KTB

I have a client who is taking Stock out of a previous employer's 401(k) plan. The data given to us from the distributing plan was broken down between Prior to 2016 and After 2016 amounts and cost basis data. The sources of money are after tax and company matching. Why would the 2016 before and after be significant? Any ideas?

The boxes after the listing are for where the words actually go. So it really reads "(i) [X] Three (3) month(s) with at least 83 Hours of Service in each month". Both the 3 and 83 are items we typed in for the plan. Does that help?

Updated: Looking in the Sungard Plan Document: Definition of Initial Eligibility Computation Period: The initial Eligibility Computation Period is the Employee's Anniversary Year which begins on the Employee's Employment Commencement Date. Definition of Subsequent Eligibility Computation Period: A Subsequent Eligibility Computation Period is any Eligibility Computation Period after the initial Eligibility Computation Period, as the employer elects in its Adoption Agreement. Subsequent in this case in the adoption agreement reads "Plan Year - The Plan Year Beginning with the Plan Year which includes the first anniversary of the Employee's Employment Commencement Date" Adoption AGreement option chosen is: (i) [X] Three (3) month(s) with at least 83 Hours of [ ] OR [X] [ ] [ ] [ ] Service in each month (not exceeding 12 months for Elective Deferrals, Safe Harbor Contributions and SIMPLE Contributions and not exceeding 24 months for other contributions). If more than 12 months, 100% vesting is required. If the Employee does not complete the designated Hours of Service each month during the specified monthly time period, the Employee is subject to the one Year of Service (or two Years of Service if elect more than 12 months) requirement as defined in Election 16. The months during which the Employee completes the specified Hours of Service (Choose one of (1) or (2).): (1) [X] Consecutive. Must be consecutive. So - Belgarath: Are you saying it is #1 or #2 below? 1) 1st time period to become eligible is in the first anniversary year. If fail to meet the 3 months of 83 hours, then it reverts to the subsequent period, or Plan Year (in this case calendar year). 2) 1st time period to become eligible if the first 3 months. If fail to meet the 3 months of 83 hours, then they revert to the 1,000 hours in first anniversary year (and don't get a chance to work another 3 consecutive months of 83 before 1st anniversary year is up)?

Yah, I might have to. I did just pull out the plan document and it says the first initial eligiblity computation period is the anniversary year of the employee. So, in the above example, I guess they would have the entire first year to work 3 consecutive months of 83 hours each and then enter the next month. Otherwise, if that first year goes by and they don't, then it reverts to the way the adoption agreement is setup (plan year) in which they would have to work 1,000 hours in a year and enter the next month. Does that sound better to anyone?!

Using a Pro-Type NonStandardized Document by Sungard

Well, that is what the 'initial eligibility period' would be. Whatever the initial eligibility requirements are, correct? So it would be the first three months? I don't know exactly, so thinking about loud. That is why I need some clarification..

Making sure I can wrap my head around early eligibility. If calendar year plan is setup for 83 hours a month in first three months, consecutive months, enter monthly - with 1 year and 1,000 hours (plan year) as subsequent - if someone is hired 5/8/17 and doesn't work 83 hours each month by 8/7/17, then they have to work 1,000 in plan year 2017 to enter 1/1/18. If not, they have plan year 2018 to get 1,000 hours and enter 1/1/19, correct? Or am I missing something?

Client has UBTI of a negative (loss) amount within his self directed brokerage account within the 401(k). He wants to claim that for potential tax deductions on the loss in future years so we are needing to complete a 990T. I am not a tax accountant so this form is way over my head. Anyone ever had to complete one and know what sections to complete? I have been reading over the instructions from the IRS form and am still lost!

I have a short plan year, initial year, being 5/1/2015 - 9/30/2015 and then the first full year being 10/1/2015 - 9/30/2016. Initial short year, being in 2015, would use a 2015 form 5500? But, the first full plan year would also be in 2015 and use a 2015 plan year form. Is this possible or should I use a 2014 plan year form for my first short plan year?

Participant is the owner of the business and isn't taking any actual wages for the year, so that is how that is working out. Thanks for the insight!

I have a participant whose only W2 wages for 2016 are going to be auto reimbursements but wants to defer into the 401(k) Plan. Since no 'paycheck' is actually issued or going to be issued, any idea how the logistics of deferring into the plan would work?

Hey Tom - I am pretty sure my dog at that specific page Thank you very much!!!

Anyone have good references for how to handle a participant who the employer paid too much Match to due to the participant reaching the compensation limit? The participant was paid $360 too much in employer match. I am seeing a ton of information on excess deferrals but nothing too specific on excess employer match. I saw the option to 'forfeit' but nothing to back up that correction. Thank you!!

Thank you for all of your comments! I agree with the amount being so small, the time and effort of recovering would exceed that. I appreciate the EPCRS siting.

Does anyone have any insight on paying too much out to an employee as far as the employer match goes? For instance, when we verified hours of service with a company that we just took over, we were informed of 5 years of service with over 1000 hours, indicating in this plan that the employee would be 80% vested. However, when needing to dig down for actual hours during an audit, we were informed that the employee should have only had 4 years of service, indicating 60% vested. The dollar amount difference is only $50 between the 80% and 60%. I could see an issue if it was the other way around where the participant got shorted. But in this case, the employer paid out too much so it really only affects the employer, not the participant. Does anyone have any thoughts or documentation on how 'severe' this over-vesting payout really is?