PEO takes on a new payroll client who will be signing on as a participating employer in the PEO 401(k) Plan. The client has an existing 401(k) plan with another vendor & payroll company.

Does the client transfer or terminate the other 401(k) plan? I'm thinking specifically of the successor plan rules. Do those apply in this instance?

Thanks in advance.

401k plan permits SDBA for ALL employee, but most people (including all NHCE's) leave their money in the regular mutual fund only platform. The recordkeeper will allow in-kind transfers on the SDBA's but of course not on the regular platform.

I am assuming that even though only owners/HCE's have their money in SDBA's that it would not be discriminatory to amend the plan to provide that "in-kind transfers of securities is permitted for the Self Directed Brokerage Accounts.

I work for a TPA firm who administers a 401(k) Plan whose sponsor was sold September 20, 2013, the terms of which are unknown to us. During the process, the plan trustee elected to terminate the plan. Plan termination became effective October 1, 2013. Plan participants were paid out, with most of them receiving cash distributions.

We are now being contacted by the purchasing company's TPA, They are stating that the purchase involved a stock split and that the plan should not have been terminated. They are requesting information about participant distributions and stating that the plan may need to be "made whole."

The only information I can find concerning a stock split describes company stock and has nothing to do with assets in a 401(k) plan. The 401(k) plan contains no company stock.

I would appreciate any insight anyone can offer.

Participants in the plan are eligible upon hire.

An individual's start date is 12/30/2013.

The participant will have no W-2 wages for 2013 since the hours worked were after the employer submitted his last hourly payroll for 2013 to the payroll provider. The hours worked will fall into the first pay in 2014.

So despite the entry date, would the person receive TH minimum for pay earned on 12/30 and 12/31? My thought is no since the document states that compensation is defined as compensation for a Plan Year for which the Employer is required to furnish the Participant ... Form W-2 - I'll have no 2013 W-2 for this individual, therefore no pay.

Any others have different thoughts?

Just looking for thoughts, opinions? New clients' prior 5500s seemed to use Schedule A Part IV item 11 liberally and check off Yes with ease when that was not the case. Think it should be amended and if so all the way back to 2009? To what extent is the IRS following up on this question? if they do, to what extent do they identify to insurance companies those plan sponsors who checked off Yes?

I am working on a DB where the only participants are a doctor, his wife, and a terminated employee. The terminated employee completed a distribution form to have the lump sum value of her benefit rolled over into an IRA. I have contacted the financial institution that holds the plan assets and they said that they need a letter of instruction mailed to them that is signed by a trustee (either the doctor or his wife) and that has a medallion signature guarantee provided by a bank. I drafted the letter of instruction and provided it to the doctor's wife. However, she explained that she and her husband are currently preoccupied with an urgent family matter and she doubts that she will be able to get to a bank this week. If she doesn't get to a bank until Monday, the financial institution surely won't receive it until December 31, and the rollover won't occur until 2014. However, the terminated employee knows that, if delayed until 2014, the lump sum will probably go down, as the December 2013 417(e) segment rates will need to be used (instead of the December 2012 rates). Is there any way to use the assumptions prescribed for 2013 if the actual distribution doesn't occur until 2014?

Any thoughts would be appreciated!

Does anyone know of where we might find some sample notices we can provide our clients to notify employees of implications of Supreme Court's decision re DOMA and same sex marriage? We have prepared a notice for our clients, but some have asked for samples to provide the participants.

NHCE ADR is 5%, so HCE can defer 7% plus $5,500 catch-up.

HCE has already deferred $22,500. Let's call his compensation $150,000. So, he's only allowed deferrals of $16,000.

From what I read, I can not refund before year end.

So, the question is, does the 2013 W-2 show Box 1 wages of $127,500 and Box 12 deferrals of $22,500? And then, in 2014 there's a Form 1099-R with the refund (plus earnings) of $6,500?

Plan's original effective date is 1/1/2006. Plan is going to terminate 12/31/2013, and possibly be submitted sometime in 2014. Is it exempt from the IRS user fee? The instructions on the 5310 aren't exactly clear.

The exemption from the user fee applies to all eligible employers (defined below) who request a determination letter within the first 5 plan years or, if later, the end of any remedial amendment period with respect to the plan that begins within the first 5 plan years.

A determination letter application that is filed by an eligible employer meets the requirements for exemption if:

(1) the application is filed no later than the last day of the submission period for the plan's current remedial amendment cycle under Rev. Proc. 2007-44, and

(2) the plan was first in effect no earlier than January 1 of the tenth calendar year immediately before the year in which the submission period for the plan's current remedial amendment cycle begins. (If the plan was first in effect before this date, but the application is still filed within a remedial amendment period that began within the first 5 plan years and you are an eligible employer, complete only the

Certification and attach an explanation of how your application qualifies for exemption under section 7528(b)(2)(B).)

Example.

