austin3515

In my case the missed RMD's were for owners so we are concerned that they are going to stick it to us. We don't have a great story for why it was missed, just a miscommunication between us and the CPA. We were thinking we could sweeten the pot on the VCP if they paid the taxes when due so even the Fed were in the same position they would have been otherwise...

They're not getting paid for investment advice in my opinion. They are getting paid for compliance services. I don't think it would make them a fiduciary any more than if an ERISA Attorney advised them regarding the transaction.

2016 RMD missed for an owner :(. ERISA counsel suggested reporting the income on 2016 1040. Do you guys think a code P on the 1099-R would do the trick? Not sure if it is 100% the right code, but man it seems like operationally the easiest thing to do...

Does anyone have a sense for what a normal number of days would be not for the blackout itself, but to be out of the market in cash. I know plans typically go into blackout before the liquidation date to ensure everything has a chance to settle, and on the other end it often stays in blackout until everything is completely up and running which at times is after the repurchase. I'm looking for a typical amount of time to be sitting in cash. Are there any statistics? I have some participants in a blackout complaining it was too long, and I don't have any way to evaluate whether or not this particular conversion was atypical or what. I should note that blackout did not extend beyond the window disclosed in the blackout notice. Obviously the market is either up or it is down in these things, and as "luck" would have it, the market was up in this particular time frame. I did not think it was appropriate or advisable for me to mention any specifics here so I won't.

Unless something drastic happened use the DFVC. The whole point of the program is for what you described, and that's why the fee is "so small" as compared to the $15,000 IRS cap. I wouldn't bother asking for abatement personally unless there were extenuating circumstances, like the plan admin was out on a medical leave as an example. I suppose you run the risk of aggravating them if you even ask.

I suppose you could really amplify this design if you were comfortable relying on Average Benfits testing to boot. The nondiscriminatory classification threshold being greatly reduced would allow you to keep out a greater percentage of the employees. Interesting...

Mr Bagwell, if you go back and look at my post you will nogte that I qualified it based on the fact that both plans pass coverage. So the hygienist plan has just NHCE's so that plan passes. Let's say there are 3 hygienists. And the dentist's plan has 1 HCE, and 4 receptionists, and 3 dental assistants. To me that is 7 out of 10 NHCE's benefitting in the Dr.'s plan which passes coverage. Is it a lot of extra work? Sure it is. Maybe it's not worth it. But it wasn't something I was going to propose to a client, just a hypothetical fact pattern to augment my understanding of the rules.

yeah I did not know that!

Thanks for the clarification Belgarath!

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?