Ever seen both items 9 and 10 filled out on the same 5500 and if so, any guidance on being allowed to do that? I know there is next to no guidance in the formal instructions.

Apparently insurer uses one methodology on Health and Dental and the other on Vision, and thereby has no separate records of claims paid on Vision.

We are a non CSP TPA firm.

Are we subject to the 408(b ) and 404(a)(5) DOL regs?

We have been told "no".

A plan is designed with the intention of satisfying the SH Match through the basic 100%/3% + 50%/2% formula. Plan defines compensation for purposes of elective deferrals AND THE MATCH to exclude bonuses. Treas. Reg. Section 1.401(k)-3©(6)(iv) clearly says that the SH rules do not prevent you from making bonuses ineligible for elective deferrals, but then it goes on to say that each NHCE must be permitted to make elective contributions in an amount that is at least sufficient to receive the maximum amount of matching contributions. What does that mean? In the plan I've described, do you still have to test for non-discrimination under 414(s)? What if you fail?

Earlier this year, the sole-participant of a DB plan was paid out his 415 lump sum limit of about $2.3M at age 64.5. At the time, he already had 10 years of service and participation. His limit was based upon his average comp of $200,000, which was slightly lower than the $205,000 dollar limit. He is asking if there is any way for him to accrue an additional benefit. At first, I thought that he could do so by earning enough in 2013 - 2015 that his average comp would increase to $250,000. My thinking was that, since the dollar limit will probably increase above $205,000 (and, additionally, it is actuarially increased after age 65), his 2016 dollar limit would probably be above $250,000. However, it looks like, once he generates a new higher 415 limit by 2016, it will be completely offset by his 2013 payout of $2.3M actuarially increased to 2016. Am I thinking about this correctly?

Any help would be appreciated!

company A and company B are members of a controlled group. Both have their own 401(k) plan. one is safe harbor. one is not. Smith is an HCE on the payroll of each company. he only makes salary deferrals in one plan but, could defer in both.

in doing 410b testing for one of the plans you typically use a numerator of that plan's benefitting hce employees and divide by the total number of hce employees of the entire controlled group. But, would you count that hce as an employee one time or two times in determining the denominator?

we cant do permissive aggregation because one plan is s/h and one is not. However, I know that for the adp testing you have mandatory aggregation of HCE's for adp and acp testing.

Is there some sort of mandatory aggregation of HCE's for 410b testing purposes? And, is the HCE counted as one employee or two employees of the controlled group?

I would appreciate any citations if possible.

Thank you!

I have a client who is age 70 in an ERISA 403B plan. I believe he can take a distribution of a portion of his account balance and roll to an IRA plan with me to further diversify his investment portfolio.

Can he also rollover into a 403B account with a new investment organization ?

The reason I am asking is that he even thought he is the executive director of the organization he is probably not required to take RMD's since he is not a 5% owner - correct ???

So if he rolls to an IRA hew will have to take RMD's I believe.

If he rolls to a new account titled as a 403(b) can this avoid the RMD requirement until he retires down the road ??

Thanks !

With all of the recent changes, I wanted to make sure I have the most recent information regarding a cafeteria plan sponsored by an S-Corp.

Are the greater than 2% shareholders still ineligible to participate under a cafeteria plan?

Under the attribution rules, are the spouse, children, grandchildren and parents of a greater than 2% shareholder still ineligible to participate under the cafeteria plan?

Thank You.

I've been asked to consult on a plan that did not withhold deferral contributions on bonuses and commissions, although the plan says that elections should apply to all compensation. They're already about 90% done with the process and called me in to review and help implement the corrections (it's a former client that left on good terms and they know me/us as being able to cut through the lawerly BS).

So, they've calc'd the "missed deferral opportunity" as 50% of the "missed deferral" as per Appendix A.05(5)(a). And the match on the missed deferrals. But just for the sake of finding the cite that I just noted, I went back to the ".05" part and it says this:

.05 Exclusion of an eligible employee from all [my emphasis] contributions or accruals under the plan for one or more plan years.

As emphasized, it says "all." These folks weren't excluded from all contributions. (And by the way, none of them said a word about it. And also FWIW, at least one election was verbal, and perhaps there was implied consent since no one complained...?) Would it be reading this too literally to say that this isn't the right section, and that it doesn't actually need correction, or perhaps some other correction?

FWIW this came up on the CPA 5500 audit; they just noted it but didn't say anything about correcting it.

i do not have 415 mastery on my bucket list so please

forgive my ignorance in asking this question..

suppose participant retires under 100% comp limit in year x and

plan contains 415(d) cola adj language for years after

termination(x+1,x+2,etc.). if plan is subsequently terminated in say year

x+3 and the participant with spousal consent now elects lump sum.

Must the lump sum be based on the comp limit back in year

x or can it be based on the adjusted limit?

