BG5150

My thought was that in the Roth bucket (only), if you had basis of $10,000 and earnings of $5,000, a $1,000 RMD would be $333 taxable and $667 non-taxable. I didn't think you would have to co-mingle "regular" k with the Roth.

Are you thinking that if you take Roth you have to prorate it across the taxable and non-taxable portions of the account?

I have a client that has a SIMPLE IRA, and they want to start a 401(k) plan this year. I know that the two are not supposed to coexist in any particular year. However, could I just start the 401(k) plan up and just say the contributions this year to the IRA were ineligible? Return the funds to the employees and pay the excise taxes? (We are only in March. It may be worth it to the owners to do that).

I remember reading somewhere that an owner is not considered an employee--she's simply the owner. So you can include the owner. I have a DC plan where the owner is also in the union. We use his non-Union comp for plan purposes. (I don't remember the cite, b/c it was someone in my office who found it.)

They should be able to take it from whichever source they want. Unless the document proscribes a different method.

Disability should be defined in the plan document.

You do not reclassify as catch-up if you have a failure. You reclassify when you hit a limit.

I agree w/ Lou. I see no problem with this.

Not true. If I feel that I need to save 7% of my income in order to fund my retirement, I may think about lessening my deferral if I knew that the company was giving me 3% at the get-go.

If no HCEs benefit, coverage passes automatically, no?

It's actually tests, plural. As a CPC, you should have a good foundation. There is no study guide like for the ASPPA tests, just a syllabus. I took Derrin Watson's webinar (from Relius) for both tests and they were invaluable. Best thing to do, maybe download the sample tests and see how you do.

Has anyone seen or heard of the IRS coming down on this stuff in an audit?

An ERPA will allow you to talk to the IRS on behalf of your client. Mere PoA doesn't work.

FWIW, I'd do #2.

One thing missing from that is: If the plan is utilizing a SH Match, AND the calculation is per payroll, the match for any particular quarter must be sent to the trust no later than the end of the quarter following. From 1.401(k)-3©(5)(ii)

Example: Terminated Employee's account is worth $10,000, the Trustee sends him a check for $12,000. Example: ADP refund is 600, person is paid 900.

Just curious: what kind of accounts were these? Are they with a big carrier? Individual brokerage accounts? Someone should have notified the custodian that the accounts should receive contributions any more.

If you are worried about '14, switch to current year testing. And you CAN do a QNEC for a prior year test, but you have to wait until 12 months after the PYE to do so, (I'm not sure if bottom-up is allowed in that case, though. Take a look at EPCRS)

You also need to document procedures that will prevent this from happening again.

Does CEEBS have anything?

It's 10e.

Note, it says "exclude ALL Participants." (my emphasis)

Profit Sharing plan's trust is in a pooled account. Balance forward valuation. Plan Sponsor now wants to take plan expenses from the trust. The expenses are justified and eligible to be paid from the assets. What kind of notification (if any) is due to the participants?

It's official! You can all call me the Grand Poohbah of Pension Consulting now. Or, BG. Your choice.

EA?