Have a situation where the 2 Trustees retired. There is not a Board Meeting until April and the new Trustee to be doesn't think we need this Consent Actions of the Board of Directions, in lieu of a Meeting and Amendment placing him as Trustee because the chairman of the Board told him he shouldn't be required to do anything and he's a very smart attorney, the chairman I mean, lol. Just kidding but that's seriously what the Trustee to be told me.

All because the Consent of Directors says by Unanimous Consent, in lieu of a meeting......

Honestly I am not document strong but how can I explain that this is required in order to amend the plan and this Consent of Directors is what is done in lieu of the meeting. Are they supposed to email this to all the Board members? I only have the President signing this Resolution by the way, not the entire board and the Trustees and President signing the Amendment.

Help.

Safe Harbor 401k Plan with 3% SHNEC going to the ESOP. May I permissively aggregate the 3% SHNEC going to the ESOP with a 6% profit sharing going to the owners in the PS Plan? Assuming of course I pass rate group testing. Both Plans are sponsored by the same employer and have the same plan year.

[originally posted in ESOP section]

Facts

----------------------

A CB Plan effective 1/1/2011, failed to meet its 2012 funding due on 9/15/2013.

The Plan was frozen early enough in 2013 that no accruals occurred in 2013.

The client paid a penalty for the 9/15/2013 under funding.

95% of the cash balance contribution will go to the two owners.

The would like to pay it to avoid any more penalties but intend to continue the freeze.

They believe they can pay it over two years starting 1/1/2014.They understand that interest is due on the contribution.

Questions

---------------------

What options do they have in paying the underfunding?

Is it due in its entirety by 9/15/2014.

If not paid by then will another penalty accrue?

Can they "pay it out" over a couple or three years without additional penalty.

Can a plan sponsor limit non residential loans to 50% of the vested account balance up t0 $30,000

and residential loans to 50% of the vested account balance up to $50,000?

They wanted to reduce the 50% for non residential loans, but that I would say is a no!! Just not sure if the IRS allows the plan sponsor to reduce the maximum $50,000 amount.

Thank you

Plan has been safe harbor since 2003 and plan documents prior to EGTRRA restatement were correctly prepared.

Bundled provider botched EGTRRA restatement and didn't check all the correct boxes for safe harbor status. Interestingly the provider administered the plan "as if" it was safe harbor until they discovered document error early in 2013.

What is the best way to fix the document problem? Can we prepare a "correct" EGTRRA restatement now and submit as a late amender under VCP? Seems like being late would be better than being wrong.

Thanks.

I am completing a Form 5330 for a Section 4975 prohibited transaction between a disqualified person and a SEP-IRA account. When filling out the top part of the form, I am not sure what to enter for "Plan number" because I'm not familiar with SEP-IRA arrangements that have a "plan number" (as would a qualified plan). Any ideas?

When applying the otherwise excludable rules, there are 3 ways to apply it. (Statutory, Plan Entry, or Beg of Year/6 monts)

Let say in year 1-The ADP & Coverage tests were completed using the Statutory option for applying the OE rule. Plan passes ADP & Coverage.

The plan uses prior year testing.

Year 2: Plan still uses prior year testing, so the average used for ADP is based on Statuory, but if in year 1 the plan had used the plan entry method, the NHCE ADP average would have been higher. Would you need to go back and run coverage in Year 1 using plan entry to be able to use that NHCE ADP average in Year 2?

Hello,

I administer a 401k plan in a corporate envirement. To improve efficiency and keep the costs down, we are looking at outsourcing the administration of the incoming DROs from employees. Can anyone recommend companies that do this (we are already looking at QDRO Consultants)? Thank You!

Company wants to start a plan where the employee could elect to either have the premium paid by the employer or the employee could receive an amount of money in cash that was slightly less than the premium payment. Is this permissible under a Section 125 Plan?

I am looking at a cash in lieu option in the 125 Plan checklist, but am not sure if this is permissible. Thank you

Company applied for a Distress Termination under the business continuation test. PBGC approved termination in 2013 and has assumed Trusteeship with a Plan termination date of 2012. PBGC has not yet demanded payment for unpaid contributions and unfunded liabilitiy, but has sent a package asking them to complete the form for termination premium payments.

If there is now a transaction with the company that would be a PBGC reportable event, is there still an obligaton to report? The purpose of reportable events is to give the PBGC warning that a distress termination might occur. Here it already has. But I don't see any exception - is there one?

Company was not in bankruptcy at the date of termination, has not filed since, and is not intending to file for bankruptcy.

Participant dies in 2013. He has been taking RMDs but did not take the 2013 before his death. Spouse receives his 2013 RMD. Plan admin said if deceased participant's acct bal comprised of employer securities was distributed to the spouse as beneficiary in 2013 the taxes on the net appreciation on the employer securities could be avoided. Is this true? The distribution had to be a lump sum that was paid in one calendar year. Does her receipt of her spouse's RMD count as part of her lump sum distribution or is it a separate issue and she can take her lump sum distribution as beneficiary in 2014 and be eligible for the net appreciation exclusion? Obviously time is critical, so any guidance will be greatly appreciated.

I've seen some threads on this, but I can't seem to find any that directly answer my question. Assume that overpayments were made to 401(k) participants as a result of the application of an improper vesting schedule. The custodian issued 1099-Rs for the total distribution (including the overpayment). I am comfortable with the EPCRS correction procedure for this error (which includes the plan notifying the participant that the overpayment is not eligible for rollover and asking for the return of the overpayment [and if not returned, plan needs to be made whole]), but, I'm struggling with the tax reporting.

Assume for purposes of numbered paragraphs below that the distributions were not coded as direct rollovers:

1) Should the plan instruct the custodian to issue amended 1099-Rs to reflect the correct amount of the distribution and issue a 1099-MISC for the overpayment amount?

