Coleboy1

2 Year Old plan. First year assets were less than 250K. 2nd year they were over. Hence I'm doing the 1st year filing in the plan's 2nd year. Is my beginning balance $0 or do I use the ending balance from the previous year( that was under $250K)?

Hi, This plan started in 2021. Money was rolled over from an IRA( so I'm told) and was used to pay the premiums on a life insurance policy that was purchased under the plan. This is what was told to me by my boss. The cash value of the life insurance policy exceeds $250k this year so I have to complete the 5500EZ. I'm reporting the money from the IRA as rollover money and the cash value as of 12/31/22 as the assets. Since this is the first year for the EZ to a make the beginning balance $0 or do I report the balance of the policy as of 12/3/21? My alarm bells are going off which is why I asked the question. I am the new person in this firm and am being told that this is legal. Now the client said that the premiums are being paid by the company but the person who set this plan up is saying they were paid from IRA rollover money. I'm just confused.

This plan is only 2 years old. A 5500EZ has to be for the first time for 2022 since assets are over 250K. The only assets are the cash value of the policy.

I have a 2 person profit sharing plan. Husband and wife. The only asset in the plan is an insurance policy for the husband. The cash value of this policy is now over $250K so I'll be doing a 5500EZ. My question is do I count the premium paid as a contribution? Is there anything else I need to do? It's been many years since I've worked with life insurance in a plan. Thank you!

That was always my understanding then I read somewhere that if it was a SH plan, the calcs were done differently.

Client has a plan with a standard safe harbor match. Participant went on the system and changed her deferral percentage. She also increased her catch-up amount by $10. The recordkeeping system does not recognize both a deferral percentage and a catch-up so only the catch-up portion was picked up by payroll. Hence, since July 2021, only the catch-up amount has been taken out of her check. She just noticed this a year and a half later. Since this is a safe harbor plan, what would the missed deferral calc be based on? In other words, would it be based on the 8% that she wanted or just on the maximum match of 4%?

Is this effective for the 2023 plan year?

That's what I thought. It threw me when the prior TPA included them one year but not the next. Thank you!

Working on a plan where the owners and their spouses in a corporation had no compensation for 2022. Do I still include them in my testing? This is the first time working on this plan but I see that they haven't taken any compensation for a few years now. One year the prior TPA included them and the next year they were excluded. Not sure why hence my asking this question.

The payroll company I worked for never counted the value of any gift cards we received on our W-2's. The amounts varied from $10-$100. Will the IRS clarify that any gift card under a certain amount need not be counted on the W-2? Will the IRS allow companies to get a tax break on any of these gift card if companies chose this incentive?

Yes, all of my rate groups pass the ratio percentage test a70%. Why does FT Williams still give me the big red dot that states my tests have failed if I don't have to pass the ABT?

We use FT Williams for administration and it's getting me so confused! Or maybe I'm just getting too old for this s$%t! This cross-tested plan has passed the rate group test but not the average benefit test. It also passed the ratio percentage test. Does it still have to pass the average benefits test as well? Are deferrals included in the average benefits test? Someone have mercy on me!

Thank you!

Are there any other systems out there other than Pension Pro that TPA's use to track their clients, etc.?

I agree with everyone. Retirement is looking pretty good as I don't know if my old brain can keep up with all of this new stuff. I have large client that has many part time people as well as per diems ( who aren't allowed in the plan). Thinking of this just makes my head spin. Early retirement, maybe? Is there still such a thing?

Exactly Bird! Just to allow me to contribute?

Thanks Bill!

It's an integrated allocation. Plan is not top heavy. PS is 3% of compensation.

Plan has 1 year/ 1000 hours for eligibility. There was an amendment done to allow an employee into the plan early. Basically anyone employed on such and such a date is allowed into the plan. Client is putting in a PS contribution before year end. She does not want to include the employee who was let in early in the PS allocation. There is nothing in the document that state this employee is not entitled to an allocation. Document states that any participant who has worked at least one hour during the year is entitled. What can be done? Amend the document now? BTW, that participant is me!

Plan is terminating. There are a few participants that terminated and have a 5 year break in service but were never paid out. Do these people also become 100% vested due to the plan terminating? Or are we able to pay them out based on their vested amount at the time they left the company. Thank you!

I just received this same communication via email last Friday. I forwarded to the accountants in hopes that this will push them to finish the audit instead of dragging their feet.

Thanks Luke! I've never had to deal with this before. These auditors are dragging their feet!

Regarding the 45 day "grace" period, does the DOL send the client a letter stating they have 45 days or does one just keep track and make sure it gets filed with that time period. I had an auditor asking if the client received a letter form the DOL regarding the 45 days.

This client is putting in their discretionary match on a payroll basis. They are putting in 10% of the participant's deferral amount. So if a person is putting in a flat $100 amount, they are getting a $10 match. If a person is putting in 20% of pay and it comes to $2500 then they are getting a $250 match. I always thought the match had to be based on percentage of compensation not deferral amount. Am I wrong or am I just confused?

"Only active participants may make a rollover contribution." Technically an employee who moved from a regular employee to per diem isn't active any more. Or am I looking at it wrong?