Is it correct that the only CE credits I can count toward my ERPA requirement are those that are provided by one of the providers listed on the IRS website? If I am a member of a local educational organization that sponsors monthly educational programs, but that organization is not on the list, I can't count those hours?

We have a davis bacon plan that exceeded the deduction limit. What do we do to correct it?

Plan definition of compensation is W-2 plus 401(k) and 125 elective deferrals and reduced by the safe harbor taxable fringes in IRC Section 414(s) regulations. This includes "deferred compensation". The plan sponsor has an elective deferred compensation plan ("SERP") in which senior executives participate. The 401(k) master plan document (national prototype) allows the sponsor broad discretion in designing procedures for participants to make elective deferrals and limit is the 402(g) limit. The sponsor's payroll dept has been applying 401(k) deferral election percentages by the senior execs to their gross pay, before the SERP deferrals. The match is fully discretionary - no formula or limits in the document. Company announced that it would match "100% of deferrals up to 4% of pay". Sponsor also uses gross (before SERP deferrals) pay for applying the match.

Recordkeeper believes sponsor needs to do voluntary correction under EPCRS as it was using a compensation definition not in the plan. The recordkeeper uses the 414(s) definition of compensation for ADP and ACP testing and the plan passes both tests every year. Code section 401(k) and (m) cite to 414(s) compensation in describing the ADP and ACP test. For deferrals, section 401(k) just describes a plan that allows an employee to elect cash or deferral into the plan. 1.401(a)(4)-1(b) regs say that deferrals and matching contributions are deemed to pass 401(a)(4) if the ADP and ACP tests are passed.

Does the sponsor have a good faith argument that its administrative procedures and practices are not violating the plan document and 401(a)?

I recall that on a previous post it was suggested that the sponsor amend the plan to adopt Medicare Wages to solve this issue.

Concerning the kinds of everything-but-the-name marriage that some States' laws provide, the Treasury department stated as its view for Federal tax purposes that marriage does not include a relationship that State law does not label as a marriage. That view seems to apply even if State law expressly provides that the relationship gets all the benefits, burdens, and other legal consequences of marriage.

I'm trying to size how big the exposures are if a 50+-States employer chooses to treat as not spouse those who have an everything-but-the-name status. Doing so might lead to challenges, legal and otherwise, from participants and beneficiaries. Likewise, I'm trying to size how big a fight such an employer takes on if it asserts, with Form 8275 disclosure, a tax position that an everything-but-the-name relationship that also is recognized under the law of the State in which the participant resides as providing all the legal consequences of marriage is a marriage for Federal tax purposes.

Although several States had an everything-but-the-name status, how many of those States still have such a status AND how many of those do not provide with-the-name same-sex marriage?

Sorry, I realize this doesn't pertain directly to retirement plans, but it is related to retirement.

We have client who normally receives his Social Security check on the third Wed of each. He unexpectedly received his Social Security on 11/01/13, and then again on 11/13/13. So it appears he was overpaid.

Assuming this was indeed a mistake and he continues to receive regular checks from December on, how much time does the SSA have in which they can come back and demand the money?

So, here's one I hadn't seen, but maybe it is actually quite common. Plan language currently says NOTHING about safe harbor contributions, or the ability to utilize a "maybe" provision,etc.

Last year, a "maybe" notice was done. Now they want to utilize the 3% SH and amend the plan for 2013 to provide the 3% SH.

Is this ok, under 1.401(k)-3(f), or does the plan FIRST have to have safe harbor "enabling" language prior to 1/1/2013?

The documents I have seen all have such "enabling" language, prior to the start of the "maybe" year.

Cross-tested Plan requires "1000 hours/last day employment" to share in Employer PSP contribution. There is also a 3% Non-Elective Safe Harbor contribution.

Participant Bob terminates during the year with less than 1000 hours, but he is benefitting under the Plan due to the safe harbor.

The Plan does not contain an allocation group solely for participants who share in the safe habor or top-heavy (i.e., benefitting under the Plan) but who do not satisfy 1000 hour/last day requirements (i.e., the Plan does not have a catch-all group).

The Plan DOES have the gateway provision that "the minimum allocation rate for Non-Highly Compensated Participants shall be the lesser of....." and then goes on to state the 5% or 1/3 rule.

Bob did receive the gateway allocation.

Question: Is there a plan document issue since there is no catch-all group defined? Bob's group was the staff group. Active participants in the staff group received more than the gateway, but Bob only the gateway.

Make sense to anyone?

Thanks.

