Stash026

That was my thought. Thanks!

Good morning everyone! I just took over a client that hasn't made their required Profit Sharing Contributions (it's used in conjunction to a Cash Balance Plan). It turns out the client hasn't made their Profit Sharing Contributions since 2017, and there are also receivables from prior to that. The client didn't take the deduction on their tax returns, if that matters. Has anyone had this experience and how have you handled the lost interest since these contributions are clearly late? Thanks everyone!

Good morning everyone! I just wanted to confirm what people use for the definition of compensation for plans. Generally we use W-2 compensation, but we have a case (about 35-40 participants) where the owner is being taken off W-2 and instead will simply be paid by a draw whenever the company profits allow it. Obviously he still wants to remain a part of the plan. Thanks in advance!

Maybe off-set is the wrong term. It's a combo Profit Sharing Plan & Cash Balance Plan, so both being tested together

Are the 401(k) contributions excluded from the testing? I got a file from another TPA on a different client that includes EBAR for the Deferrals, Profit Sharing and Cash Balance contributions in the rate group testing for the off-set plan. Is that not accurate?

Just needed to confirm something for testing purposes. Owner has a son that makes $50k and contributes the max into the 401(k). It's currently a Safe Harbor Plan, so there's no testing issues (they also make an additional Profit Sharing) They are considering adding a Cash Balance Plan to further maximize the contributions for the owner. If I were to exclude the owner's children from the Cash Balance, do I still have to include them into the testing for the offset? (obviously the son's EBAR is astronomical, since he's only in his 30s, so including him makes passing the test impossible). If he's excluded from the Cash Balance, he can also still get the same Profit Sharing he would've gotten, correct? Thanks in advance!

I was debating this with someone, so I just wanted to get some clarity. Company of 10 EE with 4 who were "highly": 1) Owner, 2) Owner's spouse (despite only making $50k) 3 & 4) Regular employees. If we were going to determine HCE with the Top 20% (meaning 2 HCE) who would be considered? Would it just be the owner and his spouse due to attribution? Or would it be the owner, the highest paid non-owner and the spouse? Thanks in advance!

That's what I was thinking. We are just being introduced to the client, so I'm not entirely sure what the thinking is

We have a client who currently sponsors a 401(k) plan but would like to convert it into a 403(b). Is that something that can be done through a simple restatement of the Plan Document? Or would we need to terminate the 401(k) and start a brand new 403(b)? Thanks in advance!

Thanks! Did you mark it as taxable also, with no withholding?

I know the IRS has said that we could use either "1" or "2" for Box 7. Just curious what the majority of people have been doing? Also, I assume we mark the entire distribution as taxable? Thanks!

pmacduff. perfect! Thanks!!!!

Good morning all! It's been awhile since I completed a 1099-R for a beneficiary, so I just wanted to confirm. We use the name/SSN for the beneficiary and if they rolled it over it goes as a G, correct? Or do I use Code 4? Thanks in advance!

So if they are paying a PBGC Premium they are allowed to go over the 6% into the DC Plan and still deduct it? If they aren't paying into the DC Plan they can't? I just want to make sure that I'm completely clear on this. Thanks in advance!

So if they are exempt the deduction limit does not apply and they could max out on both plans without an issue?

I have a Plan that's just a husband & wife and they want to move to a Cash Balance/Profit Sharing combination. For contribution deductibility, do we have to integrate the Plans (meaning if the Cash Balance is more than 25% of the eligible compensation, you are limited to 6% in the Profit Sharing)? Or can the plans not be integrated, allowing the full $57k in the Profit Sharing as well as the contribution in the Cash Balance? Thanks everyone!

I had been told a long time ago that we needed to get an EIN# specific to the plan and not use the employers on the Form 5500. Is this no longer the case? One of our clients got a notice and it would appear that we should be using the employer's EIN# to file the Form 5500. Sorry if it's a silly questions, just wanted to confirm. Thanks in advance!

Does anyone have a summary of what changes are being made to documents for the upcoming required restatement? I was searching but couldn't seem to find one. Thanks!

That's what I thought, thanks!!

I know the Secure Act changed the notification requirements, etc but wasn't sure the impact on this. Have a case that wants to change from a 3% Safe Harbor to a Basic Safe Harbor Match as of 1/1/21. Is there a deadline for the amendment to be signed/notice to be given to the employees?

Is there a safe harbor for plans with over 100 participants then? We have an employer that was definitely delinquent in their submission and are going to collect interest. When would you calculate the interest from then?

I know for Plans with less than 100 people, the DOL requires contributions to be deposited within 7 business days of being withheld from payroll. I have a multiple employer plan with more than 100 participants, though no single employer has more than 100 employees in the Plan. So the question is: Does the employer need to make the contributions within 7 business days? Or, since the Plan as a whole over 100 participants does it fall under the 15th business day of the month following the month in which the amount was received by the employer (so if something was withheld on October 31, I guess that means it's due 11/15?) Thanks everyone!

Is there a rule that the change to 3% Safe Harbor has to be by October 1 for "new" plans but December 1 for existing plans? If that's the case, what's the definition of a "new" plan? If we have a document for a Plan Year starting 1/1/20, when do they have to make the 3% decision by? Thanks everyone

Did the CARES Act change the requirements/ability to make changes to your Safe Harbor Plan? A client asked me this, thinking a change could make up to December 1. I don't seem to see it in the regulations, but just wanted to clarify. Thanks!

I have a few clients who signed Profit Sharing documents for 2019, but due to COVID opted not to make their contributions and instead plan to start in 2020. Since there were no contributions in '19 and the assets are $0, is it necessary to file a Form 5500 with $0 assets? Thanks!