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!

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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?

i am 44 and is currently planning to buy a long term care insurance. since this is insurance companies we are talking about, they'll pitch every excuse just to excuse on the insurance you've paid half your life. my question is, what are the diseases that encompasses ltc insurance? i know about the mobility disorders like

http://www.simmons.edu/offices/disability/faculty/specifics/mobility.php

http://www.resourcesonbalance.com/clinical_info/prevalence/index.aspx

http://www.disabled-world.com/disability/types/mobility/

http://www.healthcentral.com/channel/408/1276.html

any more? i want to be sure before even buying one

Hi,

I'm new to this forum, but would much appreciate any advice you might have regarding my situation. I recently received a letter from my employer and their 401k administrator stating that they found a mistake calculating my eligilibity for a company match contribution back in 2008. They have reviewed their records and determined that I should have been eligible for a company match back in 2008 but due to a mistake with calculating my Program Eligibility Date, I was not eligible for a match until 2009. So I missed out on the entire company match for 2008, which is on the order of $6K. According to the letter, they have consulted with the IRS and have deposited the $6K into my 401K using the investment elections I had on file back in 2008 and "all corrective contributions received applicable investment experience which was calculated and added to your account in accordance with the direction by the IRS." Does this "investment experience" refer to investment gains since 2008? I'm not sure what "investment experience" means in this context...but from what I can tell, the $6K does not include any investment gains since it's consistent with my yearly % match based off my salary.

Back in 2008, I distinctly remember asking my manager if I would be eligilble for the 401k match and him saying he would investigate (probably asking HR) and finding out that I was "not eligible". While I am glad that this mistake was found (better late than never), I'm concerned about the lost investment gains that I would have accrued had this match been deposited back in 2008. My investments have probably gone up by at least 50% since that time due to the stock market increases since the 2008 market bottom, thus $6K in 2008 would be at least $9K now.

My question for the experts on this forum is how to best handle this situation. According to my 401k adimistrator there is an appeals process that I can follow which involves my writing a letter to request the appeals dept to review my case. I need to explain my situation and suggest a desired outcome. I know next to nothing about the laws and rules that govern 401k's or how they handle late match contributions like my case. Assuming I write this appeal letter, what outcome should I request? Can I ask for the lost earnings that would have accrued if my match had been deposited on time? How does one even calculate such earnings since it would require a detailed knowledge of my investments back in 2008 and look at stock/fund closing prices for each pay period in 2008. One final point is that I doubt I am the only employee who is affected by this mistake, so while other employees might not write an appeals letter, any revised decision on my case might force equal treatment for the other similar cases.

Thanks for any advice on how to best handle this!

When a co-employer terminates its relationship with a professional employer organization and discontinues participation in a multiple employer plan maintained by the PEO, does a severance from employment occur, thus triggering a distributable event under 401(k) for the individuals that are still employed by the now former co-employer? My thoughts are that this is a severance from employment because the employees of the former co-employer cease to be employees of the PEO that continues to maintain the plan.

Any other thoughts? Is anyone aware of any IRS guidance relating to this scenario?

Thanks.

A nhce/non owner participant terminated Feb 2013 at age 74. In March she subsequently rolled over her account to an IRA. Later in the plan year she received a deposit into her former employer's 401k equaling the 2012 employer receivable. She still has a small balance in her 401(k).

Is the plan responsible for issuing her a 2013 RMD or the IRA?

Is a last day requirement for a discretionary New Comp allocation negated when the plan also has 3% safe harbor contribution when the required gateway contribution is above 3%?