403b plan covers only HCE's, and 401k plan excludes HCE's. Both plans have uniform match. I assume I can aggregate the ACP Test? Both plans provide for same nonelective contribution, which I assume would still be able for the design based safe harbor (or at least aggregation is permitted for testing, which will pass because everyone has same allocation rate)?

403b Plan effective 12/1/2013, with a pye of 12/31/2013. My concern is that the 415 limit would have to be prorated down to $4,250 plus catch-ups of $5,500. OK, I can generally avoid by making the plan effective 1/1/2013, but is that possible in a 403b plan (i.e., a retroactive effective date)?

I have a plan (actually two) where the prior actuary designed the plan so that the interest crediting rate was initially equal to one of the safe harbor indices (plus margin where applicable).

In the case of those Plans, as interest rates dropped, the prior actuary put in a fixed floor rate in the plans so that no violation of the 133 1/3rd rule would occur if the interest rates dropped.

Fast forward to today, the regulations for rates provide a similar or same list of safe harbor rates, and under 1.411(b)(5)-1(d)(6) describes that a plan violates the safe harbor if it uses any combination of the greater of rates in the safe harbor (which are those bond indices, 3rd segment rate, and a fixed rate that has the comment [RESERVED] after it).

The rules about acceptable combinations of interest rates in 1.411(b)(5)-1(d)(6)(ii) describe acceptable combinations of bond rates with an annual floor, and the comment after it is again [RESERVED], and no guidance is provided.

The past couple of years, the fixed rate specified due to the 133 1/3rd rule is higher than the t-bill and short t-bond rates plus their margins (it is about 2% - the floor in each case for the interest credit rate).

Does anyone know when the powers that be are going to specify an acceptable annual floor, or if they will, under 1.411(b)(5)-1(d)(6)(ii)?

Plan has brokerage account setup where each participant works with his / her own broker (approx. 30 some different brokers working with about 50 participants) -

Non-terminated participant (a 30-something) - requested directly from his broker a distribution from his 4 plan - no distribution election forms were made, no other forms of distribution can be taken (hardship, loans, etc.) - so the participant was ineligible altogether from taking the distribution - never let the TPA or his company's HR know he was taking the distribution which was discovered on receipt of monthly brokerage statement cc'd to the TPA -

how do you correct under EPCRS - it's 1 person, $200k account in a $15MM plan - so relatively speaking it's insignificant... SCP and just get the money back? VCP and just get the money back? - and then if the money can't be returned (if it was used to buy a fancy speed boat) - does the sponsor just show they made reasonable effort to get the money back?

Thanks

In the process of preparing a loan form for one of our platform 401k providers, it appears they deduct the loan processing fees from the loan check, thereby netting out the amount a participant will receive. ie a person requests a loan for $5000 but receives a net check of $4900 after fees are deducted for processing. however the platform deducts their loan maintenance fee quarterly directly from the participant's account on the 401k platform.

How is this correct when it was my understanding that fees are not taken into account for tax purposes when receiving a distribution from a plan but a participant is somehow obligated to repay the administrative fee to the plan when taking a loan. The platform is also including any express mail delivery fees to be deducted from the loan check amount as well. If the participant has no ability to receive this $ in the actual loan, why are they obligated to repay it as part of their outstanding loan ??

Anyone aware of a discussion of impact of ACA on the future of welfare plan 5500 reporting?

I have the situation below: I have determined this is an Affiliated Service Group.

Company A Company B
Employee 1 Employee 1
Employee 2 Employee 2
Employee 3 Employee 3

Employee 2 owns 0% of Company A and owns 10% of Company B. He is not an officer of company A and is not an employee of company B.

Because of required aggregation for Top Heavy is he a Key Employee?
I have seen in the regs that a person must be an employee to be a key and therefore he is not a key. I have also seen some language that says ownership will transfer to company A making him a key??

Thoughts?

We have a client that reinstated their match in the middle of the plan year. The employer would like to add an additional discretionary match now that their plan year has completed. Is it possible to only include the period of the plan year in which the employer reinstated in calculating the discretionary match amount?

Thanks

I have a client with employees in California. They generally don't provide medical coverage for same-sex spouses, but they just got a request for a California employee. If California employers offer spousal coverage, do they have to cover same-sex spouses or can they limit coverage to opposite-sex spouses.

Any thoughts would be great. Thanks!

I'm inclined to think this is ok, but thought I'd solicit opinions.

Client establishes a DB plan at age 62, with NRA of 65/5. One-person plan. Anticipating huge income for three years, then income dropping off.

At age 65, decides she is tired of it all, and closes up her business to retire, and wants to terminate the plan.

I know this is a "facts and circumstances" issue, but my inclination is that this should be an acceptable reason to terminate. Any thoughts?

Hello,

Is a distribution from an LLC to a member (owner) a permissable basis for making a deferral or employer contribution to a tax qualified retirement plan?

Thanks for the help!

Is this forum still being monitored? I have some questions about fee processing on Relius Admin and could use some help from my peers. Thanks.

Here's the notice.

http://www.irs.gov/pub/irs-drop/n-13-71.pdf

Why can't the Service issue anything without complicating other things?

Participants can now roll over up to $500 to a new year, but the exceptions and restrictions make it almost useless.

Just came across a new 403b client that has a contribution formula that says:

< 3 years = 0%

4-6 yrs = 3%

6+ years = 6%

Seemed like a sneaky (maybe illegal?) way to get over the 2 year eligibility requirement. But if the plan can pass coverage testing at the three benefit levels, is this okay? Thanks.

It looks to me like this is the end of any type of individuly health policy being pre-taxed through a Flex Plan. Does anyone see this differnetly--I hope?

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!