Leaving aside nondiscrimination testing issues, can an employer provide its CEO (and only its CEO) with a medical expense reimbursement plan that reimburses deductibles, copays, etc. under the employer's self-insured health plan? That is, will the reimbursement plan be "integrated" with the employer's health plan such that it is not subject to the ACA's restriction on annual limits even though only one individual can receive the benefit?

Under a DB/DC combo plan

Only 2 of the HCs are covered under the DB Plan

to pass cover, the employer would need to cover 15 NHCEs.

Can the employer just pick the 15 to cover?

Plan will be amended to show the names of HNCEs to cover

Is there any discrimination issue with picking 15 participants?

Plan's definition of post-severance compensation counts compensation paid for unused vacation paid after termination of employment. Assume ee' terminated on June 10th and worked 950 hours. She is paid for 60 hours of unused vacation. Does she have 1,000 hours for vesting that year?

(I think hours stop at termination of employment even if compensation does not. But I don't know - just my interpretation, What do others think or know?

Thanks for any opinions (or answers).

Craig Schiller

We know that there are limited amendments that can be made mid-plan year. Any thought on this situation?

Safe Harbor, with the "maybe" 3% nonelective contribution.

Profit Sharing allocation conditions require last day employment.

The Safe Harbor Notice is given 30 days before the beginning of the next plan year stating the Employer "might" contribute the 3% safe harbor.

A follow-up notice is given 30 days before the plan year end stating no safe harbor.

Question - could the Employer amend the Profit Sharing allocation formula before the end of the plan year?

Have a plan that was a controlled group because the owner owned 100% of two similar firms. He is selling one of them completely and will have no interest any longer. What do I do with this Plan now. The other employer would like to maintain the Plan. Because they are similar firms, both rehabs, can we have a Multiple Employer Plan and have one firm be the sponsoring firm? Or is this a Spin off situation. I basically need ABC instructions on what to do Plan Doc wise and best way to approach.

Thank You.

Hello,

The sponsor of a 401k safe harbor was purchased via a stock sale. The participating employer was not purchased. There is no longer common ownership between the new sponsor and the participating employer. The purchaser wants the participating employer to stop participating immediately. It is not cost effective for the participating employer to create its own plan (but may be necessary).

Question: I know safe harbor plans can be terminated for cause if the employer is involved in a merger, acquisition, change of controlled group... However, the plan is not being terminated immediately, the participating employer is terminating participation immediately and they don't want to start a new plan. I am thinking that they would have to set up their own plan, and then terminate it. Otherwise no distributable event exists?? Any other thoughts?

Thank you

This is a 401k plan that allows immediate eligibility for 401k deferrals and a 1 year wait for the employer profit share. Two employees were hired in Dec. 2012 and received their first compensation in Jan. 2013. For the 2012 form 5500 are they considered active participants since they are eligible, even though they could not have deferred due no compensation received? I think they are included as active participants, but the software I use is not including them.

I have a Defined Benefit Plan where the Plan Sponsor will be starting significant layoffs. We completed an AFTAP for the 2013 Plan Year and the funded percentage was over 80%. This plan allows for lump sum payments. The assets in the Plan are not sufficient to pay out all benefits and the Plan Sponsor does not have the dollars available to fully fund the plan for termination.

As employees are terminated they will have the right to request a single lump sum payment of their benefits. Since we know that eventually everyone will be laid off, the assets in the plan will run out before all payments can be made.

Does anyone have any suggestions!

I'm unable to locate any definitive source to answer this question.

What is the deadline for employee contributions to a SEP-IRA for any particular tax year? Note I'm not referring to contributions made by self-employeed individuals as those are considered Employer contributions and are reported in Box 8 of Form 5498. Also, I'm not referring to elective deferral contribution to a SARSEP which are also reported in Box 8 Those deadlines seem clear to me.

What isn't clear is the deadline an employee has to make a contribution to their SEP-IRA for the previous tax year. These contributions are reported in box 1 of the Form 5498 and following the annual dollar limit of §219. From my understanding, they are treated like traditional IRA contributions. Because of this, it seems to me then that logicially the deadline to make contribution for the previous tax year would be April 15th (just as one would do with their regular stand alone traditional IRA).

