austin3515

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.

Yes, but are they completely absolving the sponsor of any responsibility? I think not. How could a 316 accept responsibility for the accuracy of census data and that they indicated all of the correct family relationships (as an example)? How can the 316 ensure that deferrals do not take place from severance? Or that the max comp limit is not exceeded on a payroll-to-payroll match? Or all of the other problems that clients face? My point is fidelity bonds and SPD's and taking 35 seconds to sign a 5500 are not problems that need solving.

Well they come in with their marketing pitch about how they will do ALL of this amazing stuff, when what it really comes down to is they will mail out SPD's, which I would be happy to do for a fee. Oh whoops I almost forgot that they will also get you a fidelity bond. What a relief! There's 5 minutes saved every 3 years! And my biggest issue is that every critical problem I have ever seen a 401k plan is not addressed in any way by 316 services: Bad census data Bad vesting Ineligibles participating Payroll processing issues Late deposits Misclassified keys/ownership Controlled group/ASG issues Missing deposits Contributions to the wrong participant Contributions to the wrong source Definition of compensation issues Automatic enrollment issues I could keep going! And they charge a fortune!

I really like these message boards a lot... Thanks Kevin!

OK, but tell me what I'm missing in my analysis. Just before Loan 2, the outstanding loan balance is 8616 and the max is 8616. So how can the new loan be taken?

Attached is the full page from EOB. I think there is only a very limited opportunity to exploit the hole in the regs. I still maintain that what I said before is correct - you can't take that second loan for 8,616. The EOB makes it clear that you're loan balance cannot exceed the maximum available. There example "threads the needle" so to speak. Let me know what you think,. 201610180851.pdf

For the record, I am saying he is wrong. At least I hope he is, because otherwise I would be forced to use this approach in the right situation and it would be a lot of extra work! I am definitely looking forward to rebuttal arguments, don't get me wrong. I've seen ETA right about a LOT of things before, so my curiosity is piqued...

Well, they send out the notice saying it's 30 days, but the penalty is not assessed on the 31st day. As an example, I just did this with a plan where we didn't file because their bankrupt. If I was the DOL I suppose my preference is an incomplete filing as opposed to no filing at all. Anyway, I've never ever had penalties assessed. I was curious to see if others had similar experiences, etc. Do others not see the ASPPA article I posted as an affirmation that this is a pretty "normal" strategy?

I'm looking for the all ammo I can get against this 316 nonsense!

Well, I've done this several times (often on advice of counsel) ad have never seen this penalty assessed (i.e., the missing audit report penalty). FWIW...

"Your maximum available for a 2nd loan is now $8,616." How can you take that loan? Your max available is 8,616 and it is already outstanding after the first loan?

It won't Accept the filing, but it is still treated as filed for purposes of late filing penalties, etc.

What is everyone's position about doing this? Pretty commonly accepted process. See the attached link from an ASPPA article: https://www.asppa.org/News/Article/ArticleID/5554 The audit will be done soon, just not by Monday.

Any response?

Forget about 5500's, there's probably a "few more" 1040's that are hanging in limbo...

I'm surprised there is no relief yet or did I miss something?

Here is an example too. John takes out a $50,000 loan on January 15th 2016 and repays it in full on March 15th of that same year. John cannot take ANY loans until January 15, 2017. Sounds ridiculous but absent these rules, John could take out $50,000 and repay it every 12 months and continue to roll the loan and never actually repay it. The point of these rules is to avoid John essentially never repaying the loan.