Bird

It's more than just the SAR. PPA '06 requires a list of assets. Widely ignored, and the DOL did not provide samples as they were required to do under the act, but it's there (Section 508).

If the same account is fixed by retitling it, I'd be less worried than if it was fixed by transferring from a wrongly titled account to a properly titled one. I'm not sure I'd be that worried about the latter anyway; I guess it depends on just how ambiguous or not it was, when it was fixed, how the financial institution had it coded in their system, etc. In any event, I'm not sure there's much to do other than fix it, give a warning, and move on...

The question might go away if he it is explained to him that he'd have to pay tax on the gains just the same as if they were sold. I suppose the motivation might be to save transaction fees but those fees should be minimal.

On what basis? Withholding was mandatory, and nothing about that would change with a rollover back in.

What is the status of the contribution (trial or completed)? Employer tax return filed or not? If it's a trial, and everyone is in their own group, just give the young HCE the base % with no integration, or figure out what little extra would pass. I might want to know why the allocation is being done that way before opining on other angles. If it's completed, I'd say there's definitely a problem,;the fix might be easy or hard depending on whether accounts are self-directed or not.

Before you go too crazy with the mid-year stuff, find out what the client wants to do. It's common - almost the rule in what I've seen - for the client to be happy, or at least content, with keeping the plan open through the end of the year and making contributions for the whole year as required/desired. Obviously (?) any employees will have reduced pay if they are term'd, and he might have receivables coming in that make a final year contribution attractive.

It's a little hard to follow but here are some thoughts - I don't believe EPCRS can fix a deduction issue. It sounds like the return is wrong if they used $41K as cash basis contributions but it included deferrals. It appears that the over-deduction is $30K ($41K deducted minus $11K deposited.) The safe harbor status is fine as long as the remaining deposit is made by 12/31. There is a known problem with allowing SH contributions by 12/31, but Annual Additions counting towards the current year if made after the 30 day window. I think making the SH contribution is more important and would make it regardless of the apparent 415 violation in 2019. I think you need to talk to the client and accountant and reach a joint decision on what to do for the un-made PS contributions. My guess is that nobody wants to re-file and claim extra income, so the path of least resistance is probably to re-do the contributions to match the $41K deduction...and cross your fingers. Make it clear that it is their decision.

That's a little extreme, no? I think it is sufficient to "install procedures" to make sure it doesn't happen again. If we were to take everyone off of any plan responsibility every time they failed to do something, there wouldn't be anyone left. That's a really good point. I agree that it would look bad if the new funds underperformed the old, but short term performance shouldn't be the criteria for determining whether a decision was good or bad. (And yet, that's what drives a lot of what passes for "expert" analysis.)

I agree with justanotheradmin. You're overthinking it. Late payments can be made up within the cure period, with or without the new Rev Proc.

I agree there is generally no point in a small market plan. Trying to avoid or take on liability just sends you in circles. I did (do) have a plan where the owners did bad stuff and are prohibited from being trustees so there is a directed trustee.

Which is accurate?

Well this didn't get much attention. If anyone was wondering, the broker comp is buried in a different report in a different part of the website.

So you'd have to have 3 forms - one for those who want both benes the same, one for the retirement plan and one for the policy if they want to name different benes. That sounds like more complexity to me, and as noted above, explaining the conditions and requirements just makes it worse.

I don't think so.

If she itemizes deductions, getting the RMD and then writing a check for $10,000 to the charity will likely have the same net effect as giving it to the charity directly. (I think there might also be possible AMT issues.) Not knowing the answer to that question means you are wasting your time.

Remedying what problem? Did the employer adopt the plan in 2016?

If the match is in fact discretionary as a percentage of contributions, I don't see where compensation comes in.

It looks to me like the 5 years is a safe harbor (e.g. if there are HCEs involved) and would not apply if there are only NHCEs, do you agree?

I think so. Depends on exactly what they want to do. If someone had his own business for 10 years and worked as an IC for this company for 2, do they want to credit 10 or 2? I might do language along the lines of "...service while operating as independent contractor John Doe performing services for XYZ Co. shall be recognized." Shouldn't be if they are NHCEs. Could be if they are HCEs (but could they be HCEs without prior year comp history and no ownership...?).

It's not so much that the 401(k) has a problem; the SIMPLE is invalidated when you start a 401(k) in the same year. So, you had a SIMPLE for an ineligible employer, and the fix is simply to stop contributions. Nothing apparently is wrong with the SIMPLE contributions made to date. Then, you start a 401(k) and the SIMPLE contributions are invalidated. I've heard is suggested that the SIMPLE contributions would now be considered regular IRA contributions, subject to regular IRA deductibility rules. Whether all that is worth it is the question; I'd generally lean towards keeping things "simple" but others might feel differently. I think if you search the boards you'll find prior discussions.

Thanks for the reminder about this - I think I learned it here on the board a few years ago, and promptly forgot. The instructions to the forms have not caught up.

You could take the position that it was effectively terminated (but I agree...just do it right) I was thinking about that and it could be a big deal, e.g. if they went from annuity options requiring spousal consent (as would be required) to lump sum only. Yes, you'd need successor plan language in there I think...or are there just rules and you have to be sure to follow them? Haven't done one in ages.

It's not how I would do it but it might not be "wrong." As long as everything that would otherwise happen in a termination took place (I'm not sure exactly what that would entail for a one-man/non PBGC plan, but I think it's a plus that he signed a form electing to leave the money). We've restated MP plans into PS plans and were careful to give a 204(h) notice about cessation of benefit accruals, and retained benefit forms.

We don't do a lot of large plans so sorry if this is something we should know. But here's the situation: We've handled a MassMutual plan for quite a few years. Their fee and compensation report used to include an item for Indirect Compensation paid to the broker/dealer firm, so we would include them on the list of those receiving eligible indirect compensation. Somewhere along the line, they started to report fees paid to themselves as direct comp, and stopped showing the indirect comp paid to the B/D. We kind of shrugged our shoulders and didn't include the B/D at all on the Schedule C. So now I'm wondering if that is correct (if B/D comp isn't indirect comp I don't know what is). I have exchanged emails with our service rep and she punted to their compliance department, which means we may or may not get a response, and it may or may not be adequate. Anyone else completing things differently, or otherwise have comments?

Thanks ERISAGirl for clarifying. I was wondering about that comment. Our vendor, FTW, has offered an "Answers Only" adoption agreement which seems to be what is being described here. I kind of get the hesitation about not seeing the full adoption agreement but we've been using the answers only version quite happily for the past...4 (?) years quite happily. I don't miss the full answers and/but can easily pull up a full answer version easily and do from time to time.