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client received a notice from the IRS the 12/31/2012 return was filed late and accessed a penalty of $6,175.00 The return was filed late - not sure why. Question, even though the penalty has been accessed, can the plan sponsor still file under the Delinquent Filer Program, or does the letter prevent the use of the program. The Delinquent Filer program is not addressed in the IRS penalty letter. thanks

US company sponsors a plan in New England. The new president of the company is a Swiss Citizen here on a 2 year visa. After reading Treas Reg 301.7701-7 - I get the impression he can not be the sole Trustee of the Plan. Furthermore even if there were two other Trustees ( total of 3) he still could not be Trustee since the us Trustees would not control all of the substantial decisions by the Trustees. Is this correct? Does this rule prevent him from being an authorized signer on the plan? Or as long as there is one other Trustee ( US Citizen) he can be named Trustee and authorized signer. thanks so confused!!

Company A is owned by Joe 59.23% Other Owners 40.77% Company B is owned by Company A 46.5% Joe 31.34% Other Owners 22.16% The other owners all own 5 - 10% and are not related to Joe nor are they participants in the plan. Are they controlled or just multiple employers under one document. I know they do not fall under the parent subsidiary rule, since the "parent" company does not own 80% of company B. Not sure when testing for brother sister how you handle Company A's ownership in company B. thanks Long Monday.... and controlled groups get very confusing late in the day

I am not sure if the client sent a certified letter to the participant. Assume the participant does not return the overpayment. Does the Plan re issue the 1099R showing only the portion eligible to be rolled over as a code G? Then how do they report the overpayment? Isn't the participant subject to an IRS 6% penalty on the excess amount unitl it is removed from his account?

Participant terminated and elected to roll funds to an IRA Rollover - custodian sent the funds to the IRA. During an internal audit of the plan, it was discovered an incorrect date was provided to the platform and the participant was paid 80% instead of 60%. The over payment is approx. $1,800. If the employer sends a letter to the participant requesting he contact the IRA custodian and have the overpayment returned to the plan, is there a problem with "ccing" the IRA Custodian on the letter. The participant has not acknowledged the calls from the Plan Sponsor and he may just discard the letter. But by including the IRA custodian on the letter, maybe the IRA custodian will convince the participant to authorize the return of the overpayment. If the employer does not get the funds back, they will make the Trust whole. thoughts??

Plan allows participants to take a hardship and the participant's deferrals are suspended for 6 months. At the end of the six months, doesn't the employer begin the salary deferral withholding at the amount it was prior to the suspension? The hardship form does not indicate the participant will be required to complete a new election form at the end of the suspension. The employer makes the participant wait until the next entry date following the 6 month suspension and tells the employee to complete a new election form. If deferrals show resume at the end of the 6 months, is there an issue missed deferrals? Thanks

Under the terms of the plan document the Plan Administrator is the Named Fiduciary. The Named Fiduciary wants to establish a Retirement Committee ( made up of management and employees) to have the responsibility for monitoring the investments and plan operations. This would include the hiring and firing of the 3(38) Investment Manager, Recordkeeper and TPA. Can the Named Fiduciary, delegate this responsibility to the Retirement Committee and they and only they are responsible for their decisions and actions?

If a 403(b) plan allows for a matching and non elective contribution, I understand these contributions will make the 403(b) plan an ERISA plan subject to all the rules of compliance testing and form 5500. Question, doesn't the plan document need to name a Trustee for the employer portion of the contribution? I am reviewing a document prepared by TransAmercia - Tax Deferred Annuity Retirement Plan Adoption Agreement, and it contains employers contributions. Thanks

the plan document and form shows the plan as a single employer. The Plan Sponsor is ABC, LLC However, all the employees are in DEF, LLC which is owned 100% by ABC,LLC. Based on my research this is a parent-subsidiary relationship. Doesn't the plan sponsor need to have a participation agreement with DEF, LLC? If yes, and no agreement was signed, isn't there a document issue, causing the client to file under VCP? the plan document states, If the employer is a member of a related employer group ( includes all members of a controlled group) Employees of each related group may participate under the plan provided the related employer executes a Participating Employer Agreement. If a related employer does not execute a Participating Employer Agreement, employees of such related employer are not eligible to participate in the plan Guess I found my answer...... Need to file under VCP to correct?? Do you agree

