Quick question,

I have a plan with 3 people, two owners, one non-owner employee. All are HCE. The non-owner EE (we'll call them EE1) receives a large bonus, the owners do not. The plan wants to exclude bonus. Since all are HCE, it would pass 414(s). The plan does a 3% safe harbor to satisfy top heavy. They used to have NHCE, but don't any more, but kept the 3% SH.

As far as I know, since the compensation would pass 414(s), the 3% SH contribution on just the non-bonus compensation would be fine. Anyone disagree?

My concern is the top heavy. Does anyone know, or know where I can find, some guidance on this? Would the change of the plan definition of compensation, no longer allow the SH 3% to do double duty and satisfy the Top Heavy minimum?

What I read in 416©(2) requires 415 comp. But 416(H)(i) provides the Safe harbor contribution exception. which defines comp 401(k)(9) as 414(s).

Slightly different option(I think is simpler):

The owners really seem to like receiving their own 3%. But lets assume they didn't mind not receiving it. Is there any problem with using the ability to exclude the HCE from receiving the 3%SH?

Exclude HCE from SH

SH would satisfy ADP, owners could defer max.

Plan would still satisfy TH with SH contribution, though none would actually be given unless a NCHE was hired.

Thoughts? Something I'm missing?

A participant will be retiring later this year and is living back in Japan. He has elected a cash distribution - but the Recordkeeper cannot wire funds to a Japanese bank.

As an alternative, the Employer is asking if the retired participant can have his distribution sent to the Employer; and, in turn, the Employer has the ability to wire the funds to him.

Is this legal?

Lets say that you have a 401k plan and a 403b plan in the same controlled group. Both plans have deferrals, match and nonelective. The 401k plan can satisfy coverage for purposes of deferrals and match under 1.410(b)-6(g) by excluding the 403b plan. However lets say the 401k plan has a tiered nonelective formula requiring 401(a)(4) testing. When running the average benefits percentage test, do you pull in the match and nonelective - ie all employer contributions, even though you were allowed to exclude the match doing the coverage test? I think deferrals continue to be excludable.

Thanks for any thoughts!

Can anyone give me some feedback on the 401k Workflow Management software that is currently available in the 401(k) Market, specifically, to manage a new plan conversion process?

Any help would be greatly appreciated.

Lets say that you have a 401k plan and a 403b plan in the same controlled group. Both plans have deferrals, match and nonelective. The 401k plan can satisfy coverage for purposes of deferrals and match under 1.410(b)-6(g) by excluding the 403b plan. However lets say the 401k plan has a tiered nonelective formula requiring 401(a)(4) testing. When running the average benefits percentage test, do you pull in the match and nonelective - ie all employer contributions, even though you were allowed to exclude the match doing the coverage test? I think deferrals continue to be excludable.

Thanks for any thoughts!

Someone in my office seems to think April 15 is an important date for ADP refunds of Roth deferrals, ut they can't put their finger on it.

Leafing through (though not perusing) the EOB, I just see that Roth ADP refunds just go on a separate 1099-R from regular deferrals as the basis is not taxed. I do not see any reference to April 15 anywhere for ADP refunds of any sort.

Googling "ADP Roth Refund April 15" gave me this nugget:

http://www.ars401k.com/Roth401k.pdf

On slide 8, referring to ADP refunds, it says:

Roth 401(k) contributions would not be
includable in income, though earnings on
the contributions would be includable in
income (if refunded by April 15).

Is that right? All the other links lead to discussions on 402(g) excess deferrals, not ADP refunds.

As always, your thoughts are appreciated.

Employer sponsors a 403(b) plan that was treated as subject to ERISA discontinues all contributions prior to 1/1/09. The plan solely maintains individual annuity accounts in which the employer has no authority. It is my understanding that the assets of the individual contracts are not treated as plan assets for form 5500 reporting purposes. Does this mean that the employer does not need to continue to file a form 5500, or does it file a 5500 but indicate that the plan has no assets? It does not appear that the plan can be terminated as the employer has no authority over the individual contracts. If you think there is a way to formally terminate it let me know.

Can Employers/Trustees e-sign Plan Documents and Amendments? Is it still necessary for the Plan Sponsor to retain an original signature copy?

I met with a charter school that has had a 403b plan for about 10 years. They've always made matching contributions; and they've always considered themselves to be an ERISA plan. Their document is completed as such, and they've always filed 5500s as such.

