austin3515

Does anyone know if fidelity bonds with inflation guard have any caveats, exclusions, etc. regarding non-qualifying plan assets? So a plan has $1,000,000 but has $300,000 of real estate. Will the bond be $300,000 or still just $100,000? I am afraid that plans using inflation guard might be lulled into a false conclusion that they are all set when in fact they are not. Probably a less interesting example is a plan with $1,000,000 and $600,000 of real estate. I think that is more clear that the bond covers just $500,000 as most of these bonds indicate a "not to exceed $500,000" parameter. Anyway I wasn't sure if anyone had already looked into this as it seems to be a potential hole in the bonding requirement for the small plan audit waiver.

ok then they are idiots. I have a bigger problem than you because I generally make them effective 1/1!

Aha... Good point! I was jumping on the "they must be idiots" bandwagon but perhaps they are onto something...

https://www.jpmorgan.com/cm/BlobServer/Auto_Contributions_Comparison_Chart_JPMorgan.pdf?blobkey=id&blobwhere=1158591832360&blobheader=application/pdf&blobheadername1=Cache-Control&blobheadervalue1=private&blobcol=urldata&blobtable=MungoBlobs Found this little gem for ya...

That's what I figured... I have to imagine this happens often enough.

Plan established in 2012 had no eligible ee's except the owner and so was an "EZ filer" but exempt because plan had less than $250K. Now in 2013 there are eligibles. What do I do? Will I get a letter? Is there a way to avoid it?

http://www.aicpa.org/Publications/TaxAdviser/2014/January/Pages/naegele_jan2014.aspx THANKS!!

Is that available on the intnernet?

If only there were a nice chart explaining this all...

Is there a chart in existence a Relius / McCay Hochman, etc., that compares the differences between IRA's and 401(k)'s with respect to how effective they are at protecting assets? This is a question that comes up a lot, and now I have one specifically related to tax liens. Now, I have been very clear that I can't give legal advice on the matter, but I did say I would check and see if I could find an article on the topic.

We're working that angle too, I was just hoping that someone would attach what I needed and make this much easier for me!

We have an auditor asking information for information on the VALIC Fixed Interest account that is being offered through a bank custodian. Anyone know where I can get the financial statements for this fund? It does not have a ticker, but it does have a CUSIP? http://rps.troweprice.com/mc/sites/florida/pdf/VFIXF.pdf He wants to know if the contract is benefits responsive and whether it is Level 1, 2 or 3 for those crazy new disclosures. Anyone have a document or can point us in the right direction?

It would be a breach of fiduciary duty to loan more money to someone with a history of not repaying his/her obligations. But there are no guarantees that any loan will be repaid pursuant to the terms. Again, why should the Plan enjoy greater enforceability rights than any commercial institution? Recall that a plan COULD allow for payments by check, but is not required to do so. So because payment could have been by check, the answer to your question must be "of course it would not be a breach of fiduciary duty." What you are referring to is a code for a garnishment, is it not?

Let's say Owner A owns 40% of 5 different Companies (each separate LLC's which own separate franchises). The remaining 60% is owned by the operator and is always an individual unrelated to Owner A. Owner A owns 100% of "Back Office Co." Back Office Co handles the accounting, payroll, advertising, human resources, and other services that are required for each of the 5 Companies. Each of the 5 Companies pays a servicing fee to Back Office Co. Back Office Co. employs about 12 people to do all of this work, almost all of whom are NHCE's. Would this be considered a Management Group? Are these Management Functions? Couldn't a case be made that the principal purpose of this entity is NOT management? It's really overhead. Note that hiring/firing decisions are made at the franchise level, and the operations are managed by the 60% owner. Granted, Owner A does play a big role, but he is just one employee of many at Back Office Co. Each LLC has between 50 to 100 of its own employees. DOes the answer change if the ownership exceeds 50% (i.e., because they would be considered related)? I suppose the answer is "if this entity provides management services" the answer is yes. There must be a PLR or something on this stuff...

I am of the opinion that even though permission was granted withhold loan payments the authorization was not irrevocable. So if an employee comes to you and says "I forbid you to withhold money from my pay for this loan payment" what basis would a plan administrator have for refusing to honor this request? Especially if the employee's pay was cut in half due to an hours cut. Now of course the fiduciary should never make another loan to this person unless the old is repaid (even if defaulted of course!). But to me if you refuse to discontinue the payroll deductions now it is a garnishment. Why should the plan have such an advantage over a bank who has to get a court order to garnish wages?

It is wrong because as of 12/31/2013 there is no liability. A participant could, after 12/31 but before pay-day, elect not to defer. Therefore, this does not meet the GAAP definition of a liability. Compare that with the related payroll expense. That liability is determinable and incurred because the services have been rendered. The money is owed to either the Plan or the Individual. It is not known to whom until pay-day. Therefore, the Plan is not owed any money as of 12/31/2013. Show this to the CPA and they will at least say "good point."

PArtnership filed partnership returns on 9/15/2014. We are doing 2013 profit sharing today for just the owners (employees already received a 2013 PS of 7%), which is before the 415 grace period ends on 10/15. We are then going to do profit sharing again for 2014 and deduct them both in 2014 (and be cognizant of the 25% deduction limit). Anything I am missing?

Bird, you are on the money. When they do the corporate audit, a portion of that pay-period gets accrued as a 2013 payroll expense. Why? Because the service rendered is attributable to 2013. But the key here is that it is a non-event until the amount is WITHHELD. That's the obvious point for which no reg is needed. If not WITHHELD until 2014, it is a 2014 contribution. It is not due to the Plan until it is WITHHELD (one h or two?).

Is it ok to exclude someone whose employment with the employer is "temporary" without including the fail-safe statutory eligibility? (we're not talking about a temp agency here or employee leasing). so plan has immediate eligibility, but these employees are expected to work for just a 3 year special project and then be done. So they would meet statutory eligibility but by contract their employment is just 3 years. I know this has been discussed here before as to whether or not this is considered a service based exclusion in violation of 410(a). If anyone has the link handy, I would appreciate it. I couldn't find it...

Again, unfair. People are victims of circumstance more often than you give them credit for...

Oh well that's not really fair.

If I were a judge, I would strike this down with the following logic: It is just plain stupid. And that sound logic, combined with practicality, should get me a post on the Supreme Court.

Here is the next question: how many plan sponsors / service providers actually do this?

http://www.napa-net.org/News/Browse-Topics/Inside-NAPA/Article/ArticleID/3389 Take a look at thus article. How in the heck would ERISA pre-emption NOT apply?

Well, except that the trustee of the plan is signing off on it.