Bird

Suzanne Wynn/Erisafile does webinars; you can buy a package very inexpensively.

As long as it is clearly described, I don't see a problem. Could use one form or two forms.

Oh I see. Good language to have to clarify what happens if someone changes job classification. But if someone doesn't (change), then...? It's certainly not a typical condition such as hours worked or employment status. I guess I would say that I wouldn't tell the client "it's fine." I wouldn't tell them they couldn't either. I think I'd explain it as best I could and point out the risks and let them decide. But I think I would recommend against it...

This thread right here on BL has the IRS regs; below. I think the last sentence in (b) says you can exclude accrued contributions. I'm actually having a hard time grasping the first sentence in (b); I think it means "...allocated to the account balance as of dates in the valuation calendar year [but deposited] after the valuation date." Anyway, I think the regs say you include them, but are permitted to exclude them. (I just explained to a participant a couple of days ago that "they are included." Not untrue...) § 1.401(a)(9)-5 Required minimum distributions from defined contribution plans. Q–3. What is the amount of the account of an employee used for determining the employee's required minimum distribution in the case of an individual account? A–3. (a) In the case of an individual account, the benefit used in determining the required minimum distribution for a distribution calendar year is the account balance as of the last valuation date in the calendar year immediately preceding that distribution calendar year (valuation calendar year) adjusted in accordance with paragraphs (b) and © of this A–3. (b) The account balance is increased by the amount of any contributions or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date. For this purpose, contributions that are allocated to the account balance as of dates in the valuation calendar year after the valuation date, but that are not actually made during the valuation calendar year, are permitted to be excluded.

I'm not sure what that means. Does the plan say someone determines which group you are in, on the last day of the year? If so, then I don't think anyone has accrued a benefit until their group has been determined. (But I could see an agent jumping on the "no last day" language and challenging it.)

Thanks for the feedback/sorry to question you. I've run into stuff like that too, and wondered how much the outside advisor/counsel was getting paid to be flat-out wrong.

Pretty much what Tom said - you can effectively do what they want by just having everyone in their own group and general testing it. It might seem silly that that is definitely determinable (it's not, by my definition, but the IRS says it is so it is), but IMO having multiple formulas available and choosing one for the year is not definitely determinable...or if it is, then it is not a safe harbor and allocations must be general tested. If I may...how do sponsors come up with these weird ideas? I think someone (mis)planted an idea and it grew like a weed that must be plucked out. In my (small plan) world, they know less than nothing; I get a general idea of what they want to do, and I tell them how we're going to do it. We do not have these conversations...

Allowed. We do it sometimes for 401k money only...makes we wonder a bit if that isn't what they meant but didn't quite understand the sources.

I'm going to be somewhat picky about terminology. "Cross tested" to me implies converting contributions to projected benefits and testing those benefits. You're not doing that if the HCEs are younger than the NHCEs. You're really talking about "general testing" where you are not using a safe harbor formula that is deemed to be nondiscriminatory, but you are testing the actual contributions after they are determined by some other formula. (e.g. "Bob gets 6% and Sally gets 3%.") More specifically, you are talking about contributions-based general testing, where you are directly trying to prove the contributions are not discriminatory (as opposed to the projected benefits). You do get to impute permitted disparity, but you don't get to do it depending on whether someone is an HCE or NHCE. So when you do it for everyone, and they are all below the SSWB, yes you are (in certain ranges) going to double the contributions for testing purposes...but it's not going to help since you are doing it for everyone, HCEs and NHCEs. You're stuck with a pro-rata allocation...unless someone knows something I don't.

This is a variation on a common theme - ADP testing failure ($7900), but participant already rolled over the money. In this case, he terminated and rolled over in 2014. They just did the ADP testing and issued a 2014 1099-R with code 8 (it was actually an amended 1099-R b/c he already got one for a 2014 refund of 2013 excess, plus the rollover; two separate ones of course). If it were a plan, we'd say "too late" and he'd have to pay tax on the excess but leave the money in the plan and pay tax on it when it comes out. Since it's an IRA, I was (originally) thinking he had to (but now think he can) leave it in, but could call 6500 of it a non-deductible contribution for 2014, pay a 6% penalty tax on the other 1400, and call that a nondeductible contribution for 2015 and be done with it (except for the hassle of having nondeductible contributions). Is that an option? I'm also thinking that it's not really too late to take it out if he wants - he "just" has to pay the 6% tax for 2014 on the entire amount, then can take it out in 2015. Is that also an option?