2) Alternatively, should the plan only issue amended 1099-Rs if the participant returns the overpayment? Under this approach, the plan would do nothing unless the overpayment is returned.

If the distributions were coded as "direct rollovers," I believe the plan would have to issue an amended 1099-R to reflect the amount eligible for direct rollover and the amount not (i.e., overpayment).

Any thoughts would be appreciated.

I have an orphan plan in which there is one participant account. The participant is the former sole shareholder of the plan sponsor which dissolved several years ago.

I have read about the orphan plan procedures under the DOL regs and under EPCRS.

The DOL rules seem to focus on insulating the custodian of the plan assets from liability while the EPCRS rules focus on ensuring the qualified nature of the plan assets.

My client is the plan participant. Since he is not the custodian, may he just correct under EPCRS or must he also convince the custodian to follow the DOL regs?

The EPCRS rules say they don't apply to a plan that has terminated pursuant to the DOL regs.

I am confused as to whether one or both procedures must be followed.

Any assistance is appreciated.

Is a RMD required to be processed before a rollover out of the plan is processed?

e.g.

Participant DOB is 11/1942

Retired on 04/2013

Sent in paperwork to roll to an IRA in 08/2013

I realize that the RMD can be delayed until April 1, 2014 to take the 2013 RMD and then the 2014 must be taken before 12/31/2014.

The question is do we have to process a mandatory RMD before the request for rollover is processed?

And does it matter if the plan is a 403b vs a 401k?

The plan doc does allow for the later of 70.5 or retirement.

Partners[who all get K-1's] want to amend Safe Harbor k-plan definition of w-2 to exclude bonuses. I was under the impression that a Safe Harbor plan had to use 415 comp definition.

I've now been told what I believe to be wrong information by 2 record keepers, causing me to question myself.

If a plan has used the 80/120 rule to delay audit requirements at some point in the past, must they continue to be audited until they fall below 80 participants or is it just below 100?

This Cash Balance Plan missed its 9/15/2013 funding of its plan. Froze benefits in 3/13. Paid a $40k excise tax on 9/15/2013 for missed 2012 contribution.

Is terminating today with 204h NOIT, so a 3/1/2014 term date.

Owners have 95% of all balances, and will waive benefits to be sufficient.

They will not pay 2012 funding 2013 funding, and will be a sufficient termination and do not want to fill w/IRS for a termination LOD.

If the Plan goes away on 6/1/2014 and is distributed, there will be no plan to make funding for the missed 2012 and 2013 funding.....I'm nervous about the excise tax issues here for 2012 and 2013...any thoughts????????????

A "senior" lawyer recently became employed by our firm on a full-time basis after leaving his prior firm due to its mandatory "retirement" policy (age 70). He reached age 70.5 in the second half of 2013. He will be rolling his 401(k) plan account from the prior firm into our 401(k) plan. He intends to work for several more years (believe it or not !). He will not be a 5% owner of our firm.

Although he has "retired" from his former firm, he has not "retired" from the practice of law. He would prefer to avoid receiving a RMD for 2013 (which, if required, would need to be received by April 1, 2014).

Sal Tripodi writes in his respected ERISA Outline Book that "Presumably, retirement means that the employer-employee relationship with the employer that maintains the plan has ceased." He also notes, however, that "Nowhere in §401(a)(9), nor in the legislative history or any of the regulations is retirement defined for §401(a)(9) purposes . . . ." See Chapter 6, Section VII, Part B.1.e.

We believe that a strong argument can be made that the policy behind the the SBJPA provision permitting RMDs to be delayed for those who are not 5% owners was to avoid forcing employees (other than 5% owners) to receive RMDs while they were still gainfully employed. Thus, we would assert, where the individual continues gainful employment with another employer (particularly in the same field) there should no "retirement" for RMD purposes.

I would be most interested in any thoughts on this question.

P.S. Incidentally, it appears that even if an RMD is required for 2013, none would be required for subsequent years until the year of "retirement" from our firm (assuming such retirement also encompassed retirement from the practice of law). Rev. Rul. 2004-12 (once rollover funds hit the recipient plan they take on the character of the recipient plan).

A participant completed a form mid October requesting to suspend his 401k contributions. The employer received the form and "entered it into their system" so he is shown as 0% in their records. Yet on payroll he is still deferring. They have successfully shut him off for the first pay in January. Even though there is one more December payroll, it is too late to turn off the 401k so he'll have one more payroll deduction.

Is the stopping in January enough or should a refund be issued for the payrolls back to when he signed the suspension form? Since we do not know the final December payroll amount, I presume the refund would be processed in January (and count for 2013 income). All of the excess payroll withholding will still be counted in 2012 testing. Correct?

Facts: Plan document allows for hardship distributions from the deferral source only. A participant (NHCE) received more than the basis in his account at the fault of the TPA. The distribution happened in 2013.

Question: If the participant repays the overpayment, is the repayment credited back to his account OR put into an "unallocated" account to be used to reduce future employer contributions?

I read Section 6.06(3) of Rev. Proc 2013-12 (EPCRS) where it states that the repayment be placed in an unallocated account which is a separate account that is not allocated on behalf of any participant or beneficiary established for the purpose of holding the Overpayment, again adjusted for Earnings, to be used to reduce employer contributions (other than elective deferrals) in the current year or succeeding year. It is not clear to me whether the repayment by the PARTICIPANT rather than the actual employer or another person would affect the method of repayment (restore to participant's account or put in unallocated account).

Any opinions on the interpretation of Rev. Proc 2013-12 or maybe some practical experience with this type of failure to share?

Thanks,

QNPG