However, every source I reference simply states that the deadline to make SEP contribution is tax filing deadline plus extensions with no seperate mention being made (or at least acknowlegement of) that the deadline for box 1 employee contributions made to a SEP-IRA still needing to follow the April 15th deadline of a traditional IRA.

Just hoping someone can confirm and possible cite a source so I can be 100% confident on this answer.

Does anyone know offhand why the IRS requires 20% withholding off of plan distributions that are eligible for rollover vs 10% on IRA distributions? Thanks

Anyone aware of a requirement to use only the last 4 numbers of a participant's SSN on statement and if so where that requirement is? Coming up w/ nothing so far so maybe there is no requirement to do so, but rather a best practice?

Does anyone know if there are any requirement to track in-service rollovers to IRA's? It seems I remember something about this from a long time ago.

This must be the month of problems for me

Long story short.... A rather large deferral for the owner of a plan sponsor for December 2012 was never deposited in the trust account due to a perfect storm of miscommunication between the payroll company, recordkeeper, and plan sponsor. Deferrals for all other participants were deposited and invested in a timely manner for the month. The deposit still hasn't been made. What is the best course of action to correct this issue? Thanks

I have a 9/30/12 401k plan that just finished up their audit and 5500 for that plan year. The plan converted to us in Sept of 2012. The plan makes monthly non-elective safe harbor contributions. During the audit it was discovered that the plan did not make their Aug 2012 contribution. Lost earnings are being deposited into the participants involved. Does a 5330 need to be completed also?

Suppose you restructure a safe harbor profit sharing plan for testing purposes. Also suppose the plan excludes HCEs from receiving safe harbor contributions (to minimize the required contribution in a bad year).

The owner and most other HCEs are in component plan A: the benefits-tested group with enough of the youngest NHCEs to pass the ratio percent test. The nonelective portion is tested for nondiscrimination by cross-testing and by imputing disparity on the regular PS nonelective allocations (can't impute with the SH amounts).

The owner's son however, is in the component plan B: the contributions-tested group with all the rest of the NHCEs where the intnet is that they all receive a total nonelective allocation of 5% of pay (5% PS for the son and 3% SH plus 2% PS for the others). The owner's son's wages are not over the taxable wage base. If component plan A imputes disparity, then imputing disparity in component plan B results in a 10% allocation rate for the son and 7% for the NHCEs (fail).

Assuming there is no other integrated plan sponsored by the employer and assuming the son is not a self-employed individual, when imputing disparity, must the entire plan impute disparity, or could just one component plan impute disparity and not the other?

How do you read 1.401(a)(4)-7(d)(2) for this?

IRS Notice 2001-46 provides that non-electing church 401(k) plans are not subject to regulations of 401(a)(4), 401(a)(5), and 414(s). The notice also states that such non-electing 401(k) church plans would aslo have to be operated in accordance with a reasonable, good faith interpretation of these statutory provisions until such further notice is provided.

Therefore, is it correct to say that a non-electing church 401(k) plan could use a non-safe harbor defintion of compensation as a result of being exempt from 414(s) testing, and allocate employer contributions that discriminates in favor of HCEs, but not subject to general nondiscrimination rule of 401(a)(4) and special nondiscrimination rules of 401(a)5)? However, the plan would still be subject to ADP and ACP testing.

During a random audit, the employer was asked to provide plan information for 2010, 2011 and 2012. Anomolies turned up and the employer knows that they have to be corrected, including any additional contributions, earnings and penalties. Then the IRS said that they would like information going back to 2006 -- 7 years ago. I thought that 6 years was the limit, unless they can make a case for fraud. Is the 6 year limit just a guideline that doesn't really mean much?

403(b) large plan filed 5500 for 2010 and 2011 but not 2009. I dont know why. I believe they must file 2009 under dfvc and pay 2000 but thought i might check for other opinions?

My senior memory has begun to wane. As such, I continually look for ways to protect myself from myself. In this regard, I recently changed my passwords to "incorrect." That way when I enter the wrong password, a system message appears, "Your password is incorrect."

Any opinions on whether if you want to transfer excess assets from a DB plan to say a profit sharing plan under IRC 4980(d)(2) do you need to file a Form 5310-A (advance 30 day notice of transfer or assets or liabilities) with the IRS ?? It's not clear to me from the instructions for this form if this type of the transfer is of the type that triggers this kind of filing requirement.