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?

Under IRC 411(b)(1)(H) a defined benefit plan must generally pay an actuarially increased benefit to any participant who delays retirement beyond normal retirement age. (I know some exceptions apply, but that is not our issue here.)

I would assume that the plan's definition of actuarial equivalency would need to be the same for all participants, including those who are beyond normal retirement age, but honestly I'm not sure. If the actuary deemed the assumptions to be reasonable, could a plan adopt a different set of equivalency factors for those who have reached NRA?

This causes me concern because of 411(b)(1)(H)(i) which prohibits a reduction in the rate of benefit accrual because of the attainment of any age.

Thanks in advance.

If a withdrawn employer has been assessed a specific amount as its withdrawal liability, do you treat that amount as a plan asset (receivable) or just treat each payment as a contribution at the time it is made?

Background: A davis bacon/prevailing wage employer has for some years mades contributions to an HRA/VEBA and has taken prevailing wage credit for those contributions. Along comes Notice 2013-54. With exeptions not relevant in my situation, 2013-54 requires HRAs to be integrated with an insurance plan to avoid ACA annual limit prohibitions. To be integrated, 2013-54 requires the HRA to give participants the option to permanently waive future reimbursements (essentially forfeiting their account) each year and on termination of employment. I have questions about how the waiver/forfeiture interacts with davis bacon and similar prevailing wage laws.

Issue: Whether an employer can take prevailing wage credit for contributions it made to an HRA on behalf of an employee, if the employee voluntarily waives all future reimbursements (essentially voluntarily forfeiting those contributions)?

Does anyone have thoughts or guidance on this? Are there other examples where an employer can take prevailing wage credit for waived/forfeited amounts?

Client has a straight Profit sharing plan. Client is a doctor's office that is joining with 5 other doctors offices in 2014. Client intends to terminate the plan as of 12/31/2013 but would like to make a profit sharing contribution for 2013. Does client have until the normal deadline of 3/15/14 to make the contribution?