austin3515

OK, I found something: 1.401(k)-3(c)(6), (iv) Restrictions on types of compensation that may be deferred. A plan may limit the types of compensation that may be deferred by an eligible employee under a plan, provided that each eligible NHCE is permitted to make elective contributions under a definition of compensation that would be a reasonable definition of compensation within the meaning of §1.414(s)-1(d)(2). Thus, the definition of compensation from which elective contributions may be made is not required to satisfy the nondiscrimination requirement of §1.414(s)-1(d)(3).

Plan excludes bonuses for purposes of calclulating deferrals, but NOT for purposes of calculating the Safe Harbor Match. Do I need to pass 414(s)?

I didn't read everything written but Relius' Corbel VS prototype formatted document includes a blanket exclusion for non-cash taxable fringe. I think it's worded more like "if the employer elects" as opposed to a hard and fast rule. It's in Section 12 if you need it.

How about this: Taxing them on distribution fees that they paid is no different then taxing them on recordkeeping fees that they paid. They reduce their account value in exactly the same way and are expenses of the plan related to administering the Plan.

They definitely do. It is almost universally done that way.

In 33a of the above-referenced Q&A it says: In addition, the plan administrator, employer/plan sponsor, or person authorized to sign on behalf of the DFE, including the “jurat”, must manually sign a paper copy of the completed Form 5500 or 5500-SF, as applicable, and the service provider must include a PDF copy of the manually signed Form 5500 (without schedules or attachments) or 5500-SF as an attachment to the electronic Form 5500 or Form 5500-SF submitted to EFAST2. Oh well... If anyone knows what a "jurat" is let me know. One time I called a guy a "jurat" in a bar and had a black eye before it was all done! I think he didn;t like me from the get-go once I told him I was an international man of mystery - he was not the least bit impressed!

We'll just have until they issue a set of FAQ's about how we should go about filing 5500's for our clients.

I _____ you not, I began writing to make this exact point and then decided to let it go :). I felt freed to mention this because Larry already has relinquished the last word

OK I'll let you have the last word

My bad thanks for clarifying...

Do you agree that the 415 limitation year for a 403b is always the calendar year unless this election is made?

415 Limits: (e) Limitation year for individuals on whose behalf section 403(b) annuity contracts have been purchased. The limitation year of an individual on whose behalf a section 403(b) annuity contract has been purchased by an employer is determined in the following manner. (1) If the individual is not in control of any employer (within the meaning of §1.415(f)-1(f)(2)(ii)), the limitation year is the calendar year. However, the individual may elect to change the limitation year to another twelve-month period. To do this, the individual must attach a statement to his or her income tax return filed for the taxable year in which the change is made. Has anyone ever filed such a statement?

So I take it you also advise against having fidelity bonds?

See questions 32 and 33. https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/efast2-form-5500-processing.pdf

First and last one!

I guess we have a different definition of chutzpah :)

What do when a participant for whom a SEP contribution is due termed a long time ago and is not responding.

that is the textbook definition of chutzpah!

IS anyone using DocuSign to get clients to "manually" sign the Form 5500? Using Docusign is MUCH easier then the whole credential process, and people are getting more familiar with signing documents this way. Has anyone ever asked the DOL if this is acceptable?

Maybe its just 162? Anyway, here is a link. I guess them call them "BOLICOLI" plans. https://www.bolicoli.com/162-executive-bonus-plan/

Insurance company trying to sell a 162f plan to a client. From what I can tell, the company can pay premiums on a whole life life insurance policy for an executive. The premiums paid are taxable to the executive and the executive owns the policy personally. Why is this different than giving the executive a bonus and having the executive go out and buy a life insurance policy on his or her own? I presume there is something to it because the IRS gave this it's own section of the Internal Revenue Code. But if I put on my cynical hat (which is handy at all times!) perhaps the insurance lobby requested this change so they could market it as a "162(f) plan" which just sounds like it must have some tax favored status.

I think a more thorough reading of my messages will make it clear that I was suggesting that using a 401k for a non-profit has the disadvantage (as compared to a 403b) of requiring the ADP test.

Imagine the honor of having Austin Powers as a referral source... Even I would be proud!

Message boards just don;t have the same credibility. All sorts of weirdos out there writing under aliases and everything (how trustworthy is that!) For all I know Dr. Evil hacked into your account is just impersonating a tax expert!

I get the question 3 or 4 times a year, so I would have assumed that someone would take the time to write something up to explain it. People are always googling deferred compensation plans, and there are tons of articles. I would expect one of them would say "but it doesnt make sense if you are the 100% owner because of a) b) and c)." Lord knows there are thousands of 101 level articles on all topics 401k.