My renewal says the Annual CE Cycle is January through December. I think the confusion is that the application stuff is due June 30...and the issue date is 10/1...at least on mine. So here is the info from my latest renewal; make of it what you will: applied online 4/1 (something tells me April 1 is the earliest you can apply to renew) my renewal letter was dated 5/20/15, and the card itself says the issue date is 10/1/15 with an expiration date of 9/30/15.

Peter, will you be telling us why you asked the question, since you probably knew the answer...?

Nothing. 404a-5 is about telling participants what they are paying (covered in the fund expenses). 408b-2 is about telling fiduciaries what others are earning.

Let's be accurate - of course new participants can enroll and have deferrals withheld, they just can't be deposited right away. There are a couple of approaches: As noted by Lou S, you might (probably) have a reasonable administrative delay and can simply withhold and make the deposits later than they really should be. I'm not sure about the rules on that. Worst case is you add 10 cents of interest or whatever and move on. You might decide to not withhold and use the new "oops" self correction that lets you just tell them you didn't withhold and that they can make it up later. It might be too late in the year for that though, I can't say I'm looking at or that familiar with those rules.

Fort William is great. Excellent system and fair pricing.

Agreed. The way I would put it is that it is a PLAN limit, where we can't use comp in excess of the limit in doing calculations. Withholding is not a PLAN function, it is a payroll function.

In my opinion it is not real estate. We report that as "...assets whose current value was neither readily available..." and file a 5500 with Schedule I.

uh-oh. Good thinking. Just be prepared for that TPA to find a bunch of stuff that was done wrong.

In my world they are. For DC plans, I have seen life insurance premiums reported as expenses and the CSV effectively ignored thereafter, but don't believe it is correct and have satisfied myself with that opinion by going over the 5500 instructions pretty carefully...don't remember the details and not inclined to look it up. I think there is some confusion about it because if you irrevocably transfer a liability to an insurance company, e.g., by purchasing an annuity contract to pay a lifetime income, then it is effectively a benefit payment and then no longer a plan asset, which makes sense. That's somewhere in the 5500 instructions. In my world, anything that can be converted to an(other) investment is an asset of the plan. So insurance cash values and annuity surrender values are assets. It means you have a large loss in the first year or two of an insurance contract, but so be it.

For what purposes did the prior TPA "show" it as life insurance? On an account balance statement, balance sheet...? Is there an individual who purchased this, effectively as a self-directed asset? It would be unusual to do that for an annuity. I wouldn't take Schedule A info to mean anything as far as identifying the type of contract. I'd ask the participant and/or agent to clarify.

I'd have an informal conversation with the parties and suggest that the segregation occur as of 12/31, the date of the regular val. If someone is insistent upon another date during this year*, then explain that there are fees associated with a special val and they can be charged to the parties (accounts) who request or otherwise need it. *And the only reason for that is to get paid this year, otherwise the gains and losses will pretty much collapse back to the same amount whether done twice or once.

Belgerath, I'm not sure what your take is on this. I see it saying the RMD must be satisfied but not before the transfer.

I saw that blurb but can't say I looked at it the form all (what if it is self-prepared?) since we always use the SF/1 man filing option. I suppose it is "interesting..."

I'd say he should be able to do a rollover and the RMD at a later date. The investment company might have its own set of "rules" that say the first money out has to be an RMD but I don't see it as a legal requirement and he should be able to tell them to just do it.

You mean with personal money? Of course not. (Unless the plan allows for after-tax contributions, which of course it does not, and would raise other issues...) I'm not sure how to fix it. I suppose I would look at it as if the individual has been lending money to the plan, which has its own set of problems. The first thing you do is figure out who paying to fix the mess and get some money up front.