Beltane

The notice is due by November 1st - is there a limit to how early it can be distributed? Thanks in advance!

Employer has maintained a traditional 401(k) plan for years but, due to downsizing, would like to terminate the 401(k) by resolution before 12/31/17 and, sometime in 2018, establish a SIMPLE IRA plan. [My understanding is contributions to a SIMPLE IRA cannot be made in the same calendar year as any 401(k) contributions and a SIMPLE IRA is not considered a 'successor plan'] My questions are: 1) Would all balances have to be distributed by 12/31/2017 to accomplish this? a) If the 401(k) trust accounts are not zeroed out until early in 2018, does this mean they would have to wait until 2019 to establish a SIMPLE IRA plan? b) if all distributions are made by 12/31/17 [final 5500 would then be for 2017], would the effective date of the SIMPLE then have to be no less than 60 days after the SIMPLE IRA notice is disseminated? My belief is, so long as no contributions to the 401(k) plan are made in 2018 then they may establish a SIMPLE IRA arrangement and commence contributions after a 60 day notice period. IRC 408(p)(2)(D) also mentions 'or benefits were accrued', but I believe this is in reference to DB plan accruals. Thanks to any responses.

Any document language restrictions which may govern its applicability? Depends on the provider I suppose - or is this another option to use in testing?

401(k) plan excludes bonuses from the definition of compensation for deferral purposes. Employer is considering adding a safe harbor match formula dollar for dollar up to 4% computed each semi monthly payroll period, and to make the matching contribution at the same time as deferrals are posted. In this case, is the definition of compensation for computing the safe harbor match the same as the definition for deferrals? I assume it would be, otherwise your matching contribution amounts would be greater than your deferral amounts for some employees. If this is true, the match would be less expensive than the 3% across the board non elective safe harbor type of contribution, since I assume that formula cannot exclude the bonuses. Assume both definitions of compensation meet 414(s).

Can't understand why a client wouldn't appreciate the better safe than sorry approach.

That's my question - don't want to cause confusion.

Maybe some do this as a practice - file 5558's as insurance, even if return may be posted on time. Thinking it may be a wise thing to do in case there are system problems, etc.

See 408(p)(5)(A)(I) - pretty sure its 30 days after year end.

Exactly Tom...it appears a one participant plan of a controlled group can file a 5500-EZ - in this case you still would insert the controlled group code in Section IV, question 9a. The benefit of doing this is the data is not made public, whereas a 5500-EZ would be published on the net. Strange difference. Thanks for confirming my recollection of the historical instructions.

What if we have a one participant plan that has a controlled group? For instance, owns an S corp and has self employed income and both sponsor the plan - Is this still a 'one participant plan'? Can you still file an EZ or must you file a 5500-SF? Or doesn't the controlled group existence matter?

5500-SF was filed for 2011, extension exists for 2012 calendar plan year - owner the only participant at beginning and end of 2012 - can a paper 5500-EZ now be filed for 2012? Will EBSA send a form letter asking for the 2012 SF return? Assets over $ 250,000.

Have a profit sharing plan, small number of participants, who participate in a pooled arrangement. The investment pool is managed by an RIA who went to cash for most of December, 2012 and didn't reinvest the funds until about January 15, 2013. Looking for confirmation on this, this being question 4i on the Schedule I regarding 'Did the plan at any time hold 20% or more of its assets in any single security..(etc)' should be answered Yes for the 2012 return AND the 2013 return. Everyone agree? If so, would it behoove us to attach an explanation? Thanks in advance.

In October of 2012 the IRS announced the definition of an HCE for 2013 remains unchanged at $ 115,000. So this implies the prior compensation limit for 2012 was also $ 115,000. And the amount for 2011, announced in Oct of 2010 I presume, was for 2011 $ 110,000. Fine... Now...as we sit here doing our 2012 plan year testing....our lookback year is 2011....so, ( I'm speaking in general here, ignore the top 20% issues, etc...) , anyone who had gross compensation over $ 110,000 in 2011 is in the HCE group when we test for 2012...Correct? Even if their compensation was much less than that in 2012....Correct? And, let's say hypothetically the IRS in October of 2013 raises this definition to $ 120,000....A year from now, when we're doing 2013 testing anyone with gross comp above $ 115,000 in 2012 will be an HCE in our 2013 testing....so we won't use the $ 120,000 level until 2015...when we're testing 2014 plan years. Confirmation and/or corrections would be really appreciated. I just don't like assuming everybody knows this when it's so easy to make this a systematic error. thanks.

Employer wants to amend a 401(k)/PS plan to allow for in-service withdrawals of profit sharing balances at age 50. However, the demographics would only allow 3 people to take advantage of this, 2 of which are HCE's...the remaining NHCE's would not have access to this benefit and the provision would fail the general non discrimination test (70%). The HCEs are ages 53 and 52, the NHCE over 50 is age 58. Seems it would be better to amend the definition of Normal Retirement Age to age 55 and allow these withdrawals upon attaining NRA - the 58 year old NHCE is really the one who needs the non hardship withdrawal. Comments anyone?

Our fees just went up! (didn't think so, thanks.)