Supposed to only be integrated with employer group health now(?) Does this apply only to employer contributions such as in employers offering it as a "stand alone" or can employees only contribute to a PRA without the employer offering group health? Not sure I quite understand DOL Tech. Rel. 2013-03 and IRS Notice 2013-54.

Assume a safe harbor 401k plan is cross tested and each person is in a separate class for allocating profit sharing. The plan is then amended to allow prevailing wage contributions for certain employees who work government contracts. According to the plan document, these Davis Bacon contributions are considered QNECs. As such, may they be used in the 401a4 general test? Does this answer change if a defined benefit plan is added to the mix (even though most of the prevailing wage workers won't qualify for it)?

I have a large 403(b) client (with ERISA coverage) that is the fiscal sponsor for an additional small not for profit organization. In the Past, the small not for profit organization has employed a couple of people on a short term basis and paid them as 1099 payees. The small not for profit now wants to hire 2 full time employees and has asked my client if they could add them to their payroll, and then reimburse them for the costs of payroll, taxes, and healthcare.

These individuals would not be employees of my clients 403(b) organization, but they would be on their payroll and I could see them being perceived as employees by ERISA/IRS. Would they then be eligible for my client’s 403b? Or is there a way to set them up as a certain class of employee so that they would be disqualified? And same for the discretionary non-elective contribution? They may or may not stay on the Payroll for a year or more. Any help on this one would be appreciative

existing plan ran 3 months and then switched to a MEP.

5500 filed filed for the 'short' plan year.

does that also create a short plan for testing, or is that still done over a full 12 months?

One of my clients is being told that they had been filing each year with their annual 5500 form and SSA form, references Plan Sequence # 001. The problem is that this plan is now terminated and when they went to "electronically" file the SSA, it stated that this plan number was a "duplicate". The reason being is that they have a DC Non=Represented plan, 095650, also references a Plan Sequence #001.

The client wants to know if they can retroactoively amend the 401(k) Plan document to state a different Plan Sequence # effective 1/1/12? What is the correction method? and can it be corrected through SCP or VCP?

Dear Ms. Munnell:

You may wish to apprise your readers that neither Congress nor the Social Security Administration has altered the promise. The delayed retirement increase was envisioned as a sweetener not as a take away. It became 8% a year in 2008 as part of the 1983 amendments to the Social Security Act.

That's 1983! 25 years advance notice should not be viewed as dropping a bombshell. Where ya been?

Frankly, you're the first person who has even suggested that starting benefits at SSNRA is tantamount to claiming benefits early.

Truly, the only protection is needed is from propagandists who wait 25 years to spin a dark web around the Social Security Program. To insinuate there is something duplicitous going on is shameful. Perhaps your time would be better spent devising educational means which responsibility you've conveniently delegated to that nebulous group called the Policymakers.

Our (Datair) document defaults to impose a 1 year marriage requirement before a spouse is deemed to be a "Spouse" for QJSA and QPSA consent requirements. We have some clients saying it is difficult to administer this; e.g., distribution paperwork asks 'Are you married'; not 'Have you been married for 1 Year'. The clients want us to amend their plans, but first, want to know whether the 1 Year rule is the common approach or not.

I will greatly appreciate your responses as to your approach and your thoughts about how the industry in general draft their plans.

Thanks.

I have a plan sponsor client that wishes to make their Safe Harbor Non-Elective Contribution using the following formula: 4.5% of regular comp, plus 2.25% of bonus compensation. The plan document vendor has them on a volume submitter plan - not sure if relevant - and they are reluctant to provide their "blessing" of the formula, which would be in the addendum as a write-in fixed formula, rather than a modification to the plan's definition of comp for the SH NEC. A rough calculation of the 414(s) Compensation Test results in the HCEs with a lower average compensation percentage than Non-HCEs, however I am not so sure it passes the prerequisite "Reasonableness Test." If it was okay, does this formula need to be cross-tested?

Unfortunately, I can't quite get anyone to give me a straightforward answer on this. I am leaning towards suggesting to the client that they simply exclude or include 100% of bonus and be done with it, rather than trying to thread the needle. Thanks!

Learn:

http://www.bulldog.u-net.com/avogadro/avoga.html

and groan:

http://metevil.tripod.com/moleday/jokes.htm

Doctor "Smith" is in a medical group professional corporation with 20 other physicians. They have a profit sharing plan ( not a 401K) and they put in the maximum for each doctor yearly ( $51,000 ). All employer funded.

Smith also has some 1099 income that he gets from a local Hospital Association. He set up a Solo K Plan for this income and he defers $22,500 into it yearly.

Is this allowed ? Can he make a profit sharing contribution to the Solo K plan on $30,000 of net schedule C income also ??

Thank you !!

If a DB plan is close to failing testing and you get the "what happens if we fail" question from a client, you can generally say that the IRS can disqualify the plan and the contributions will no longer be deductible. That usually gets them to comply. But what if the client is a not-for-profit? If the plan is disqualified, what are the implications? Is it just possible benefit restrictions, which the client may not care about? Has anyone run into this kind of situation?