Pixie

YES! Thank you geniuses.

I have a plan that does the 3% safe harbor and also has the option for discretionary. If we give the staff 3% can we give the highly compensated 9% (the 3% base plus 6% discretionary?). The plan passes Top Heavy due to the 3%, the Gateway test due to the 1/3rd rule and also passes the 401a4. Thank you for your help!

I have a take over plan. Plan is Top Heavy. The owner contributes $6,000 catch up only. No other contributions except one dude put in $300. :) Since the majority of the catch up would be recharacterized to pass the ADP test, I assume this plan does not satisfy top heavy. Do you agree?

I have wealthy participant that has two individual accounts in the 401k plan. He wants to designate a beneficiary for each account instead of using one form and inputting percentages. Is this allowed?

thank you!!!

I have a few force outs to accomplish. Does the initial notice need to be sent by certified mail? Also, regarding lost participants, if we run their name through an internet search, is that enough due diligence? Finally, I have a lost participant with an account of approximately $6,000. We had done a few searches with no luck. What is done in this case? He has been lost for 12 years.

Hi. I have a plan that is terminating. One of the participants had a few stokes and cannot think. He does not have a power of atty. Do we just transfer his account to a default IRA?

I have a client that has self directed brokerage accounts. The accounts have both Roth and Safe Harbor contributions mixed together in each individual account. We track the Roth earnings separately but it is not as precise as it would be if the contributions were in two brokerage accounts. Is this permitted?

My client has a sole prop/corp controlled group. The owner has compensation coming from both entities. She only has employee deferrals from the corp. Can she use comp from the sole prop to calculate the discretionary match to her account?

We have a plan that terminated with a lost participant. The assets for this participant reverted back to the plan sponsor. The participant was found three years later. The plan sponsor will pay them. We will probably outsource the distribution. Is there any necessary plan reporting?

I have a client with several seasonal pilots. The client tracks 'pilot days'. "Their daily wage is based on a 14 hour duty day as that is the maximum number of hours they can be on site. If they work 4 hours and we cancel flights due to weather, they are paid a full days wage. Sometimes, they will be here 8-10 hours and other times 14 hours." What would you use to estimate hours? My client was thinking that 10 hours per pilot day sounds fair but I was wondering if there was some guidance I could follow. Thank you!

Participant takes hardship in September 2013. The employee deferrals are not suspended. What is the best way to self correct? Should we suspend future deferrals or should we return past deferrals as a mistake in fact and then have the client run them through payroll. Or should we return the deferrals and tax them with the 10% early withdrawal. The confusing thing is that we span 2 calendar years. Thank you!

My client has the proper bond in place to cover the beginning of plan year assets and qualifies for the small plan audit waiver. During plan year 2012, they purchase real estate and as of the end of 2012, their bond did not cover 100% of the non-qualifying plan assets. Does the plan still meet the small plan audit waiver for the 2012 plan year due to the fact that the bond correctly covered the assets at the start of the plan year? We are in the process of increasing the bond. Thank you!

I have a 415© failure due to employee deferrals. The employer contributed a $50,000 profit sharing for the participant. So I need to refund the employee deferrals over the catch-up contribution of $5,500 since the participant has attained age 50. My question is, what year is the refund taxed?

My lost participant has been lost for several years. I have looked for him using a service for $50 and used the IRS letter forwarding several times with no luck. His investments are $2,300 and his outstanding loan is $3,400. I have been unable to default the loan because the platform will not allow us to unless his address is known. Penchecks will accept a default IRA rollover with a loan balance, but the total balance is over $5,000. Any ideas on how to proceed?

My client funds employer benefits in a pooled account. 401(k) contributions are deposited to individually directed accounts with quarterly statements. I have been providing an Annual Statement with vesting, and a quarterly notice of multiple statements and PPA quarterly notice. My question is, under PPA, how often am I required to value the pooled account? Currently, I have been valuing it annually.

Thank you. That is helpful. I like the option where everyone agrees to hold tight for now. The loan option is a great idea for down the road if the cash account is running low. Is there anyway that the land could be distributed from the plan into a tax qualified trust or IRA where the owners are the former participants? It would reduce the annual expenses by $10K.

I have a 12 participant profit sharing plan that acquired land as an asset 15 years ago. For the last 7 years, the land has been for sale. The state wanted to purchase the land as part of highway expansion but then backed out a couple of years ago leaving the trustees shocked. They have wanted to terminate the plan for about 7 years as well. The plan also has an investment fund that is used to cover the administrative expense of holding the land until it sells. The investment fund has dropped to 1/2 it's value. The land is appriased for 2 million and there is $200,000 left in the investment account. We have two retirees and a recent death benefit claim. However the trustees need to conserve the investment account to pay for the $16K to $20K it costs to cover all of the ERISA requirements (annual appriasal, 2 million dollar bond, TPA fees) and local taxes. So my question is, how do we legally cover the benefit cliams for our two retired people and our beneficiary without using up all of the cash flow needed to maintain the land until it sells? Worst case scenario is that it takes five more years to sell the land and thus at least $100,000 is needed in cash reserves. Thanks.

I have an owner (HCE) that put in approx $7K in employee deferrals. When his taxes were prepared, the CPA put all of the income on his wife's return and he had negative compensation. The husband and wife own serveral companies. I will return $2k in employee deferrals, but can I allow the $5k for catch up?

My client is selling a piece of land they have held in their 401k pooled account. Does excise tax on the sale apply?

Thank you for the information. I have a new situation with my participant in question. His account transferred from another plan that was merged into the plan he is in now. He says that the old plan allowed in-service withdrawals at age 59 1/2. Do the old in-service withdrawal provisions apply to funds received by the new plan? His balance is huge so I want to be careful with this.

My plan doc does not allow for inservice withdrawals. However, I have a participant that has attained age 65 that wants to take one. Do we have to allow for this?