Last I checked on this if we used the various proposed reg options to credit theoretical accounts with an interest credit equal to actual rate of return on plan investments, you had to use that annual rate (not an average) in your DB/DC combo testing. Is that still the case or has there been anything new on this that would allow an "average" of multiple years' returns to be used instead of each year's ? Thanks.

Working on a 3/31/13 plan year end 401(k) non-standardized plan. This plan has elected to use the determination period for compensation as the calendar year coinciding with or ending within the plan year. The limitation year is then the same as the determination period.

For ADP testing purposes, we are using the 2012 calendar year compensation and the 3/31/13 plan year deferrals.

The 402(g) deferral limit for 2012 is $17,000 and the 402(g) deferral limit for 2013 is $17,500.

What deferral limit is used for the 3/31/13 ADP test to determine the amount of the catch up contributions?

Hi,

One of my employees would like to participate in the Dependent Care Account. However, her spouse doesn't work. He is not a full-time student, not disabled and he does not take care of the kids. They go to daycare. I'm fairly certain she can't participate but there was a reference to someone who is "married, filing separately" being able to participate in some of the references I was able to find. Does anyone know if there are any circumstances under which a married couple where only one works may utilize the Dependent Care Account.

He volunteers 20 hours per week but it's unpaid.

Thanks!

Sorry if this is simple, but it's Friday and my brain has stopped working.....

Suppose the following

1/1/2013 Valuation Date.

Hypothetical Account Balance as of 1/1/2013 = $5,000

IC = 4%

Pay Credit = 3%

If I'm doing the valuation during 2013 and I don't yet know the 2013 pay, how do I determine the Target NC? Do I look at last years pay and estimate the accrual of the pay credit plus the interest credit to get the accrual for the year?

I'm almost certain that's it (unless I have a salary scale in which case I would apply that for one year), but just need to check since I'm doubting myself.

Got a judgement for divorce that required the QDRO for my ex's retirement fund be carried out within 45 days. That day came and went and I've now filed for contempt. I'm due to receive 50% of the fund during the marital coverture period.

It's a substantial amount of money and what I can't seem to find an answer to is this:

Is the interest being earned now on 100% of the money ALL going to him, or will I receive interest on the portion that was deemed to be mine by the court? I want to know if I need to ask the court for financial damages due to him dragging his feet. I calculated that even at a modest interest rate of 4% compounded weekly, I'm losing about $800 a month.

Does anyone know the answer?

Thanks in advance!

Here are the basic facts:

• Start up Plan effective 10/1/2012
• One employee that owns >5%, was hired 8/2/2012 (deferring 10%) - the only HCE for 2013
• No other employee owners
• No Employees had comp over $115,000 in 2012

If the 2013 ADP test is run using Otherwise Excludable method (using statutory entry date of 7/1/2012), are all employees excluded - even the HCE?

I cannot seem to find anything in Tripodi, or from the TPA (yet). Thank you!

Hello,

There is a current employee who is over the age of 70 ½ .

This employee would like his entire account balance insured to him.

(The ESOP Plan Document is silent on this matter.)

Questions

Is the company obligated to pay him?

Are there regulations specific to this situation?

Thank you for your time.

Lisa

An employer maintains a 125 plan which includes pre-tax insurance premiums, health FSA (funded solely by salary reduction) and dependent FSA (funded solely by salary reduction). The plan passes the 25% concentration test and the utilization test when aggregating all benefits, and it also passes the separate DCAP tests. Is there separate testing required for the health FSA in addition to the aggregated tests?

thanks.

Hello, everyone

A question for you all. Under IRC 280G, the shareholders of a privately held company can agree to exempt a private company's payments from the 280G golden parachute provisions, and also avoid the gross-up (which is provided for in the company's current golden parachute provisions). The company is contemplating sale, and wants to ease its own financial burdens, such as the gross-up. The golden parachute payment must be approved by more than 75% of the company's owners in order for it to be exempt from 280G. However, if the payment is not approved, the payee gets nothing, and thus surely won't waive any contractual right to payment prior to the vote in such a case.

Does anyone know of any risk minimization strategy (or any authoritative pronouncements or discussion on the subject) in such a case that could ensure (or maximize) passage of the vote? Perhaps a voting trust of some kind? I feel this might run into a substance over form problem, since the approval vote has to be a voluntary decision of the shareholders.

Any thoughts you have would be much appreciated. Thanks!

If a plan is filing under the DFVCP for a 5500 that was not filed, does the 8955 come under that too, or will that penalty be separate? Seems like it is separate, but just wanted to ask. Would it be worse just to not file an 8955 this year, and file it for 2013 instead?

We need to file a new DB Cash Balance Plan for an IRS Determination Letter (with no Demos) using Form 5300. The plan is under 100 participants with at least 1 NHCE.

Is this plan exempt from the $2,500 user fee?

I just re-read IRS Notice 2011-86 and it looks like it is exempt from the fee, but in the back of my mind I am thinking the exemptions ended with the EGTRRA remedial amendment period last year. However, I see the exemption option is still on the new Form 8717 (rev. 2-2013).