If the employer limits all accounts to a specific vendor ( Fidelity, Schwab, TR Price etc) does the limitation move the non ERISA 403(b) into an ERISA 403(b) plan? thanks

thanks

Client maintains a QACA Plan. New CEO wants to remove the match from the plan. Do you agree they can stop the QACA match if, 1. 30 day advance notice is given to the plan participants 2. Match contributions continue through effective date of amendment 3. Participants must be given the opportunity to change their deferral election 4. The Plan must satisfy the ADP/ACP test for the entire plan year Thanks

company A is purchasing Company B effective 6/1/2014 Company B's 401(k) Plan is to merge into Company A's 401(k) - however Company A sponsors a Safe Harbor Plan and Company B does not The merger will take place effective 1/1/2015 Question is what do with the deferrals from 6/1 - 12/31/2014 - Company A wants to live the plan as is until the end of 12/31/2014 and then merge the plans 1/1/2015. This will make the transition much easier for all. 1. Is it ok that effective 6/1/2014 the plan is amended to reflect Company A as the sponsor with their EIN and not jeopardize an of the transition rules? 2. Company A wants to amend the plan and state effective 1/1/2014 all participants in the Company B's plan are 100% vested. When the plans are merged there are a number of participants who terminated prior to 1/1/2014 that are partially vested. Any problem with using their non vested portion to offset fees once the forfeiture is triggered. Or do these employees also vest 100% as a result of the amendment. Thanks

correct, tis is the first time and only a couple of months. What boggles the mind, is the platform ( who shall remain anonymous) even gave the client the option to not include those employees who now elect to opt out. Saying that, I realize, you never never, take the word of bundled platform, since most of the time, they have no idea what they are talking about when it comes the administration side of the plan!! Thank You

Employer maintains an auto enrollment plan. Using a bundled platform and it was discovered the participants eligible to join the plan effective 1/1/2014 were not provided the auto enrollment information. Platform's position is this can be self-corrected by using the missed deferral opportunity, making the respective match and lost income. Now for the tricky part, the participants in question all received the auto enrollment information as soon as the error was discovered and the majority of them opted out of the plan. The platform has asked the employer, since the employees have opted out, do they still want to make up the missed contributions for the period January 1 through the date the opt out was execute? Or will the participants who opt out be removed from the missed deferral calculations? My gut feeling is the employer is on the hook for the missed deferrals even though the employees are now opting out. Since they never completed the form or online form stating they wanted to opt out, I do not see how the employer can take the position, "they more than likely would have opted out all along." Change to deferrals/investments etc. are to rescind prior elections, my position would be that going forward the election is to not participate in the plan, however, the election can not be retroactive. Thoughts????

I will begin by saying, I have NEVER worked with a Top Hat Plan, so a little patience please... my client called and stated they had a Top Hat Plan for one employee ( we never new about this) who is currently receiving payment from the plan. the CEO stated they were suppose to file Form 5500 and never did. My research shows, if they filed a simple statement with the DOL within 120 days after the adoption of the plan, disclosing specific information, no 5500 is filed EVER on the Plan. However, if they did not file the notice with the DOL, they are required to file the 5500 each plan year. Is this correct? If in fact they never filed the notice with the DOL, can I use the Delinquent Filer Program to correct the past 5500 filings? Thanks for our help...

Plan Sponsor offers a 401k plan and has J&S and life time options for distribution. Attorney drafted document and I am not sure why this provision was never removed. There is no MP money in the plan. The client wants to eliminate the spousal consent for Hardships and Loans. My thought this is an all or nothing election. If they remove spousal consent for loans and hardships, then they have to remove it for distributions to a terminated participant. do you agree? Also does anyone know where I could get some statistics on DC plans that still require spousal consent ( using J&S) for distributions?? Thanks

I get blamed enough, so I am pushing the client to wait til next year. Thanks for the response - that is a double Amen from me

The employer maintains a 3% Safe Harbor Plan. Currently distributions are issued the plan year following a one (1) year break in service. SInce this is a daily valued plan, the employer wants to change the payout to immediately followign the date of termination. Although this change has no impace on the 3% safe harbor contribution, I do not believe any guidance that would allow this mid year amendment. The employer would need to wait until next year for this change. Amend the document prior to the close of the current year and then effective 1/1/2015 allow for immediate distribution Do you agree?

