masteff

Some of their new "helpful" webpages have minor problems like you describe. I went straight to the hardcore way: http://www.irs.gov/pub/irs-prior/ A more normal way is the prior year forms search function: http://apps.irs.gov/app/picklist/list/priorFormPublication.html?value=1099-r&criteria=formNumber Here's the file in question: http://www.irs.gov/pub/irs-prior/i1099r--2013.pdf The irs.gov/pub folder can be interesting to nose around. For example, IRBs are in the irs-irbs subfolder before listed most other places. And the lastest announcements, notices, rev procs and rev rules can be found in the irs-drop subfolder. When I had more compliance duties at a prior job, I used those regularly to keep up on the latest developments (especially right after EGTRRA passed and we had new stuff almost daily).

When you're talking about an annual limit, given the proposed design is a coinsurance, do you mean the cost sharing limit on EHBs as per PPACA section 1302©(1) and 45 CFR 156.130? Or do you mean some other form of annual cap on benefits?

Back of envelope: $100/day x 30 days/month = $3000/month, assuming a 7.65% tax burden, you'd have to be reimbursing ~$40K per individual per month for the employer tax savings to outweigh the penalty (anyone find glaring flaw in my rough calc?) I suspect no one really examines the tax treatment issue since they get stuck at the penalty.

Constructive receipt is well established in numerous reference materials, such as the following IRS Informational Letter. http://www.irs.gov/pub/irs-wd/06-0005.pdf (which was new to me but generally reaffirmed my understanding of constructive receipt) On the 2nd page, first paragraph, the last sentence seems to be modernizing the "mailbox" concept... a "direct deposit" rule, if you please. Regardless of whether the proceeds of the trade settlement were technically in an account owned directly by the plan or in an account owned by a trustee/custodian/service provider of the plan, it was not held somewhere that the participant could have excercised any form of control over them. It's only when a check or other form of disbursement was made that the funds were received by the participant.

The trade settlement is a red herring as the funds are still owned and controlled by the Plan. See ESOP Guy's comments re: constructive receipt. You could make the fact pattern much more interesting if you cut and mailed the check on Dec 31st. Some of the income tax and investment forums have massive arguments about how that one plays out. (Of course, part of the answer is how do you want it to play out... if you were needing to take a minimum distribution then you're not going to argue that it's January income.)

Sorry but what burden to the employer could possibly exist for doing deferrals on every paycheck in the technological age of the 21st Century? If you can manage to withhold payroll taxes correctly then you can withhold a deferral. And only very small employers can remit federal withholding by check, so if you're sophisticated enough to make electronic payroll tax payments, you can handle process a deferral. The problem seems to be the notion that due to monthly commissions, one paycheck is significantly larger than the other. Possibly to the point that some people have little to no net pay on the small check. In which case, the employer needs to establish a heirarchy for deductions. Tax withholding and garnishments should come first, after that it gets a bit subjective. Simply put the most necessary deductions, like medical, in front of the "nice to have" deductions, like vision and 401(k). Unless this is a pure sales company, then you're like to have one or two employees (e.g., the receptionist) who don't receive commissions who are then harmed by not getting the full deferral opportunity. Personally, I would move to separate elections for each 1/2 month (depending on the plan's exact language) rather than skipping a pay period. Assuming they're using software rather than manually calculating payroll, most payroll systems allow you to program which paycheck of the month a deduction is taken from. Some employees could elect zero on the small check while allowing others to still defer. Unless the person doing payroll is incompetent, it would add just a minute or two of extra work to properly enter someone's election change.

See page 9 here: http://www.irs.gov/pub/irs-pdf/p560.pdf Once you pass the grace period, you will have to change to a different type of plan; I presume w/out looking that the best option would be a 401(k).

What about matching 2% of after-tax contributions?

