BG5150

I don't think I ever spoke to anyone else about the vested percentage in my 401(k) or DB plans.

If you amend the plan, you must give an SAR to only the affected participants, right? So, the still-employed people won't need to know of it. And I would construct the amendment with something like: Those participants whose employment ended on [date] shall become 100% vested in all accounts.

I don't think it's a great idea. If the person was gone a few weeks or maybe a month or two, then there might not be a problem. What if someone was gone for a few years? They might not even remember how much they were withholding.

Why can't you exclude bonus for SH if the plan is excluding it for all purposes?

ESPO Guy: the publication cited above says: So, if it is distributed, a 1099 should be generated. BTW, the original cite is slightly incorrect. It is Rev. Rul. 2014-9, not Notice 2014-9. The latter references refunds of Zone Bonds or some such rigamarole.

I think that the withholding is optional to the taxpayer.

The CPA I work with on this said: Because the transactions are considered trades, not investments, and Because they were 1256 contracts, and Because the proceeds were ran through a business entity (an LLC in this case) Because each individual chose mark to market accounting, then: The proceeds are considered earned income, even though they are exempt from SE tax.

Why not just let it be?

Well, how else could the provision fail BRF?

BRF testing would pass, I think, as everyone has the ability to either purchase a home and/or attend college.

^ under the valuation section

I have a plan with a group of "traders" who are partners in a business. Their K-1 show a net employment income of, say, $10,000 (14 A). There is investment income of over $1,000,000. I have read that income could be considered as earned income for plan purposes, even though it is not subject to SE tax. Any thoughts and/or cites? The EOB search doesn't even register a hit with "trader".

Does the sponsor have any legal recourse to force the adopting ER to pay the SH?

And qualification defects affect ALL adopters. Of which this company was one.

Maybe because the thread is in the "401(k) Plans" forum?

My suggestion is that if you want to give out your phone number, do it only via private message given the preponderance of spam we are subject to from time to time...

What about someone who quits or gets fired on 12/31? Do you give her a 1/1 termination date because you can be employed and unemployed on the same day?

Sure you can exclude hourly workers. However, if a decent portion of them work more than 1,000 hours in any year, you will have a coverage problem. Or, you can just exclude a lot, if not all, the HCEs.

If document is silent on the issue, I would say this person was not employed on the last day of the year and thus, is not eligible for a TH contribution. As Belgarath said, the participant might be eligible for a Profit Sharing allocation, though.

And, I would think a Trust Identification Number, b/c any payouts come from the trust, not the company.

Wouldn't unreasonable comp be a PT whether or not it was the owners brother or cousin or his golfing buddy?

ETA, it seems that the allocation was not in terms with the plan doc in that it was based on incorrect compensation.

GB, I think this is more a thinly veiled attempt at promoting paradigm life in the guise of informing people of anything.

What if someone has $100k in the 401(k) Plan but $600,000 with another institution? (And that money could be moved into an account with the RIA) How would you know about it? Shouldn't that person be aware of this newly-available investment option?

They can print the signature pages, sign them, and scan back in.