Kevin C

You will need to be more specific about what kind of grandfathered plan it is. For example, if it is a pre- 5/7/1986 state or local government sponsored 401(k) plan, 1.401(k)-1(e)(4) addresses which plans are treated as being established prior to 5/7/1986.

We've always done complete accounting for plans with pooled accounts. We do it for one person plans, too. Yes, it can be time consuming and yes it can be a pain, but I've seen enough weird things on statements that would be missed if you back into the earnings that I agree with my boss that it needs to be done. We've had many transfers between accounts where not everything gets moved, "corrected" transactions that are not corrected properly and even an occasional investment dropping off of a statement. We've also taken over plans where the prior TPA backed into the gain/loss and the Trustee asks us what do we do about this other plan investment that isn't included in the valuation? If the accounting takes an abnormal amount of time, we charge extra. If the volume of transactions is causing the accounting to be difficult, to me that is a reason for the Trustee to stop the churning in the account, not a reason to stop doing the accounting.

Rev. Proc. 2007-44 (as modified) has the rules for the 6 year restatement cycle. The words "safe harbor" are not in the Rev. Proc. Announcement 2014-16 sets the two year restatement window. It does not mention "safe harbor" either. This is our third restatement cycle for DC plans since safe harbor 401(k) plans became available. If the IRS really intended an earlier deadline and special rules for the timing of restatements for safe harbor plans, my opinion is that they have had plenty of opportunity to say so, but have not done so. There is nothing wrong with having a restatement signed in December and effective January 1, but I see nothing that requires it if you are not making any changes to the safe harbor provisions. As mentioned, a mid year amendment can not change any of the safe harbor provisions for that year. From 1.401(k)-3(e)(1): "In addition, except as provided in paragraph (g) of this section or in guidance of general applicability published in the Internal Revenue Bulletin (see §601.601(d)(2)(ii)(b) of this chapter), a plan which includes provisions that satisfy the rules of this section will not satisfy the requirements of §1.401(k)-1(b) if it is amended to change such provisions for that plan year." If you are making changes to the safe harbor provisions as part of the restatement, then it would need to be signed before the beginning of the plan year and effective on the first day of the year to comply with 1.401(k)-3(e)(1).

ADP and ACP are separate tests and under the regs, the 401(k) portion of the plan and the 401(m) portion of the plan are considered separate plans. The respective disproportionate allocation rules for each test apply it to contributions used in that test. I read that as applying them separately. But, before you get there, the answer to the first step in determining whether you can do this is "What does the Plan say?" If I had a nickle for every time I've heard that, I'd be retired.

The disproportionate rules do apply to both the ADP and ACP tests. The main question is does your plan document allow the allocation you want to do?

I'll give this one a try. The Rev Proc cited above (and its updates) says the IRS will not issue determination letters for pre-approved plans where the employer has reliance on the opinion letter. I don't see anything that changes that if they adopted discretionary amendments to the prior document since the prior restatement. 1. Rev. Proc. 2007-44 Section 5.03 gives an extended remedial amendment period for discretionary and interim amendments adopted since the prior restatement cycle. If there are any issues with the amendments, they should be corrected when the VS restatement is done. I think that eliminates the need for a determination letter on those amendments. 2. If you are saying the plan has been using an individually designed plan since the 1980s and has never submitted for a determination letter I would suggest they hire a good ERISA attorney. If you are saying they missed a required restatement, a VCP non-amender filing is the solution. 3. See 1.

The plan has some flexibility in how it handles post-severance compensation. The answer should be in the plan's section 415 amendment. In our VS document, taxable payments from a nonqualified unfunded deferred compensation plan only count as Compensation if they would have been paid at the same time if the employee had continued employment.

I may not understand the question, but I think you are over-thinking this. If you are asking if the plan can be amended now to change the discretionary match provisions so that the match level that will be declared for the current year (for example, a 50% match on deferrals not in excess of 6% of comp) is applied for the year as a whole instead of being applied payroll-by-payroll, I don't see how that could be a cut-back, other than maybe a few pennies from rounding. If the match level is consistent for the year, how does someone get more match under a payroll-by-payroll calculation? Even if you did have a cut-back, your document likely has a provision like ours: "No amendment to the plan shall be effective to the extent that it has the effect of reducing a Participant's accrued benefit." I read that as saying a participant who would be cut-back by the amendment will receive the protected amount regardless of the amendment. If they get the larger of the pre-amendment or post amendment match for the current year, there is no cutback.

Allowing an unrelated employer to participate doesn't seem to fit the conditions needed to correct this under SCP [Rev. Proc. 2013-12, Section 4.05(2)]. VCP is available to correct all qualification failures [section 4.01(2)], with a few exceptions that would not apply here. I don't see any reason why you can't correct this under VCP.

I renewed in June 2012 and did not receive anything from the IRS. After about 6 months, I sent an e-mail asking about it. They didn't respond. I finally decided that I'm ok since I'm still on the ERPA list.