Client is using one of the major mutual fund houses 401(k) bundled services. Recently the plan added the loan feature to the plan. The platform amended the document and indicated loans are allowed. According to the platform, there is no loan policy. The provisions of the loan are set forth in their service agreement with the plan sponsor. Question: Doesn't the employer need to make the written loan policy available to the plan participants? Since the policy sets forth the criteria for a loan i.e.. minimum, number of loans outstanding, repayment etc., it would seem to me this information needs to be provided to a participant so they can understand the loan procedure. Thanks

Employer has an auto enrollment at 3%. Safe Harbor Match is 100% up to 5%. Just discovered some participants in 2013 were never auto enrolled. Do I calculate the missed deferral as 3% of the wages then the missed deferral opportunity is 50% of the missed deferral this is a QNEC made by the employer the match is 100% up to 5% of comp - so the match would be calculated based on the missed deferral amount. - This is a QNEC made by the employer obviously lost income needs to be calculated. thanks

The employer had a Simple IRA Plan that was terminated.. The participants want to roll the funds into their new 401(k) Plan. Normally a participant is prevented from rolling the funds to the an IRA or Qualified Plan, unless the participant was in the simple plan for 2 years. Does the termination of the plan negate the 2 year period, allowing the participant with less than 2 years to roll to a traditional IRA or Qualified Plan? If not, what happens to the accounts for the participants with less than 2 years? Do they remain under the Simple IRA even though the plan is terminated? Thanks

I have a profit sharing plan that held mortgages as an investment option. When the plan went daily, the mortgage assets were allocated to the participants. Each quarter the income and principal paid is allocated to the participants. For several years this worked perfect. There is currently $800,00+/- in this account. The Trustees have been informed that the majority of the mortgages are defaulted can worth zip!! 1. The Trustees will pursue legal action with the entity holding the mortgages - The Employer wil pay all costs associated with this legal proceedings. Any issue with this? 2. Trying to avoid a participant riot when they find out the account has been over valued in the past and there will be no future payments. Should the Partners, take the HNCEs portion of the mortgage pool? They would need to take funds from their core funds and make the NHCEs whole? 3. There are RMDs that need to be issued - some participants only have a mortgage pool account, so with no income and principle coming in, how can they make the RMDs 4. There are some of these are second mortgages, so the only way of getting money would be to pay off the first mortgage. The Plan Sponsor wants to take some of the core funds for those in the mortgage pool pay off the first mortgage, and then collect. sounds like a &^%*()*#)( mess if you ask me. We will strongly recommend an ERSIA attorney get involved, but I am just looking for some insight on what to do. thanks

Company A's has a safe harbor 401(k) profit sharing plan The plan allows for distribution of account upon the attainment of age 59 1/2 and the safe harbor hardship from all sources of money. Participant age 60 applies for a hardship for medical expenses not covered by insurance. I am told by the TPA that since the plan has an In Service Distribution and Hardship, the participant must first take the distribution as an In Service ( subject to the 20% withholding). I have never heard of this. Thoughts????

Company A maintains a 401(k) Plan on 9/12/2012 Company A purchased Company B - now we have a controlled group. Company B maintains a SIMPLE IRA Since the SIMPLE was not terminated prior to 1/1/2014, it is my understanding the SIMPLE Plan must continue for the entire 2014 Plan Year. Once terminated since the particiapnts have been in the SIMPLE for more than 2 years, they can roll their account balance to the 401(k) Plan. 1. is there an issue that one company has a SIMPLE and one has a 401(k) Plan? 2. Can the employees in Company B stop their SIMPLE IRA contribution, join Company A's 401(k) and defer up to $17,500 ( reduced by the contributions made to the SIMPLE). Then in November of 2014 the Employer will notify employees of Company B the SIMPLE Plan is terminated The goal of the employer is to get everyone under one plan ( the 401(k)) for 2014.. Any suggestions??? Thanks