austin3515

401kAZ, I've often wondered why the DOL chose the "Investigator/Investigation" terminology as opposed to "auditor/audit" which employers are much more comfortable with. After all, investigations tend to take place after some suspected wrongdoing (at least that's how it works on Law and Order ) . I understand that approach for those employers/fiduciaries who have abused their role as fiduciaries (e.g., not sending in 401k for a prolonged period), but why not "open an investigation" after wrongdoing is uncovered during an audit? I think at the end of the day the DOL "investigations" are very comparable to an IRS audit, and my experiences with the DOL auditors has been very agreeable, so from my perspective it is an "investigation" in name only - functionally it is really an audit. But it does certainly start off as more of a confrontation. I've had clients ask me if they need an attorney to represent them, which of course they do not (assuming normal circumstances). I'd be curious to hear your perspective.

Did you read all of the posts above Lou S.? We all would have said the same thing before the post started. I don't think it as simple as you suggest.

But it's not an irrevocable election, it is a mandatory employee contribution. I think there is a difference, don't you?

I looked at my PT from Corbel as well and in our prototype the key definitely gets the 3% THM from Er Contributions. I suppose it's a question of whether or not that approach is mandatory, and it seems to me anyway that is not (of course it's mandatory to do what the document says). I agree it, must be a VS document, or maybe it's the PPD version of the prototype (as opposed to the Corbel version). What a great discussion.

And it raised a question for me on 403b's. 414h seems to indicate that mandatory employee contributions can only be pre-tax for governmental agencies that sponsor these pick up plans and meet a whole slew of requirements. So, now I look at the TIAA 403b document and it allows for mandatory employee contributions. Yet the plans are sponsored by 501c3's. Are these supposed to be after-tax? Is there another exception out there for 403b plans?

Well how about this, how about I just always file 5500's for the plan. Seems silly to pay a fee if I have yet to miss a deadline.

So you interpret Corbel's document language above to require a 3% ps to a key who deferred 3%? I don't see anywhere that Corbel has excluded the deferrals for purposes of the minimum allocation. Recall that at the beginning of the paragraph, the THM goes to ALL employees: "the sum of the Employer contributions allocated to the Account of each Employee". As such, if there is some adjustment to keys calculation it must be stated. Note that it is very clearly stated with respect to the non-keys.

I did use the DFVC once for a plan that never filed the top-hat, but we went back for 3 or 4 years on that one. This one, the 5500 is not late. Everything I have read until all of your posts is that the top-hat filing was in lieu of 5500's - no top-hat = 5500 filing requirements. So I'm surprised at these responses. Has anyone ever seen a nice long article that describes what to do in these situations?

Oh, and please let me know if there is anyone who has written up how to prepare a 5500 for a nonqualified plan. This happens to be a 457.

OK, so if I missed that stupid 120 day window, what do I do? Plan is effective 1/1/2013, calendar year plan. Can I just file the 2013 5500 and then file the top-hat filing?

Their answer is in the context of this question: M-20 Q. May elective contributions be treated as employer contributions for purposes of satisfying the minimum contribution or benefit requirement of section 416©(2)? The first part of their answer is "yes, for keys...". Combine that with the wording in the Corbel Document which is perfectly lined up with that interpretation and you have me convinced it is so, however ridiculous.

Same here Bart. I got really excited for a minute about non-shareholder physicians and then realized, nope, they're not keys. So really it changes nothing for me, but I suppose it makes me a better TPA for having known it.

1.416-1 Questions and answers on top-heavy plans. M-20 Q. May elective contributions be treated as employer contributions for purposes of satisfying the minimum contribution or benefit requirement of section 416©(2)? A. Elective contributions on behalf of key employees are taken into account in determining the minimum required contribution under section 416©(2). However, elective contributions on behalf of employees other than key employees may not be treated as employer contributions for purposes of the minimum contribution or benefit requirement of section 416. See section 401(k)(4)© and the regulations thereunder. This Question and Answer is effective for plan years beginning after December 31, 1988. I am dumbfounded right now... Found this reference in the EOB. Practically it is of little consequence, but this is quite interesting indeed.

