according to the govt web site

http://www.socialsecurity.gov/OACT/COLA/cbbdet.html

the taxable wage base will be 117,000 in 2014

if my spreadsheet still works, the covered comp will be as indicated on the enclosed spreadsheet.

...............................

based on the CPI-U that was released today the increases (should) be (based on the regulations)

260,000 for compensation

52,000 for 415 limit

210,000 for the DB limit

170,000 for key employee

covered comp at 117000.xls

Good Morning

I have an employer that would like to add an allocaiton condition to his profit sharing contribution of 1,500 hours of service. I beleive he cannot exceed 1,000 hours but I am having trouble proving this to him.

In the LRMs I can show where a non-Standardized prototype document is limited to 1,000 hours but he is looking at customizing a volume submitter.

I think it is a 401(a)(4) issue and I have also looked in ERISA 204 and regulations for ERISA 200 and have not found anything conclusive.

Any help would be greatly appreciated.

Thanks

A plan needs to fund a missed deferral opportunity and earnings - can the forfeiture account be used for this?

I think the answer is no but I want to ask in case I am missing something. A company with 20 employees is setting up a 401(k) Plan.

The 2 owners of this company also own a real estate holding llc. They would like to include the holding company in the plan so they can count the comp from both companies. I think they cannot because it is passive income. Am I missing anything?

Suppose you have a calendar year 401(k) plan sponsored by a Corporation. Also an LLC adopted the plan as a participating employer.

Ellen, the 100% shareholder of the corporation also has a 45% interest in the LLC. Her compensation was as follows:

1. Corporation W-2 = $100,000

2. LLC K-1 self employment income (adjusted for contribs 1/2 SE tax etc) = -$90,000

Question: Must the $100,000 be aggregated with -$90,000 for contribution allocation purposes? Or does the the corporation fund its contribution based on $100,000 of salary and the LLC fund its contribution based on $0?

Thanks a million.

I've been in business now for a couple years after branching off on my own after 20 years. I am really in need of a block of business at once to make my venture a true success and to be able to maintain my employees. As most know new plans just don't come in quickly enough. I'm not necessarily looking to borrow funds for a purchase but more so looking for the selling firm to finance a portion. That said does anyone have any ideas or know of an individual who may fit this.

If any of you are doing these submissions, I have to give the IRS credit for this document. Very very well done. Step by Step instructions, written in English (no kidding!).

http://www.irs.gov/pub/irs-tege/vcp_submission_kit_403b.pdf

Would you folks consider being a real estate agent a service industry? My first reaction is "no"...

But then I say to myself "is capital a material income producing factor?" Is the house consider capital? If the realtor charged an hourly fee I'd say it was service. Why should that make a difference?

Company acquires another company and establishes a qualified replacement plan under Code Section 4980. Owner of the acquired company has provision in will that provides upon his/her death, all of his/her stock in the company is to be held for his/her spouse’s lifetime, and then after the spouse’s death the shares go to the company’s qualified defined benefit plan. Are there any prohibitions on a qualified defined benefit plan receiving a bequest of stock?

Must all ERISA 403b plans allow for J&S? Or only if invested in annuities?

Ever seen both items 9 and 10 filled out on the same 5500 and if so, any guidance on being allowed to do that? I know there is next to no guidance in the formal instructions.

Apparently insurer uses one methodology on Health and Dental and the other on Vision, and thereby has no separate records of claims paid on Vision.

We are a non CSP TPA firm.

Are we subject to the 408(b ) and 404(a)(5) DOL regs?

We have been told "no".

A plan is designed with the intention of satisfying the SH Match through the basic 100%/3% + 50%/2% formula. Plan defines compensation for purposes of elective deferrals AND THE MATCH to exclude bonuses. Treas. Reg. Section 1.401(k)-3©(6)(iv) clearly says that the SH rules do not prevent you from making bonuses ineligible for elective deferrals, but then it goes on to say that each NHCE must be permitted to make elective contributions in an amount that is at least sufficient to receive the maximum amount of matching contributions. What does that mean? In the plan I've described, do you still have to test for non-discrimination under 414(s)? What if you fail?

Earlier this year, the sole-participant of a DB plan was paid out his 415 lump sum limit of about $2.3M at age 64.5. At the time, he already had 10 years of service and participation. His limit was based upon his average comp of $200,000, which was slightly lower than the $205,000 dollar limit. He is asking if there is any way for him to accrue an additional benefit. At first, I thought that he could do so by earning enough in 2013 - 2015 that his average comp would increase to $250,000. My thinking was that, since the dollar limit will probably increase above $205,000 (and, additionally, it is actuarially increased after age 65), his 2016 dollar limit would probably be above $250,000. However, it looks like, once he generates a new higher 415 limit by 2016, it will be completely offset by his 2013 payout of $2.3M actuarially increased to 2016. Am I thinking about this correctly?

Any help would be appreciated!

company A and company B are members of a controlled group. Both have their own 401(k) plan. one is safe harbor. one is not. Smith is an HCE on the payroll of each company. he only makes salary deferrals in one plan but, could defer in both.

in doing 410b testing for one of the plans you typically use a numerator of that plan's benefitting hce employees and divide by the total number of hce employees of the entire controlled group. But, would you count that hce as an employee one time or two times in determining the denominator?

we cant do permissive aggregation because one plan is s/h and one is not. However, I know that for the adp testing you have mandatory aggregation of HCE's for adp and acp testing.

Is there some sort of mandatory aggregation of HCE's for 410b testing purposes? And, is the HCE counted as one employee or two employees of the controlled group?

I would appreciate any citations if possible.

Thank you!

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.