I'm guessing this is an eligibility question, as in does the unpaid service for the spouse count for eligibility? The problem is going to be with the plan's hour of service definition. Ours starts with: Hours of Service include each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Employer. Even the equivalency options require an "hour of service" as defined in the plan during a specified period to get credited for hours. We've had this come up a couple of times and reached the conclusion that no, the spouse's unpaid services do not count as hours of service.

The withholding amount reported on their 2011 Form 945 determines their deposit schedule for 2013. Per the Publication 15, Circular E: http://www.irs.gov/pub/irs-pdf/p15.pdf It's in section 11, starting at the bottom of page 25. Is there more than one plan being reported as 945 deposits under the employer's EIN?

I read your question the same way Bird does, that the correct amount was deposited, but not in the correct account. If so, you should be able to self correct. The general correction principles in Rev. Proc. 2013-12, section 6 will guide you. The idea is to put the plan where it would have been if the error had not occurred. I would start by trying to identify the investments purchased with those extra $5500 deposits in the brokerage accounts. If the deposits were really short and you can show the shortfall was in the required safe harbor contribution, you would still be able to self correct.

In my experience, the length of the blackout is determined more by the old service providers than the new ones. We've had a few that wait one to two weeks after wiring the funds to send a data file. Then, when you get the file, it may or may not be usable and it may or may not tie to the amount sent. If the old firm does their job correctly, a 5 week blackout is ridiculous. If they don't, it may take that long to sort out the mess they created. As already mentioned, there is no valid reason to hold new deferrals during the blackout.

I would still merge on December 31.

Our document doesn't have any special provisions dealing with eligibility for employees on a leave of absence. It defines an employee as someone employed by the employer. If this came up in one of our plans, I would use a 7/1 entry date. As pointed out, if no compensation is paid while on LOA, it won't affect contributions. It would affect the participant count, but hopefully one more participant doesn't cause it to be a large plan.

Dec 31. Mainly for the reason mentioned to avoid an additional Form 5500 for a 1 day plan year. With a merger as of the end of the day on Dec 31, that still gives a full 12 month (1/1 -12/31) plan year for the smaller plan, so I don't see it jeopardizing safe harbor status.

If the non-key HCE receives a 3% PS and the NHCEs receive a 3% QNEC, it doesn't work. You are required to pass 401(a)(4) for the nonelective contributions both with and without the QNEC. See 1.401(k)-2(a)(6)(ii).

I read 1.416-1 T-32 as saying a rollover to a plan maintained by the same employer is a related rollover. That description also fits rolling back into the same plan. If the alternate payee is under age 59.5, the segregated account is the best choice. That's why I mentioned that a rollover of the QDRO benefit may not be a wise move. Differences in distribution timing can be another reason to leave it in a segregated account until the alternate payee needs the funds.

You might want to take another look at 1.403(b)-5(b)(3)(i). Under it, the plan can require that if you are going to defer, you have to elect to contribute at least $200 /yr. However, electing to defer less than $200 per year is not a category that can be excluded from the plan under 1.403(b)-5(b)(4). They are still participants.

The answer for a given plan will be in the plan document. EGTRRA expanded what can be rolled into a qualified plan, but plans are not required to allow amounts to be rolled in. As long as an IRA is in the person's name (not an inherited IRA), pre-tax IRA amounts can be rolled into a plan as long as the plan allows it. As for rolling a QDRO distribution back into the same plan when the alternate payee is also a participant, it should be allowed if the plan allows rollovers from a qualified plan. It may not be a wise move for the alternate payee to do so unless the alternate payee is over age 59.5 and the plan allows rollovers to be distributed in-service.

I think I had the same agent review a 5310 filing in 2008. In addition to not being able to recognize the amendments included in the original filing, the agent accused us, in writing, of backdating the good faith EGTRRA amendment. I ended my response with a statement that the amendment was timely prepared and timely executed by our client and that I will gladly provide a statement, under penalty of perjury, to that effect. That took care of the matter. Ever get one of those surveys after receiving a determination letter? I got one for that filing. That was the most detailed survey response I've ever done.

The protections you get by filing under VCP ONLY apply to the missed amendments included in the submission. The IRS can still take action against the plan sponsor for any late amendments that are not included in the submission. So, while you are not required to include all late amendments, it is a really good idea to include all of them.

What you are describing sounds like a plan valued annually as of the last day of the plan year. If that is the case, your distribution amount would be your vested account balance as of 12/31/2013. That's how an annually valued plan works. In the old days, almost all plans were valued that way. Daily valuation is the most common now, but there are still some annually valued plans. Do you have a copy of the SPD for the plan? It should say how often the plan is valued. Our SPD's have it in the Plan Investments and Fees section.

I doubt you will find a definitive answer. If you are leaning towards correcting under SCP, Section 6.02(2) of the Rev. Proc. may give you some comfort. Another option is to contact the IRS. The IRS has done phone forums on EPCRS several times. The handout for the 2/21/2013 forum lists contact information for the speakers. http://www.irs.gov/pub/irs-tege/epcrs_changes_phoneforum_presentation.pdf