I have to say that it sounds a lot like blackmail as described. I suppose only those with deep pockets who are willing to "sic the lawyers" are afforded such protections.

masteff, I have no problem if they want to do away with the windows inside a larger plan. Because they have a viable option available. It's the 5 person plan with $100,000 that I would worry about. I don't even know what I would tell them to do. Honestly, there is no alternative that is priced below say 2%. Does anyone disagree with that? Well I guess American Funds RKD, but then they have to pay for recordkeeping out of pocket.

Great solution. As soon as brokerage account providers spend millions of dollars to revamp their software to provide for such limitations I promise to take it back. But I won't hold my breath. The Fidelity's and Schwabs and TD Ameritrades do not have that type of functionality. And as a general rule participants are given trading authority on the accounts because of course the Trustee would not want to be the one calling Fidelity to request trades.

Will someone please tell me that not even the DOL would be this rash?? There is literally nowhere else for the small plans to go... http://lawtonrpc.com/lrpcs-weekly-insight-brokerage-account-windows-shutting-in-401k-plans/ What is the likely outcome? Most experts think the DoL will: Establish fiduciary guidelines and limitations for offering brokerage account windows;Require more notices for plan participants who have access to brokerage account windows;Bar their use as the only investment option in a retirement plan; and

This is a "Consent to Extend the Time to Assess Tax on a Trust" Basically the IRS is auditing 2010, is afraid they won't finish their audit in time and wants the taxpayer to extend the statute of limitations for another year. It says right on the form: "The taxpayer(s) has the right to refuse to extend the period of limitations or limit this extension to a mutually agreed-upon issue(s) or mutually agreed-upon period of time." Question: Why in the name of all that is logical would a sponsor sign such a form?

http://www.irs.gov/pub/irs-drop/rp-14-28.pdf

I would like to clarify one thing - the most significant variable in determining the benefit is receivables, but for example, the payment is also determined based on number of years of service (the more service the bigger the benefit).

Medical practice has a deferred compensation plan. When a Dr. leaves the practice they are entitled to a deferred compensation payment which is almost entirely derived from the collection of receivables. Is this payment for services rendered (subject of course to 2.5 months/last day of plan year) or ineligible deferred compensation, because it only becomes payable after severance from employment? Or is the answer, you really need to dig into the particulars of the contract? This must come up often, so I'm hoping someone can offer a rule of thumb!

Never sending in 401k money is the one that I have seen in the small market. I have to assume that personal gain cannot be a consequence of the breach in order for insurance to kick-in. And of course that's where the small plan market gets into trouble - putting their own interests ahead of the plans (i.e., investing the plan's assets in real estate that they use in the summer, never sending in 401k, loaning money from the plan to another business they own for cash flow crunch, etc). I just can't see how the insurance policy would cover such breaches, but I would be curious to hear from someone more in the know. Now, if you invest in a non-prohibited transaction investment that becomes worthless, or perhaps you default a 65 year-old's $500,000 rollover into the aggressive growth fund just before the bubble bursts, then I can see where fiduciary insurance would pay-up if it came to it.

OK, you got me. I meant how many fiduciaries were sued. Answer to my question: None. I don't know that for sure of course, but I'm pretty sure

Perhaps you can answer this question: In 2013, how many plans whose assets were invested in mutual funds on a standard platform, with assets of less than $20M, were actually sued for a fiduciary breach? To read all this nonsense on "fiduciary liability!!!" you would think there were hundreds if not thousands. I suspect business owners have uninsured risks that dwarf the likes of their fiduciary liability with respect to the plan without a second thought. I should think by now I would have witnessed something in my career if it really was so prevalent.

Now that is hilarious