When calculating compensation for a self-employed participant, we use the Schedule SE formula - multiplying by 92.35% and deducting 1/2 SE tax. Doesthe Medicare 0.9% surtax figure into that calculation and if so, how?

Thanks.

Along with my other topic about virtual phone systems, I'm now in search of the best virtual data room so that remote employees have access to same database. Suggestions please?

401k plan discovers during internal audit that one category of overtime was not included in total wages for purposes of calculating employee deferrals and employer match. Error began in 2009. I don't believe we qualify for self-correction of significant operational failure because we can't correct within the "correction period" (last day of second plan year following plan year for which failure occurred). Also don't think this is an insignificant operational failure because it affected all participants over 5 plan years. We don't have any figures on percentage of plan assets, etc. yet. We don't fall within any of the failures for VCP on the schedules. Should we just make the corrective contributions as a sort of self-correction and document correction and move on? Any guidance would be appreciated. Thanks!

We're getting notices from the IRS for plans that DID file for 2012, reminding them that they need to file again for 2013. Is anyone else getting these notices and/or does anyone have any insight into why they're sending these?

At first I thought perhaps they would send to just those who filed in 2011, but not in 2012. But the ones we have received DID file in 2012.

A prospect says they have a DB plan and that they are a "cash basis" S Corp filer. Plan year and business tax year are the same. They believe they must fund the contribution by the end of their fiscal year in order to get a deduction on their business tax return that covers that same year. They state that any amounts contributed after the end of their plan year, even if they are for purposes of minimum contributions, can only be deducted in the year the contribution is actually made.

Does this sound right?

401(k) plan has eligibility requirements of age 21 with 3 consecutive months of service (shifts to the plan year if not met); monthly entry dates. The Hours of Service method is used to credit service for eligibility. Participant A is over 21, hired on 1/5/2012 and terminated on 3/20/2012 (worked 300 hours). "A" is rehired on 10/25/2013. The plan is amended effective 1/1/2013 to use the elapsed time method of crediting service for eligibility purposes. When will "A" be eligible for the plan?

I've been getting conflicting responses. Please let me know if additional information is required.

Thanks!

Pardon my lack of knowledge on the topic please. Without using pension software, is there a basic excel formula to come up with a rough estimate of the annual cost of a participant, by plugging in say projected retirement benefit, years to retirement, interest rate or other relevant parameters?

the participant was illegal and used a fake social security number. subsequently with the assistance of an attorney she has obtained a real social security number and deferred action on her status. can we just transfer the funds to the new social security number?

another question is whether because at one point they were illegal is it a problem that they participated in the plan to begin with?

Owner has deemed loan. Is this a prohibited transaction?

My understanding is that a deemed loan is not a qualifying exception to the prohibited transactions because it is not a qualifying loan.

I sthis still the view of the department of Labor?

Has anyone heard of them enforcing this? Do they ignore it because they think it is an unintended consequence of the rules?

So, let's say a person terminates employment with Employer A at age 50. The exception under 72(t)(2)(A)(v), as I read it, does not allow the individual to wait until age 55, then withdraw without penalty - the actual separation must occur during or after the year in which the employee attains 55. (That's not quite what the code says, but the IRS blessed this interpretation in some guidance that I can't put my finger on at the moment.)

However, am I correct in assuming that there is nothing preventing this money being rolled to the plan of new Employer B, then when separating from service with Employer B at age 55, it WOULD then qualify for the exception? Any disagreement?

HAPPY 11/12/13 (unless you're a DD/MM/YY person and have to wait until next month).

Party at 2:15 p.m. (14:15 hours).

Hope it's a great day for you.

Would like to get others' feedback on an issue. There is discrepancy amongst professionals.

Person has an IRA that has purchased a property with a loan....presumably non-recourse (as required). Obviously, there is debt on the property as it has a mortgage/lien on the property.

Person wants to transfer the asset "in-kind" to a 401k. Normally, this would be no issue as an asset in kind can be rolled over to the 401K as a rollover. However, Section 4975(f)(3) seems to suggest that any property with a lien or mortgage on it cannot be brought into a qualified plan. This seems to be further buttressed by a 1993 Supreme Court 8-1 decision in the Keystone Consolidated Industries case....where they said, in short, that an encumbered property cannot be transferred into a qualified plan and there does not appear to be anything that there would be exceptions....for the situation I am referring to.

Thoughts? Thanks.

The October Three consulting group issued the following:

http://www.octoberthree.com/news/article/Possible-extension-of-MAP-21-interest-rate-stabilization

The gist is there may be a Congressional proposal to extend the 10% corridor to 2016. Has anyone seen mention of this elsewhere?