austin3515

Parent Co buys the assets of Small Co. Small Co has a 401k plan which it will terminate. Paren Co allows loans anjd would like to let the two or three people with loans to roll their loans into the new plan. Do I need a plan amendment to allow this? What sort of paperwoirk is required from the participant to make such an election?

One thing I thought of was to allow people to voluntarily elect to transfer their "nonelective" balances over to the new plan. But I wanted to restrict the option exclusively to in-service distributions that are rollovers to the 403b plan. So I don't want to open the plan up to any in-service distributions, just this specific purpose. The benefit of this is that people with juyst the nonelective will now fall of my audit counts. That works, right?

Am I correct that there is no way to do a nonelective transfer between a 401k and a 403b? Trying to swoithc a 401k client over to a 403b and wanted to know if it was possible to do nonelective transfers from one plan to the other. NOTE: We would not be terminating the 401(k) plan - the union employees would be remaining in the 401k Plan.

We reported everyone for a very simple reason. In 5 or 10 years, we will not have to keep track of who we reported and who we did not. We have much more limited engagements on these 403b's than we do for 401k's, so we dont have everyone's termination dates listed neatly in our Relius Summary of Accounts, the way we would in our 401k plans. For a lot of these plans, all we are engaged to do is a 5500 and an SSA.

Does everyone agree that I should use a 2010 form with the short 2011 plan year entered to file the SSA data? i.e., similar to the treatment of the 5500 reporting?

"The question is whether it's worth the trouble." Yes Yes Yes Yes Yes!!!!!!! Very much so in this instance.

Yes, Basic SHM, and participation is extremely low AND there are a LOT of non-key HCE's.

How many years would you remain a calendar year plan before switching back?

12/31 plan is very top-heavy. Can I change Plan Year-End to 3/1/12 - 2/28/13 (short plan year from 1/1/12 to 2/28/12), or is that just plain crazy?

GP's are less than the loss, but it never hurts to ask! And no, there was no W-2 income. He left the company altogether.

I was saying 402g, but I was sorely mistaken ... Nothing at all to do with 402g. This is the approach I'm taking. No comp = not eligible to make any contributions. Ineligible contriubtions returned to plan sponsor, plan sponsor makes this former partner whole outside of plan. I couldnt do a distriubtion w/ a taxable 1099 code because the participant never took a deduction on it in the first place, so payment directly to the participant from the plan had to come off the list. I've got a short list of options and this just seemed like the best one.

No other employer contriubtions will be made - it's 401k only. Also the money needs to get back to the individual.

Partner has a negative k-1, earned income figure for 2011, but has already funded their 401k. How does this work in the absence of a w-2? Just do the refund by 4/15/12? But then the 1099 will say "taxable in the prior year" but there won't be a w-2 showing a deduction for the corresponding amount?

This is perfect, thank you!

Anyone have a form they are willing to share to let someone elect Roth conversions?

This article from McKay Hochman seems to suggest that an FAB takes the p[osition that delinquent employER contriubtions would constitute a PT. I had always that this outcome was limited to multi-employer plans. If a company is on the brink of bankruptcy and cannot fund the safe harebor it committed to, is this a PT? Assume the owner is not taking a paycheck, or is taking "living expenses" only. http://www.mhco.com/Library/Articles/2011/...rib_111811.html

Until this rises above an informal Q&A, I'm ignoring this. Maybe I'm a cowboy, but I've got much bigger compliance fish to fry (i.e., fee disclosures)

http://us.select.mercer.com/blurb/223522/t...z-ZD01NjczMzY2/ Here's an article from Mercer advising prime + 2%. So, you can say it was "just a comment" but of course it is causing unnecessary attention to be directed towards excruciating minutae (to quote Elaine Benes )

OK, I see I over-stated, but I've read at least one article suggesting that participant loans should increase to prime plus 2% based on that comment. The point is there is a disregard for the vast implications of their every whim.

Oh I agree, but at least a plain reading of 416 makes it clear that the top-heavy rules are what they say. I'm talking about these people from the podium who are essentially writing new laws.

Hopefully you didn't check the box to use deemed 3% rule. Then you would be limited to a 5% averge for the HCE's.

Oh and I forgot about the recent Q&A where they indicated that prime + 2 is what loans should bear for interest. Because for the last 30 years, prime plus one has wreaked havoc all across the country. That extra 1% will really save the world...

In addition, except as provided in paragraph (g) of this section, a plan which includes provisions that satisfy the rules of this section will not satisfy the requirements of §1.401(k)-1(b) if it is amended to change such provisions for that plan year. Thank you for providing the reg citation. I think it underscores beautifully another wild interpretation of a simple rule that has wide spread and dire implications for the retirement plan community. I am of course adding this to the list that includes the fact that forfeitures cannot be used for Safe Harbor Contributions. I don't know who is to blame for all of this non-sense, but I'd like to have a word with that person!!

IRS response. Presently the only exceptions for changes during the year are those identified in Announcement 2007- 59. The IRS will discuss this issue further from the podium Am I crazy, or is this just a false statement. 2007-59 only says that a plan will not be deemed to have impermissibly amended the plan soley because they amend for Roth or hardships. They did not say "and anything else will be deemed to violate that rule." In fact, they lend credence to the interpretation that certain amendments are OK. For the eligiblity question in the cited Q&A, I think that there is a very clear argument that that amendment affects the safe harbor provisions because it changes who is eligible to receive the safe harbor. But by adding profit sharing, I'm not changing anything related to the safe harbor. And realistically, would a plan really be disqualified/penalized because an employer wanted to give their employees more money?

I know this has been done before, but I think it's good to keep talking about it Safe Harbor Plan has no profit sharing option. Am I barred from adding a profit sharing feature? I know the IRS has taken a hard-line interpreting the 401k regs regarding amending SH Plans, but is there anything beyond public statements from IRS officials supporting that strict of an interpretation? I'm aware of the notice that was released regarding the permissibility of adding hardships and Roth, but that notice left the door open for other changes as well.