austin3515

Kirsten does your firm handle ROBS on a regular basis? Perhaps I will refer her to you... The more I think about this the more I want out... She really needs someone with more expertise. I just said in my engagement letter with her "Hey you're on your own for this ROBS stuff, I'm just helping you with the 5500 and eligibility,." If not do you know of any who do? The people who do these decided it's probably more profitable and less risky to just set these things up and tell the clients they are on their own...

It's a big thing these days. people charge like $10,000 to set these things up so people can use retirement assets to start a business (Roll-Over for Business Start-ups). For a lot of people without the option they cant start their business, so I get the temptation. Lots of headaches for sure for us to administer, but I certainly see the motivation... No one thinks the IRS's chosen acronym is a coincidence!

Hmmm.... I don;t meet this requirement....

In my example it is one single person. For 2014 through 2016 the attorney is telling me that we use the 50% correction, and for 2017 through today we can use the 25% correction. I'm cutting corners in terms of the precise dates, but that's not really the purpose of the question anyway. The true purpose is whether you can split the baby as they say and calculate using the 50% for the periods outside the SCP/Significant failure window, and 25% for those inside. This guy is listed as an ERISA "super-lawyer" and has loads of accolades. He is definitely the real deal.

I have an excellent ERISA attorney telling me you can split it. He says he's confirmed with the IRS. Anyone else been down this road? I'm taking it because it;s the best answer for my client, but I'd like to tea it up as "isn't this great attorney I recommended for you?" and that most people were under the same impression as me...

But if I close the stock to new offerings won't I run afoul of BR&F? The stock is only offered to the owner? The stock has been available for about 5 years now. I inheritted it from a CPA I work with a lot and tell you the truth I regret it. Thank you Kirsten!

Failure began in 2014 and goes all the way through today. Question: Can use the 25% correction option for the most recent years? Or because the failure goes back so far, do I have to use the 50% to correct for the whole enchilada?

What does a small start-up need to disclose to participants about employer securities held by the Plan, in particular for those who do not have any money in the Plan. All participants have signed forms confirming they have been offered the opportunity to invest in the stock, but none have taken up on the offer. Should participants be receiving income statements? Do we just share the valuation of a share of stock?

Slider, good call! I remember even that a raffle for an iPad is not allowed. i.e., if you sign up for the 401k, your name is entered into a Raffle for an iPad. Subtle but it's very clear a match is the exclusive means of rewarding participation in the plan.

Not trying to do something crazy. I'm asking crazy questions to try and get to the bottom of what the applicable rule is. I'm talking about bonus and overtime type stuff. Nothing remotely close to a universal availaibility issue.

OK Kevin C, so BF&F is the issue? That means I have a LOT of flexibiility to exclude a lot of comp in a SHNEC plan, then agreed?

Ahh, but why am I subject to 414s? For example, do I ever have to satisfy the comp ratio test for a definition of comp for elective deferrals? I thought I had lots of flexibility on the defintion as long as I used a safe harbor definition of comp for ADP testing?

But what about a Safe Harbor Nonelective Plan? The paragraph sited above deals exclusively with a Safe Harbor Match Plan (the SHNEc is 401k3b). To me that means I can essentially use any exclusions I want with a SHNEC, but is anyone aware of any red-lines? For example, what if I excluded all regular wages and only bonus wages were eligible? I'm using an extreme example based on the assumption that some rule somewhere must prevent this. What rule would prevent this?

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?