TPA Bob

MoJo Not certain what "carefully" means. My only concern is if he receives income from life insurance sales that have not been subjected to the "statutory" employee rules and thus earned income (and would have to pay self employment tax) is this income available for a separate plan? One of things that keeps coming up in reading the rules.

I have a life insurance salesman who has a significant part of his revenue paid to him as a statutory employee and is covered by the insurance company's retirement plans. Additionally he has other commissioned income that is not considered statutory income by the payers. In addition he has his own employee that he pays W-2 compensation. He wants to establish a separate retirement plan covering his non statutory income and the employees income. I have not been able to find anything definitive. Would seem for retirement plan purposes he could establish a Plan for his non statutory income and that of his employee. Any thoughts greatly appreciated.

Sorry for opening a can of worms. Two events. When we receive a "draft" of a QDRO to review before it is provided to the court for approval or when someone in ownership or a fiduciary to the Plan is going through a divorce we proceed with extreme caution. Understand everyone's concerns and will be more aware going forward. For the most part we never become aware until the QDRO is received.

In IRS / DOL reviews in the past I have never encountered an issue regarding pursuit of loan collections. Not saying this makes it right.

All interesting responses and based on my review and discussions there is a lot of disagreement. I agree that this could be an issue with plan operation. Our policy in the past has been once the Plan Sponsor becomes aware of a divorce proceeding any unusual transaction needs to be scrutinized and in some cases have required the participant to obtain approval of loans, distributions, etc. I understand that this goes beyond the rules but has avoided issues down the road. Thanks to all.

401(k) Plan. Loans per loan policy repaid through payroll withholding. Participant going through divorce and wants to cease the withholding for loan payments and default. Prior threads (found one from 2008) show no guidance offered and I have not found any guidance. Any thoughts would be welcomed.

Will be a question we will be asking.

Thanks to all. Flyboy - we have not "engaged" by the client as of now although we will be shortly. They are in a squabble with the existing provider that needs to be resolved first. We will quote them a fee to do a no activity return for 2015. We hope that the prior provider did an extension of time to file. Plan will fund a non elective profit sharing contribution for 2016. Thanks again.

Have a new client that established a 401(k) plan in 2015. There were no contributions for 2015 (no idea why)(no deferrals) and to date in October 2016 still no assets. I cannot find guidance on this. Presume that there is a filing requirement for 2015. Any thoughts?

Have a client that wants to add a Automatic Contribution Arrangement (ACA) and not an EACA or QACA. They want to do as soon as possible. Do we have to wait until the beginning of the next plan year to adopt? Or can we amend mid year. Seems clear to me that an EACA and QACA must be at beginning of year but have conflicting view points on ACA. Thanks in advance.

Have a new client that owned 50% of an insurance agency (S Corporation), his brother the other 50%. He was paid as an independent contractor his commissions from insurance sales to a separate LLP (single member LLP tax as a sole proprietor). The agency has a CEO and CFO separate from either brother. Client has been max funding a SEP for as long as he can remember only on his independent contractor income - no other participants. The insurance agency has a separate retirement plan that she (Client) did not participate in. Do not meet the controlled group rules as do not own more that 50%. A-Org - 1st impression is FSO is the insurance agency, A-Org is my client. Since agency is a corporation appears that it would not be a FSO. B-Org - appears likely Having second thoughts on whether related - sure seems that it should. Conversation greatly appreciated.

No doubt it was a mistake - but looks like to me that non deductibility is not considered a mistake in fact on its own.

My problem is that the total overpayment is about $70,000. Would love to charge them that much....... I do not know what I can do other that EPCRS.

Have a new client who has over contributed to their profit sharing plan in 2013. They are now out of business and will not have any compensation (starting in 2014). What can I do about the excess contribution? They cannot use 2013 compensation as after the 12 month period. All guidance refers to using the excess amount in the following years but they will not have any compensation.

Had a participant in one of our plans say their previous employer would not allow the $5,500 catch up contribution to be Roth. So they could do Roth for 17,500 but the additional 5,500 had to be pretax. I have never heard of this as a feature of a plan. Anyone know why this would be a feature of a Plan? Thanks.

Thanks for the replies. I have seen cases where the payroll clerk is signing the payroll tax forms and then is personally liable (potentially) for the payroll tax if not paid by the Company. Just trying to protect the HR person in this case. And trying to say our services point out these potential issues that others may or do not see. You are right, if the RFP says something that is not true it does not make it true. Good point.

QDROPHILE - The HR person was not told he was the Plan Administrator - the RFP from the investment professional names him as such, which I believe is a mistake. I agree that if we told him he was the Plan Administrator and he accepted that would certainly be ok. But without that formal process I would say that the officers of the Plan Sponsor is the deemed "Plan Administrator(s)". The same logic would apply to the signing of the Form 5500 - he should not sign unless he is authorized and has accepted that role. The Controller of a Company maintains the books but rarely would ever sign an income tax return. It is the responsibility of the officers of the Company. My comment was mainly on the RFP - is this a mistake by the investment professional or not a big deal. I lean toward it being a big deal (or at least something I would not want to see in writing). Did not know if others agreed.

We sponsor a corbel volume submitter plan and in the adoption agreement always name the Plan Sponsor as the Plan Administrator. We received an RFP from a Plan where we are the current TPA and they are using their document. In the RFP they have named the person who handle their HR as the Plan Administrator. If I was advising the HR person I would tell him that there is no way I would want any document saying that he is the Plan Administrator. Am I being overly protective or overly sensitive? Any comments appreciated.

I would have in the ratio % all non excludable employees in the denominator and in the numerator the covered employees of the particular company.

Realize this not a cross tested question but seems to be the best place to post. We have been approached by a new Company that was spun off from a larger Company - new ownership and no relationship to prior Company. They want two classes of employees with different eligibilities. For "field employees" they want six months of service with monthly entry dates. For all other employees they want immediate eligibility. For coverage I assume that I have to test each eligibility requirement separately for coverage. But the Plan Sponsor is telling me that since both eligibility definitions would cover otherwise excludible employees all of the employees are aggregated for coverage. I am thinking that each class of employees need to be tested. Any thoughts would be greatly appreciated.

Thanks. I now see the reference to IRR in box 7 code G - In plan Roth Rollover. Long day.

I am unable to find any guidance on how an in-plan roth transfer is reported to the IRS. Anyone have any thoughts? Thanks.

Thanks.

Participant is requesting a hardship distribution to provide enough funds to create 20% equity in the home he is acquiring, presumably to avoid PMI. The safe harbor language says "costs directly related to the purchase of a principal residence."Any comments would be appreciated.

A question has come up regarding service for eligibility. We use the Corbel Volume Submitter 401(k) Plan. Assume eligibility for making deferrals is 90 days and for receiving employer contributions is one year. Person is hired through an employment agency and works for 90 days. On the 91st day the person is hired by the Employer and is no longer employed throught the employment agency. The question (of course) is the first 90 days of service through the employment agency counted towards the 90 days of service. I have always taken the position that it does, but now in reading the document again it appears that a leased employee is only treated as an employee of recepient organization after one year of continuous employment with the employer. As this person only has 90 days, do I exclude this service for eligibility purposes?