An employer maintains an individually designed plan first effective on July 1, 2001. Assume that the plan's 5 year remedial amendment cycle is Cycle A. Therefore, the submission period for the plan's current cycle ends on January 31, 2012. Assume that the employer files a determination letter application for the plan on January 31, 2012. If the employer is an eligible employer, the application is exempt from the user fee requirement because the application is filed by the last day of the submission period for the plan's current remedial amendment cycle and the date the plan was first in effect (July 1, 2001) is not before January 1, 2001 (i.e., January 1 of the tenth calendar year immediately before 2011, the year in which the submission period for the plan's current remedial amendment cycle begins).

Notice 2013-74

(In Plan Roth Rollover)

this recently released Notice contains guidance on whether you can change a safe harbor mid year. Interesting, yes you can change the safe harbor mid year to add a Roth rollover but only if adopted by the end of 2014. I'd note, this really has nothing at all to do with the safe harbor itself, yet they are saying this is only temporary. normally you wouldn't be able to change a safe harbor mid year. just when I thought they might be taking a softer approach to mid year changes.

Q 5 (b)

In accordance with § 1.401(k)-3(e)(1), this notice provides a temporary period during which sponsors of safe harbor plans are permitted to make a mid-year change to provide for in-plan Roth rollovers of otherwise nondistributable amounts. The period ends December 31, 2014. Thus, in the case of a § 401(k) safe harbor plan that has a calendar-year plan year, in order for the plan to permit an in-plan Roth rollover of an otherwise nondistributable amount during 2013 or 2014, a plan amendment providing for that option must be adopted by December 31, 2014.

Plan has quarterly entry dates and compensation prior to entry date is excluded. Plan is top heavy, so participant needed an additional top heavy minimum based on annual comp. Can I still use the 414s compensation for the average benefits and general test?

thanks

Assuming a controlled group has elected qslob status for its separate lines of business and, their separate dc plans, what are the annual testing requirements...

410b tested separately for each qslob ?

401(a)(4) and/or adp testing separately for each qslob?

top heavy testing on a controlled group basis (not tested separately for each qslob)?

gateway test on a controlled group basis?

A participant is a 1% owner and in prior years was considered a Key employee because of his compensation. His compensation last year (the determination year) and this year (the allocation year) is not sufficient to make him key. Is he now simply a non-key employee and requires the TH minimum?

Client did an internal audit and discovered they owe compensation to a few terminated employees. The employees terminated two years ago. The client is now going to pay them for serivces rendered during the time of employement. This is not severance pay, they just did not pay them their full compensation.

The question is, do you apply the deferral election form that was in place? I don't think so because they are now termed??

Is there a corrective distribution that needs to take place? The compensation has not been paid yet, so I don't know what the correction would be. I don't think you have a missed opportunity correction.

Any thoughts?

Thanks

The participant is lost. The client has tried to find them using a locator service and the internet. His vested balance is under 5k. The client does allow forceouts to an IRA. This is a new Plan to us in 2013. His RMD should have started in 2011. Nothing has been processed, since he is lost.

Any suggestions?

I have a calendar year safe harbor match plan. The client wants to terminate the plan as of 12/31/2013. Can they do that or must they issue a 30 day notice and terminate on the 30th day which means they would need to fund the safe harbor match for anyone who defers in January, 2014. Thanks.

Can you have a SEP with alternative eligibilty requirements? For example, an employee is eligible to participate if EITHER -

(a) the employee has performed services for the employer in 3 out of the preceding 5 years, OR

(b) the employee is hired on a full time basis (40 hours per week), other than on a temporary basis.

Alternative (a) satisfies 408(k). Does alternative (b) cause a problem?

The goal is to exclude interns and other temps.

Owner/participant age 70 wants to start DB plan. Does not have prior plan.

Can RMD be delayed to age 73 with 3-year cliff vesting and excluding service prior to start of the Plan?

If yes, do you have to "catch-up" the "skipped" RMDs when the benefit becomes accrued in the 3rd "pop-up" year?

Hello, everyone!

Question for you all. We have a company that failed Section 125 ND testing for the year-end 2013. Most of the folks in the plan are highly compensated. To that end, the company plans to go out of pocket and pay the taxes dues on the portion of taxable benefits for each highly compensated employee for the 2013 taxable year.

Subsequent to this, the company would like to ask each employee to reimburse it for the taxes paid on their behalf. This reimbursement will be requested in 2014. If an employee refuses to pay the company back, can the company simply withhold what it paid on that employee's behalf from that employee's next paycheck?

This feels a bit wrong...the company may have to eat the tax payment, or just require all employees to pay their own way? Does anyone have any tax authority or other guidance they could point me too on this issue?

Thanks so much!

Anybody else notice on the IRS website that the instructions for the 2013 1099-R forms are not included? It jumps from 2012 to 2014. The actual 2013 forms are there along with the 2013 1099 General Instructions, but no form specific instructions for the "R" forms. I like to download the *.pdf files of the instructions so I have them handy for reference. Not a big deal I realize, just found this odd and wondered if anyone knew why?