austin3515

Well that is a totally different purpose, in that case the cited regs deals with whether or not you can exclude a capital gain on the sale of your home from income. Obviously there is no rental agreement between the lovebirds :) I'd still be single if I made my wife sign a lease on the condo we lived in while engaged! I just think maybe you are putting rules into the reg that just are not there. It just doesn't mention anywhere a requirement that the participant be the owner of the property. Because living somewhere you do don't own (or perhaps if you';re name is not on the lease) happens ALL the TIME, it seems to me that we give them credit that they considered adding this requirement and simply opted not to.

Belgarath, my understanding is that for needs we can rely on the participant's representations unless we have actual knowledge to the contrary. What do you think?

But there is a catch here. It is the fiancée's house. She lives with the fiancée but the mortgage is not in her name. The distribution at the most broad level is to prevent the eviction. "(4) Payments necessary to prevent the eviction of the employee from the employee's principal residence or foreclosure on the mortgage on that residence;" Based on a literal interpretation of the regs it seems to me she would qualify.

Well, there will have to be 2 W-2s I imagine because half the year was paid directly by employer while 2nd half will be paid by PEO. But is that relevant? Because they are administering the plan at year end they can simply ask for missing data. My question has more to do with whether the Plan that is being swallowed up has to have all of its contributions funded before being "consumed."

Stand alone 401(k) plan is merging into the PEO plan of an employee leasing organization. Stand alone plan is a 3% Safe Harbor Nonelective, calendar year is plan year. Merger is happing effective 6/30/2017. Do people agree that I do not need to fund the safe harbor to the "stand alone" plan pre-merger, because the PEO's plan is the continuation of the stand alone plan anyway? As such we can just fund the 3% Safe Harbor once at year-end. Any articles on this?

And by the way, it is not part of the required aggregatin group because no key is eligible, so no THM. And no 3% Safe Harbor neither.

Mike you're quite right - I meant 6% for the HCEs and 2% for the NHCE's - so the people in plan B are getting less than the gateway. Basicaly if you're clever about splitting your plans out you can reduce the gateway. I think that was my point, and I had not realized that before. So have a separate PS Plan for the "hygienists", which you make sure does not cause a converage problem, and poof you can give them 1% PS even thought the GWM might be 5%.

Kevin C, THANKS!! The "smoking gun" as it were!

When should the document be effective? My document has a box for PPA restatement, and I recall that this box invokes all of ther egulatory effective dates. Should I restate effective 1/1/17 and let that box implement all the regulatory effective dates? I am making some plan design changes, so would prefer a 1/1/17 effective date.

Let's say Plan A is cross tested and giving 6% contribution, and Plan B gives only 1% contribution. Is there ever a scenario where you have a gateway issue given that both plans pass coverage independently?

Good question - see below, and note again that it does not pull in all seasonal employees. It is forcing to put an hours of service requirement in. I don't have an hours threshold in my situation, so my "thought" is I can use the "other" field and just enter "Employees whose employment begins in June and ends in September." or something like that. Part-time/temporary/seasonal Employees. A part-time, temporary or seasonal Employee is an Employee whose regularly scheduled service is less than ________Hours of Service in the relevant eligibility computation period (as defined in Plan Section 1.88). However, if any such excluded Employee actually completes a Year of Service, then such Employee will no longer be part of this excluded class.

ETA - so a company has 2 factories making the same widgets, one in Texas and one in Wyoming. You would advise against excluding Texas from Wyoming's plan (assume Texas has no plan)? What time of year they work is NOT related to how MUCH they work. This is way frustrating... I know there was a similar conversation recently about interns now that I think about it...

ETA, lots of plans exclude "per diem employees" - so in you're opinion that would require the failsafe language? Almost exclusively they would be part-time employees.

HEre is my rebuttal: If I indicate that employees whose employment is exlcusively between June and September are excluded, does that reference the amount of their service? What if I wanted to exclude 3rd shift employees? Can I do that? Why is that any different? Also, my seasonal employee exclusion does not reference amount of service in the definition of Seasonal Employee - a reference to hours based on the site I provided certainly appears to be a pre-requisite for a problem.

I was reading through "Part-Time Employees Revisited" https://www.irs.gov/pub/irs-tege/qab_021406.pdf The include Seasonal Employees along with part-timers, but they make it (I think) pretty clear that what they don't like is when part-time or seasonal employees are defined as employees who work less than X hours in a particular period. But what if I have a group of employees who are being excluded solely because they work during the summer months exclusively without regard to how many hours a week they work. I know I can exclude them; the real question is does the document (and operations) need to make them eligible if they hit 1,000 hours in 12 months (i.e. if they meet max eligibility under 410a)?

Are people processing the PBGC filings on the PBGC website or using software? We are considering using FT for this - we currently do it on the PBGC website. Just curious if there are features about it that make it worth the additional investment (aside from the obvious, which is the pre-filling of all of the demographic data based on the 5500, that one I know about). Will it show filing statuses, etc?

OK well listen, I had the idea. Personally I think it is a good one. I'm going to let my Senator worry about the politics, I'm just way too logical to worry about that piece of it!

Oh MoJo, I guess you got up on the same side of the bed as usually do. Do I think that legislation that helps the "poorest" Americans preserve their retirement nest-eggs will prove to be a popular idea on both sides of the aisle? Yes, I do. Realistically we are not talking about a change, at least in my opinion, that is going to break the bank. I know that 1/5th of the US economy was not important enough to get a CBO score before passing legislation in the House, but I think my change is critical enough to warrant that simple task. I'd venture a guess that most people will default. I'm dealing with a situation now where someone took a $40K loan and his employer was sold just 6 months later. He either writes a $39,000 check or defaults.

I know what needs to be done... They need to allow people to continue making payments to IRAs after they terminate. Your loan called for $100 twice a month? Deposit $200 to your IRA (no less than $600 a quarter) and you can defer paying the taxes. Banks will set up ACH's. They will report whether or not the participant "defaulted" by not making the necessary payments each quarter. We'll find a way for the plans to tell the banks what the loan specs are. I can see a PenChecks jumping at the chance to add "participant loan IRA's." I'm going to write my Senator!!

Anyone have a good definition of management services? I figure if a dentist tells you this procedure is running late, the assistant is going to listen, or if the dentist tells the hygienist to take X-Rays, they're going to do it. Isn't that managing? What if this particular location the dentist is the only person there to "supervise"? Couldn't it be a gray area? And why wouldn't every dentist be set up this way if it's that easy to circumvent the rules? Another thought, at some point the dentist starts to sound like a common law employee, right?

http://lawtonrpc.com/401k-loan/ Another article from our scholar. Nothing flagrantly wrong here, and he has dropped his double taxation argument. Perhaps we won him over!

Found it!

She is out on leave - she has a year to cure to the loan, and I think she gets the grace period after the end of the year (I..e, it goes into default in a year, and she then has a grace period). But double check the grace period thing. I think I had a thread on this out here once upon a time.

Because the match goes in as a nonelective contribution, do I need to be concerned with 401(a)(4)? I can't find anything in there talks about there being no need to test the corection itself for nondiscrimination.

Yes, it is absurd. What we are deliberating now internally is how hard we "look" for this when calculating a year-end match. It seems like a giant pain in the @$$ to try and find these. The amount of extra work coupled the amount of effort to find a possible small overpayment on match. I know, I know, we will do the right thing. Just annoying.