Thanks.

PSP provides for cross-testing and has various defined groups of participants, e.g., Group A = "Employees who work in location x", Group B = "Employees who work in location y", etc. An employee who works in location x has been relocated mid-year and now works in location y. Question raised as to which allocation group employee will be in. Plan doc has "a year of service and employment on last day of the plan year" requirement for sharing in allocations of contributions. Allocations are to be made as of the anniversary date, ie, last day of the plan year. Plan year is Dec 31. It would seem that determination of which group an employee is in would be made as of last day of the plan year (Dec 31, 2013) given that is the date for making allocations. Thus, the employee who relocated mid-year from location x to location y would be in Group B as the determination would be made as of last day of the plan year. Appreciate any thoughts regarding the above. Thanks.

My question is in regards to a plan that has a safe harbor match using the per payroll period formula.

An employer is in transition to change payroll providers, and adopts the new payroll provider's plan.

They will continue the per payroll safe harbor match in the new plan.

What if there is a two month gap between the last payroll of the prior plan, and the beginning payroll of the successor plan?

Is there a safe harbor obligation for the gap period, or is the obligation only there for those payroll periods actually made in the prior plan and successor plan?

Does a DC plan need to have language for the additional gateway 5.5% - 7.5% needed when aggregating and testing a DB/DC combo that is not primarily in nature?

I am looking at adding a DB plan for a client, they have a 401(k)/PS with a bundled provider that is on a volume document with individual groups. They would like to leave that plan as is for now. The plan provisions work, but there is nothing about the additional gateway in this document, just the DC 3:1 and 5% rules.

The volume documents I'm familiar with (Datair and Relius) do have this additional langauge.

Simplified, exaggerated version of my question:

Participant starting collecting a pension in-service at age 62 for $150,000 per year which was his high 3 comp limit. Assume it equaled his 415 dollar limit and the high 3 comp never increased. Still working. Participant is now 99 years old, so he has collected $5.55 million. Plan is being terminated and is being amended to allow for a lump sum upon plan termination. How is the maximum lump sum that such participant may receive determined, i.e. how are the prior distributions "taken into account" in the calculation?

Current opinions appreciated since I'm not sure there is an official answer, or equally welcome are comments on how the IRS views this currently.

I have read David MacLennan's 2006 article on this subject, but I believe it pre-dated the final 415 regulation.

Hello,

Here are the facts surrounding this question:

1. An ex-employee was denied a lump sum distribution by his ex-company.

2. This ex-employee filed a “Claim for Benefit Request”.

3. The company responded and denied his lump sum distribution request.

4. The company stated that the reason for the denial solely as “Reason #1”.

5. This ex-employee filed an Appeal and clearly showed that “Reason #1” is not a valid reason.

QUESTIONS:

Can the company deny this appeal and state a new reason (“Reason #2”) for the denial?

Or must the company only use the initial reason (“Reason #1”) for all matters now relating to the claim?

Are there any regulations applicable to this?

Thank you for your time.

Lisa

Let's say someone who was a sole proprietor, selling ice to Eskimos, had a DB plan and terminated the plan in 1990 when he was 35 years old. Accrued benefit of 100/month payable at age 65, received lump sum of $40,000. (obviously I'm making up numbers here)

Now in 2013, he starts a new sole proprietorship, selling hazing instructions to NFL teams.

He wants to set up a DB plan for his new hazing sales business. Does he have to take into account, for 415 purposes, the benefit he accrued and received under his formerly terminated plan?

Can a township sponsor more than one 457 plan? They currently have one with MetLife that one participant contributes too. They would like to open another 457 plan with Nationwide. is that allowed?

I have a sole proprietor client who is age 60 and wants to start a 401(k) Plan with the initial contribution being designated as a Roth contribution. His thinking is that he wants to make an investment that he feels will increase in value substantially within the next year or two. He would than like to terminate the plan and receive this money tax free. Assuming he closes down his sole proprietorship and is at least age 60, would this meet the "separation from service" exemption for Roth distributions so that he wouldn't have to wait 5 years before he could take the money without taxes and/or penalties.?

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I think that I found out my answer. There is really no way around the 5 year waiting period short of maybe taking substantially equal periodic payments. So if my client wants to do this, he needs to be prepared to take out periodic payments for a while.

A takeover plan is a unit credit accumulation plan formula, where the benefit is the prior year AB plus the current year's accrual based on current year pay times 1.25%. No lump sum option only life and QJSAs. 1,000 hours required to accrue each year.

When participants reach NRA, the plan begins to pay the participant's monthly benefit, even if the participant does not retire.

So if a participant attains NRA in 2013 and begins receiving his monthly benefit, and then accrues an additional benefit in 2014, when does the payment increase?

a. First of month after completing 1,000 hours (except that the amount of the benefit is not yet known because 2014 total wages aren't known);

b. First day of the next plan year?

c. as soon as administratively feasible in the next plan year with a catch up back to when the benefit accrued?

d. Other?

The plan document has no language addressing this, the prior plan documents that we have obtained do not address it either.

Thanks.