But as a public school, I believe they should be Non-ERISA. They stated that they recently reached this same conclusion themselves, and they mentioned it to their current provider. The provider told them that since they had filed as an ERISA plan for more than five years, they cannot reverse course now and be a Non-ERISA plan.

I can't find any rule about five years. Are they stuck as an ERISA plan? Or is there some action they need to take to become a Non-ERISA plan?

Owner of Plan Sponsor (he was trustee and plan administrator) died suddenly on 06/01/13. His sole heir seems to be his son - no spouse and no other children. The son and his attorney have had ongoing contact with us and has provided death certificate and some pages from his father's trust, as well as attorney letter saying he now manages his father's company. Company has closed doors and plan is terminating. Plan is a 401(k).

We are having trouble distributing funds to participants. Monies are with AXA Advisors. They have already allowed son to roll over his father's money into an IRA - a large amount. But they will not distribute to any other participants because they will not accept son's signature as plan administrator. They have provided us with a list of what they need to appoint the son as plan administrator, and the son's response to this was: "I don't have time for all of that, I'm sorry."

I can call his attorney - which I have already done once - but of course that costs him and so I must be careful about that.

Any suggestions on how to proceed.

according to the govt web site

http://www.socialsecurity.gov/OACT/COLA/cbbdet.html

the taxable wage base will be 117,000 in 2014

if my spreadsheet still works, the covered comp will be as indicated on the enclosed spreadsheet.

...............................

based on the CPI-U that was released today the increases (should) be (based on the regulations)

260,000 for compensation

52,000 for 415 limit

210,000 for the DB limit

170,000 for key employee

covered comp at 117000.xls

Good Morning

I have an employer that would like to add an allocaiton condition to his profit sharing contribution of 1,500 hours of service. I beleive he cannot exceed 1,000 hours but I am having trouble proving this to him.

In the LRMs I can show where a non-Standardized prototype document is limited to 1,000 hours but he is looking at customizing a volume submitter.

I think it is a 401(a)(4) issue and I have also looked in ERISA 204 and regulations for ERISA 200 and have not found anything conclusive.

Any help would be greatly appreciated.

Thanks

A plan needs to fund a missed deferral opportunity and earnings - can the forfeiture account be used for this?

I think the answer is no but I want to ask in case I am missing something. A company with 20 employees is setting up a 401(k) Plan.

The 2 owners of this company also own a real estate holding llc. They would like to include the holding company in the plan so they can count the comp from both companies. I think they cannot because it is passive income. Am I missing anything?

Suppose you have a calendar year 401(k) plan sponsored by a Corporation. Also an LLC adopted the plan as a participating employer.

Ellen, the 100% shareholder of the corporation also has a 45% interest in the LLC. Her compensation was as follows:

1. Corporation W-2 = $100,000

2. LLC K-1 self employment income (adjusted for contribs 1/2 SE tax etc) = -$90,000

Question: Must the $100,000 be aggregated with -$90,000 for contribution allocation purposes? Or does the the corporation fund its contribution based on $100,000 of salary and the LLC fund its contribution based on $0?

Thanks a million.

I've been in business now for a couple years after branching off on my own after 20 years. I am really in need of a block of business at once to make my venture a true success and to be able to maintain my employees. As most know new plans just don't come in quickly enough. I'm not necessarily looking to borrow funds for a purchase but more so looking for the selling firm to finance a portion. That said does anyone have any ideas or know of an individual who may fit this.

If any of you are doing these submissions, I have to give the IRS credit for this document. Very very well done. Step by Step instructions, written in English (no kidding!).

http://www.irs.gov/pub/irs-tege/vcp_submission_kit_403b.pdf

Would you folks consider being a real estate agent a service industry? My first reaction is "no"...

But then I say to myself "is capital a material income producing factor?" Is the house consider capital? If the realtor charged an hourly fee I'd say it was service. Why should that make a difference?

Company acquires another company and establishes a qualified replacement plan under Code Section 4980. Owner of the acquired company has provision in will that provides upon his/her death, all of his/her stock in the company is to be held for his/her spouse’s lifetime, and then after the spouse’s death the shares go to the company’s qualified defined benefit plan. Are there any prohibitions on a qualified defined benefit plan receiving a bequest of stock?

Must all ERISA 403b plans allow for J&S? Or only if invested in annuities?