austin3515

I don't recall, but a) I think EPCRS will say and b) will it make any difference? I mean, are there other employer contributions that can be offset, thus making it a zero sum decision? So if the employer uses the $50 in forfeitures to reduce this correction or $50 to reduce the match, the employer still saves $50. I generally try to avoid answers like this that don't answer the question posed, but I went and did it anyway...

If the Plan Document does not designate the HR person as the Plan Administrator then he or she is not the Plan Administrator. The broker putting the words Plan Administrator in an RFP does not make it so. He could put in the RFP that the Plan is profit sharing plan when in fact it is a money purchase but it would not make it so. Again, I think the fact that a literal definition of plan administrator (I mean Webster Dictionary) would describe the HR person. And for that reason I think you are OK. I will give you another example though - often times I receive QDRO's where the order names my TPA firm as the "Plan Administrator" and when that happens it's first on my list of required changes. But then, that is a legally binding document, and therefore much different in gravity than a mere RFP.

I sometimes discourage people from signing the 5500 but I think the laymen's definition of "plan administrator" (that is, the person who administers the plan) gives enough leeway.

If you subscribe to TAG they have sweet template that will analyze up to 5 entities (maybe 4?) for 4 owners. Just put in your data and there are these really cool formulas that say "Company 1 and Company 2 are a controlled group" or Company 3 and 4 are a controlled group and Companies 1 and 5 are a controlled group. I'd share it but I would feel bad publishing their intellectual capital.

Thank you - PensionPro, where in the IRM is the site you mentioned?

What is "IRM" and where can I get a copy?

Would costs related to Continuing Education count for hardship distributions? For whatever reason the employer is not paying for the training, probably she is a per diem employee or something.

Client has 4 employees plus himself as the owner. All employees were hired in 2014. The owner started the business 6 years ago. Can he establish a safe harbor 401k for the employees and continue to contribute the max to the SEP ($52,000) without including any of his employees until 2017 (2014, 2015, 2016 for service = 2017 eligibility in the SEP)? The document does use the "3 of 5 rule." I know that we can no longer use the 5305 and I also know that I need to be concerned with top-heavy (hence the safe harbor status of the plan). I know about 415 aggregation, etc., but I cannot find anything on this, which is surprising because I would think this is a pretty obvious plan design choice in the right circumstances.,

Let's just say the auditors do not deserve any blame at all. I know sometimes they procrastinate, but in this case it was not their fault. (neither do I for that matter... hmmm.. who is left?? )

You're right, it's $760 but I'm sure they will not want to part with it. I thought it was double the rate from a small plan but it's just double the cap. I would have of course looked it up before I got too far

Oh absolutely, I will only respond if they write me first. I'm hoping they don't write at all based on the fact that it was only missed by 12 hours. But it sounds like you have argued facts and circumstances to even avoid the DFVC fee?

Client had a work-related emergency and had to ignore phone calls and emails pleading regarding filing the 5500 by the 7/15th due date. The form will be filed by noon today (just 12 hours late). Has anyone ever heard of a) a grace period or b) an abatement request that was approved? Or is the response, "we know #$@$ happens, and that's why we added DFVC." Long story short, it was an audited plan and the financials were received yesterday which is why this all went down last minute.

I wouldn't think so. We get everything from "TIAA-CREF."

Their Schedule A indicates that all of the money other than the TIAA Traditional Account is in pooled separate accounts. Yet on their Schedule D report, they include ONLY the TIAA Real Estate Account. Has anyone ever looking into why that is? I assume that we should be doing it more like Hancock does - listing each fund with "000" as the plan number. I don't really care, I will continue to exclude them based on TIAA's Schedule D report (let TIAA defend it if it ever gets questioned) but was wondering if anyone had ever looked into this.

We used locateplus (or locatorplus, I forget exactly). It's dirt cheap (25/month for up to a dozen searches, or something like that). PenChecks has a service that I've been meaning to investigate for the clients willing to pay me $50 to do it for them to track down one or two people.

I have a 457plan with a rolling 5 year vesting provision, so 2013's contributions vest in 2018 and so on. However, the Participant becomes fully vested at NRA. Is this easily corrected by distributing the excess before 4/15th of the tax year following the year in which the contributions vest? Or is this a bad plan design doomed from the start (assuming the individual will work until NRA). There would have to be some provision like this, otherwise the Executive will ALWAYS forfeit something. I'm wondering if we should set up a separate 457(f) Plan for the employer contributions. I suppose there is no reason not to set up the 2nd plan?

Just happened.

So you would approve the owners request in my example?

That was my hypothetical to prove a point. Either the pool is in or it isn't. If my example seems egregious, the logic should not change just because of a few extraneous details. Even the owner in my example would be eligible to pay for a liver transplant with a hardship distribution without receiving a second glance.

You know what, I'm going to submit this to the ASPPA IRS Q&A. This is ridiculous. There should be a definition somewhere.

I'm the guy the Plan Administrator turns to for advice. I don't like to go to my clients and say "it's up to you" because my clients hired me for my expertise in these matters. I can say "well, it's a little gray but I think it is too aggressive to approve." But I would not say "well it's 50/50 so you need to make the call."

I can't get away from the fact that the spirit of the reg was to make sure that someone whose "roof over there head" was destroyed or severely damaged in a hurricane could get money from the Plan. Because at least one reasonable definition of principal residence would refer to the actual "dwelling unit" I cannot justify extending it to all fixed property on the lot. What about the tennis court? What about the shed holding the lawn mower? The fire pit? The putting green? The horse stables? This appears to be a slippery slope if you go outside the four walls of the house.

How about this perspective: The owner (age 40) of the sponsor lives in a $2MM dollar home. The pool is damaged in a storm and requires $75,000 of work. The hardship is processed for $75,000 to repair the pool. The plan is selected for an IRS audit and the auditor wants to see the support. How worried are you? I would be telling the client that he/she should be inquiring about legal counsel... Now I know, there is a needs question, but do recall that you are allowed to rely on the representations of the Participant with respect to the needs part of it. For all I know, the owners money is all tied up in overseas junk bonds.

But at least when you are buying a home that has a pool, the actual dwelling is included in the use of proceeds. That would not be the case in my situation, so I still find J Simmons argument persuasive

Got a participant pushing hard about how he should be able to use a hardship distribution to pay him back for a pool liner that was damaged in a storm. I say no because the pool is not part of the "principal residence", and when I went to prove my point by looking up that definition I found it was not defined. So perhaps one persons definition of residence might include the pool (as distinguished from say a car which can be moved away). Let me know if you have any light to shed. It certainly seems that there is room for a casualty loss deduction under 165 for the pool liner - but there does not appear to be a requirement under 165 that he principal residence be the property that is damaged.