is doing under her solo LLC and the one with the employees is the same and she is 100% owner of both, I would think that in future years she cannot make that deduction without being discriminatory. But for this split year and her income earned prior to owning other business is what I'm just not sure of

Thank you!!

Is 4.25% still considered reasonable for a participant loan from a 401(k) plan?

can canadians participate in US 401(k) plans? would they have to have us source income? can a canadian working for a us company being paid in canadian dollars participate in the plan? can a canadian being paid in us dollars participate? does anyone know the key issues when dealing with canadian citizens?

The IRS indicated on its website on 3/27/2014 that it expected to issue "most opinion and advisory letters for the latest round of pre-approved defined contribution plans on March 31, 2014." But so far, none of the TPAs I have spoken to have received their letters yet. Has anyone else received their opinion letters?

http://www.irs.gov/Retirement-Plans/New-Two-Year-Period-to-Adopt-Restated-Pre-approved-DC-Plans

Stupid question, but I'm not all that familiar with these plans.

Let's suppose that you have a cafeteria plan, that allows salary deferrals for vision and for dental expenses. Not a "wrap" document.

The plan also provides for automatic withholding of health insurance premiums, UNLESS you elect out of it.

My question is this: for those people who do NOT elect out of the health insurance premium being withheld from their pay via the cafeteria plan, (and don't participate in withholding for the dental or vision) are they counted as "participants" in the cafeteria plan? They are already reported as participants in the health plan 5500, so it would seem to be "double counting" to also count them in the cafeteria plan 5500?

I'm not certain the regs actually support this, but by the same token, it seems reasonable. Any opinions? It's a big deal, because if they don't have to be counted, a lot of cafeteria plans will be below the 100 participant count and won't require filing.

Thanks!!

Do voluntary aftertax contributions count toward 402(g) limit?

Can they be converted to Roth?

What does everyone suggest to clients as a guideline for the appropriate amount of fiduciary liability insurance? I know there are many factors to consider, but for a fairly standard $8 million plan we would usually suggest a policy for about 10% of assets. Having a hard time finding any opinions on the 'right' amount of coverage. Seeking opinions!

Here is the situation:

3 Plans:

Plan A: Regular plan

Plan B was a safe harbor plan but terminated effective 3/31/13. Participants started participating in plan C effective 4/1/13.

Plan C: was part of Plan A until 4/1/13

If plan B decides to test separately from 1/1/-3/31. Does HCE mandatory aggregation apply? In other words, do I need to combined the HCE comp/contributions made to plan C in the test of Plan B and vice versa?

Anyone know where I can get samples of internal controls. I have started one but want to add anything I missed.

thank You