austin3515

. Please tell me someone has a direct connection to some senior person at the IRS who can explain that this is beyond idiotic. 1099's are all due 1/31st and the very system needed to file said 1099's is out of commission until half way through the only month they can be filed?? Seriously?

"Here's another a better trick" (2) Initial plan year. A newly established plan (other than a successor plan within the meaning of § 1.401(k)-2©(2)(iii)) will not be treated as violating the requirements of this paragraph (e) merely because the plan year is less than 12 months, provided that the plan year is at least 3 months long (or, in the case of a newly established employer that establishes the plan as soon as administratively feasible after the employer comes into existence, a shorter period).

Here is a secret trick, but don't tell anyone: you can have a new plan effective 12/1/2016 with a 6/30/2017 plan year end. This satisfies the "at least 3 month" plan year rule. And a 6/30 plan year might be nice for a CPA firm.

We initially did it to avoid the angry phone calls after the fact saying "what the heck is this fee?" knowing of course that no one will ever read a fee disclosure. But what we are doing now is putting a simple statement - please note fees may apply, and take a look at the fee disclosure.

Are people sending out distribution paperwork to participants with a notation on the paperwork regarding the fees? We've got "a lot" of plans now, and many recordkeepers negotiate the fee separately for each plan, so it's getting overwhelming to be able to do that. What are other people doing?

I know what is going on here. The Plan is unprofitable and they actually hope you will leave.

Well I guess the question becomes very important if the QNEC would trigger a gateway minimum. If testing must be passed with and without, then a GWM would be required. If not taken into account at all then no GWM. No big deal on the cite, I was just curious to see it.

Well I thought of that too. The only participant terminates, so it's a partial termination. But if I was the IRS and someone skips 3 years of RMD's related to a plan design that really never ever ever has a risk of forfeiture, I might call your bluff on that. I should point out too that were only talking about employer contributions made to this plan. We're not talking about skipping RMD's on accumulated rollover balances. So neat idea, but probably only avoiding a few thousand a year of RMD's. I don't think its worth it. Maybe if they were socking away 200K in a DB plan though? Still it seems risky since no one was ever really going to forfeit.

Not if he does not have 5 years of participation.

What if he retires before completing 5 years, and does NOT terminate the plan before hand, and THEN dies? Doesn't he forfeit everything? Isn't 100% vesting on death only for active employees?

Hopefully they will at least come through with their teaser regarding basing the audit on people with balances.

Sure. It's actually the only option you have. And as your post suggests, the 80/120 rule does not apply to a new plan. A new plan with more than 100 people needs to have an audit. I would commence the audit with haste to minimize the delay in supplying the audit. A few months would likely not be noticed. A year might be!

Mike Preston, I believe you 100%! For my own edification can you point me to the site in the new ECPRS?

I would take the position that the plan called for the allocation as of the last day of the plan year and you just didn't go to the step of moving money around within the plan. In my opinion nothing magical happens when you move money from the forfeiture account to the participant account. For example, should a pooled plan be treated as in compliance and a daily val plan treated as disqualified for precisely the same situation? I think not!

"TPA software sounds interesting, but I'm still not sure it can truly track performance of EE vs ER, or actually if that is necessary." It's borderline insulting when someone comes to a message board focus on 401k PLANS and someone comes in and suggests that the distinguished posters who have been posting for years, and/or have been working exclusively in plan administration for years, somehow don't know what we are talking about. So to make a statement like "I don't believe that a commingled account can be adequately segregated between employer and employee" is basically proving the point to the rest of us who are "in the know" that you are in way over your head. And frankly the biggest mistake you are making is to assume we do not know what we are talking about. To be honest, segregating the account between employee and employer is quite simple. you can allocate the gains to each source pro rata on a spreadsheet once a year. There, I've answered your direct question. But that wasn;t our point. Our point is that when the plan is penalized for never executing its PPA restatement, your client will blame you. Or when they take a distribution of their pre-tax account before attaining age 59.5, they are going to blame you for not telling them it was illegal to do so. Or how about if they contribute $18,000 to the Plan by writing a check to the Plan even though there W-2 wage are only $12,000 that year. Again, your fault. How about they take a loan and send you an amortization schedule with annual installments and you don't tell them the loan is a deemed distribution. I can go on and on about all of the things your client will definitely blame on you. But I've bored myself now. To quote ETA Consulting: Good luck!

Can someone point me to some guidance that says if I want to have a plan effective 1/1/2017 I can send out my initial notices after 11/1? I get that for an existing plan I need to have the notice out by 11/1 but it seems to me that if the plan does not yet exist there should be some room. This is what it says under 408(p): The IRS FAQ's don't seem to address what to do in November and December. And I can't find any articles!

It's just crazy that there is no self correction option, even for small amounts. Frankly I thin there should be a self correction option for deposits that are late by less than a month for example regardless of size. Maybe they will figure that out!

Do you work for an accounting firm? Listen, it's like anything else, the devil is in what you do not know. You should not do this for the same reason I won't do electrical work in my house - which is because I can get burned.

I assume there must be some legal basis for jacking the wage base though? Is it just on a whim, or is it on a funding status?

https://hrlaws.services.xerox.com/2016/10/18/social-security-benefits-and-taxable-wage-base-to-increase-for-2017/ Anyone know why so much? After 117,000, 118,500, 118,500 in 2014, 2015 and 2016 respectively, it jumped to $127,200 in 2017.

Well I guess if I can phrase it a different way, every time you borrow another dollar, the reduction to the $50,000 cap is reduced by the same dollar. Absolutely fascinating!

Wow. I just plugged this scenario into my very own battle tested loan worksheet, and low and behold it is as ETA suggests. If I say the current outstanding loan balance is zero, max loan is 8,616. If I say the outstanding loan is 8,616, the max loan is again 8,616.

Doesn't it depend on whether or not there is a controlled group here? Not enough information provided for that determination. If there is not a controlled group then all testing is applied independent of the other entities, including HCE determination.

Yes but my point is they are assuming liability for those functions that do not expose the sponsor to liability. And all of the things that do expose them to liability are not addressed.

And by the way, me as a TPA, I have procedures in place to identify those mistakes as they happen and help clients correct them. I hardly think that the 316 is going to pony up lost earnings for the client's mistakes.