austin3515

yes

All hired in 2016. So should work for 2017 and 2018. By 2019 they will be eligible for the SEP. May not be worth it to save the 2%, but at least it's an option...

Owner has 5 years of service and the only eligible employees have just 2. Owner sponsors a Safe Harbor 401k providing the top-heavy minimum 3% as a SHNEC. Can he maximize his 401k in the 401k plan for 2017, and contribute the max to his SEP account for 2017 but not give any additional contributions to the employees (because they are not SEP Eligible) (i.e., in lieu of bumping them up to the gateway minimum). My research tells me yes indeed this works, but please let me know your thoughts!

Did you already get your opinion letter? Still waiting on mine...

I have to tell you I was blown away at how beautifully the mapping worked by Corbel. We checked, believe me (and I know that was your point, that not everyone checks), but it simply never happened where something like this was an issue during this process. I often quote Reagan - "trust, but verify." Now I saw another provider who switched documents during PPA who for example did not exclude HCE's from the Safe Harbor Match. Talk about the doo-doo hitting the fan... Btu also a great example of what I mean. It simply never would have happened without switching document providers--the two are inextricably linked.

jpod took the words right of my mouth. Smart-money is on explanation 1.

TPA needs to make sure their malpractice policy is up to date . Out of curiosity, take a look at the document before the PPA restatement. Sometimes TPA's switch document providers and as a result the conversion process is hyper-manual and therefore prone to error (such as the error of failing to check the box permitting Roth 401k). That's not a correction, but should make the VCP a slam dunk.

Such a cynic

Or you can get 2,857% of that return by investing in the KGPF

From Bank of America's Website: "With at least $10,000 and a 12-month commitment, you can earn a steady 0.07% for the term with our Featured CD."

Given the fact that it includes the word "guaranteed" suggests that you are giving up risk and giving up return. I am with you 100%. What I am more mystified by is that there is not more being written out there about what this means for a ubiquitous investment product.

http://www.great-westclassaction.com/frequently-asked-questions.aspx#a1 Just curious what other people are telling their clients who are getting these letters. I assume those of you who work with Empower are getting these. It's a class action suit surrounding their Key Guar. Portfolio fund (i.e.,. their guaranteed interest fund). From what I have read, the impact of this suit could be wide reaching. It is essentially a rebuke of investment gains that exceed the crediting rate, even though of course if returns are less than the crediting rate the fund investors receive no losses (which is kind of the definition of insurance). The excess of course is compensating Empower not for the recordkeeping costs, but for the additional risk they are taking. It seems to me Empower was picked for this suit because they are the number 2 recordkeeper, and not because they are the only ones who have a product like this. I am especially curious to know if any write-ups have been done in the context of what this means for the industry as a whole. To me the implications seem vast.

"Anyone know how to to treat a "743(b)" election? It's something like depreciation. If anyone can point me to something on point I would appreciate. Trying to see if I treat it like section 179. So... Box 14A $250,000 Sect 179: 0 "743(b)" related to a step-up in basis in the acquisition of a business: $25.000.

Anyone know how to to treat a "743(b)" election? It's something like depreciation. If anyone can point me to something on point I would appreciate. Trying to see if I treat it like section 179.

They just did not explain what they meant at all. Shocking because the IRS never makes consequential statements that leave us nuts and bolts people wondering how the heck we actually implement things.

So tell me like I'm stupid - what do you think I should do? Deposit the 20% as an additional employer contribution?

"well, I guess since it is VCP you can always ask the friendly IRS folks and tell us what they say." I did - she had no idea!! I'm just going to have them put in the 20% to put an end to this. It's a relatively small amount of money.

1. Participant had a loan that should have been defaulted and taxed to the participant in 2015. Right 2. Instead, the loan was offset when participant terminated in 2016 and closed his account. For 2016, the participant was issued a 1099 showing a taxable distribution equal to the sum of his investments plus his unpaid loan.. 3. Because there were additional assets distributed when the loan was offset, 20% withholding was done on the entire taxable amount. As part of the VCP requirements, when a loan is being taxed in year of correction as opposed to year of default "any applicable income tax withholding amount that was required to be paid in connection with the failure (see § 1.72(p)-1, Q&A-15) must be paid by the employer" (2016-51 6.01(1))

In this situation, the loan should have been defaulted in 2015. We went to correct in 2016 and he then closed his account in 2016, so it was all done together at the same time.

OK, so if he rolled his money over it is moot, no correction, right? But alas, he did not, so mechanically what do I do? A deposit equal to 20% of his loan balance into his account?

Long story short, no payments were made on a loan, which should have defaulted in 2015. This was figured out in 2016. In the midst of implementing the correction, the participant terminated and opted NOT to repay any portion of the loan. 1099 was issued in 2016. The IRS is basically forcing us to use the "taxed in year of correction instead of year of default box" which sounds reasonable enough, EXCEPT that that correction requires the plan sponsor to pay for any related withholding. Does anyone know what that actually means? Does the plan sponsor make a contribution equal to the withholding to the participant's account? If the participant rolled over their account, there is no withholding. Is plan sponsor off the hook?

Our decision so far has been not to take advantage of this. I'm sure the IRS in 5 years will come to the realization that the fox cannot be trusted to guard the henhouse.

Why, because it's less work of course :)

Well this "memo" was written by the IRS. I think the huge gaping hole in this system is that the participant is required to keep the documentation. That is just a hilarious assumption.