Agree. Just as a 5% owner in the year they turn 70 1/2 does not later become a non-owner, a non-owner in the year they turn 70 1/2 does not later become a 5% owner. It's not an easy search using the board's search function, but google advanced search does manage a number of hits: https://www.google.com/search?as_q=rmd+owner+5&as_qdr=all&as_sitesearch=benefitslink.com%2Fboards&as_occt=any&safe=images&as_rights=#as_qdr=all&q=rmd+owner+5+site:benefitslink.com%2Fboards

The "special enrollment" in 1.125-4(b) is something different than the annual enrollment period. Annual enrollment is in 1.125-2 http://www.gpo.gov/fdsys/pkg/FR-2007-08-06/pdf/E7-14827.pdf and requires the election be irrevocable for the plan year, except as may be permitted under the change in status rules in 1.125-4

This IRS submission kit is invaluable for filing the necessary VCP. We just used it at the non-profit where I'm currently employed. And yes, it has to be filed by 12/31/13 to get the reduced fee. Your 2 most likely delays are 1) the written document and 2) board adoption of the plan. We were able to get a written document from our current investment provider (for the price of committing to a small monthly fee). http://www.irs.gov/pub/irs-tege/vcp_submission_kit_403b.pdf

Reg 1.105-4(g) has the following: "(g) Definitions. The term “personal injury” as used in this section, means an externally caused sudden hurt or damage to the body brought about by an identifiable event. The term “sickness” as used in this section, means mental illnesses and all bodily infirmities and disorders other than “personal injuries”. Diseases, whether resulting from the occupation or otherwise, are not considered personal injuries, but they are treated as a sickness."

Per the regs, a plan loan is not required for a hardship distribution if it would increase the need of the participant. Arguably, being on a medical leave of absence with no pay, the loan would increase the current hardship. Search on the word "counterproductive" here to find the relevant piece: http://www.ecfr.gov/cgi-bin/text-idx?node=26:5.0.1.1.1.0.2.78&rgn=div8 However the plan may be stricter than the regs, so consult your plan document. Also review your plan's loan rules. And as the others have noted, I hope you've now spent time carefully reading the plan's definitions sections for a whole variety of words like: employee, employment, service, participant, leave, and termination. And then carefully read the plan section addressing hardship withdrawals crossreferencing to the plan definitions you just reviewed.

What effect does the common 100% ownership have on the rule about not having a 5305-SEP and another qualified plan in same year? In my experience, individually designed SEP's are not very common, making it likely the OP has a 5305-SEP. So the rule should at least be mentioned as a caveat before a 401(k) gets set up.

refer to EPCRS section 6.02(5)(d) regarding missing participants

If plan admins have a duty to try to locate missing participants, do they not also have a duty to contact possible beneficiaries?

Regardless of the estrangement, has anyone informed the mother (or any other immediate relative) that a benefit exists to be claimed? See my posts above. Some states have an affidavit of small estate. -- My father messed up the designation on an insurance policy so while everything else went directly to trust, the ins co provided my step-mother such an affidavit for her to sign and it allowed us to entirely bypass the probate process.

Pardon my ignorance/curiosity but what type of plan is this that the TPA rather than the employer is the plan sponsor? Is this a multi-employer or union plan that self-administers? Do you have a copy of the most recent 5500? Who is listed on it as the plan sponsor in Part II Line 2a?

I'd have to go back and look for which specific rules kick in on 1/1/14 that create the most concern but I'd be careful about the employer paying for a Medicare supplement because it potenially fails some of the minimum plan design requirements for employer provided coverage.

What's the employer really trying to accomplish? Why not set the minimum 401(k) elective deferral at some percentage, such as 3%? So you either don't defer or you defer at least, say 3%? http://benefitslink.com/boards/index.php?/topic/45344-minimum-deferral/

A Google search on "dependent care fsa volunteer work" finds a number of hits that all say volunteer work does not count. I think they are out of luck on this one.

Extensive prior discussion, note that it's a thread w/ older posts and then got restarted earlier this year: http://benefitslink.com/boards/index.php?/topic/47337-rmd-and-in-service-distribution/

A related question to be aware of is does the plan limit the window for when the high-3 must have occurred? E.g. high-3 out of the last 10 years of employment? This will vary plan by plan.

http://www.eeoc.gov/laws/types/nationalorigin.cfm

Were the amounts received the exact same amount? Did your client work (ie have social security wages) last year? If he worked, he may have received an adjustment, retroactive to January 1st. http://www.ssa.gov/pubs/EN-05-10069.pdf