PensionPro

Don't think earnings can be considered annual additions even if the employer is contributing it. the term “annual addition” means the sum for any year of— (A) employer contributions, (B) the employee contributions, and © forfeitures. 415(c )(2)

In that case you could receive up to $51,000 from each employer for 2013. However, the 401(k) deferral and catchup limits of $17,500 and $5,500 respectively are individual limits. Edited to correct typo on catch-up amount per post # 6. Thanks BG5150!

Are the employers unrelated or related under the controlled group rules?

using the search function may reveal more responses ... http://benefitslink.com/boards/index.php?/topic/47446-timing-of-deferral-on-k-1-income/

When we do a 11-g amendment it has language something like this: 'the participant's vesting percentage for these contributions will be the higher of the vesting percentage under the plan's applicable vesting schedule or 20%".

The best that I can tell only limited tax relief is available under EPCRS mostly for excise taxes and the 10% tax under 72(t) under certain circumstances. I am not sure the plan is looking for tax relief in this case. If it is not a qualification issue, then those issues would need to be resolved outside the EPCRS framework IMO. Your original post asked for reports of firsthand experience so maybe someone else can chime in. General Rule. Except as provided in this revenue procedure, the correction programs are not available for events for which the Code provides tax consequences other than plan disqualification (such as the imposition of an excise tax or additional income tax). Sec. 6.09

Any possibility this would be an operational failure?

What is the point of proposing a correction if you are uncertain that you are able to implement it?

I am not aware of specific guidance. You may want to check the order/agreement and the plan document for guidance. I would treat this as 2011 plan compensation and make contributions as if the compensation was received in 2011 - deferrals, match, ps, gateway, etc. I would exclude this from 2013 plan compensation. It should not necessitate retesting. There may be other opinions out there as always. Or maybe someone is aware of in/formal guidance.

Thanks for your helpful responses. I will check it out.

There was a previous discussion along these lines ... http://benefitslink.com/boards/index.php?/topic/13472-salary-reduced-due-to-top-heavy-payment/

For income tax purposes, the IRS treats all back pay as wages in the year paid., i.e. 2013 W-2. Statutory back pay is included in section 415 compensation for the limitation year to which the back pay relates. See Treas. Reg. §1.415©-2(g)(8).

Based on the following excerpt I believe the plan is eligible for EPCRS. The term “Under Examination” means: ... (b) a Plan Sponsor that is under an Exempt Organizations examination (that is, an examination of a Form 990 series or other Exempt Organizations examination); ...

There is more than one view on handling W-2 and earned income in same year. Some net it and some don't.

You are correct, they do also have a 457(b) plan. I am not familiar with the state-level filing requirement. What would be a good place to obtain additional information on that subject? Thank you!

Excess Contributions are the deferral amounts of HCEs that are treated as causing the failure of the ADP test. Clearly match in excess of the formula does not fall under this description.

Per EOB, "the employer for IRC §404 purposes is the partnership, not the individual partner, so an extension on the individual partner's federal tax return has no effect on the deadline for making deductible contributions for the taxable year of the partnership, even for contributions made on the partner's behalf." However, there is no citation provided and 404(a)(6) makes reference to "taxpayer" not "employer." Hmmm ... Edited to Add: Rev. Ruling 81-114 makes reference to "the time prescribed for filing the employer’s income tax return" so the intent was to align the deadline to the deadline for filing the employer's tax return.

I am more interested in the two questions in the original post. Anyone familiar with these situations? Thanks for any help!

Our firm has been approached by a governmental entity to provide TPA services to their money purchase plan. Curious as to what type of services TPAs provide for governmental plans other than documents, distribution, rollover and compliance assistance? And do most governmental plans use TPAs?

employees of employer b are excluded from plan a unless employer b adopts plan a "The following Employees shall not be eligible to participate in this Plan: Employees of Affiliated Employers, unless such Affiliated Employers have specifically adopted this Plan in writing."

I don't see how a CPA audit of the plan has any bearing on the situation, esp. since they have not brought up this issue. So the contribution and the corporate resolution do not line up. I would not treat that as a plan issue. As long as all the other rules pertaining to non-discrimination, deductions, etc. are followed. Ultimately it is your decision whether you end up correcting under EPCRS but I wouldn't.

Clearly, the employer intended to fund the net number because they issued the check for the net amount. If I were in your position, I would clarify/modify the resolution to show the net number and not bother with EPCRS.

Not that I agree with the IRS position. If the code/regs do not define "affected employees" and the plan document does not define "affected employees" it leaves the plan open to the IRS' and the courts' interpretation of who the affected employees are. You have a good argument if your plan document defines who the affected employees are. According to the IRS 'dictionary,' employees who terminated during the applicable period whether voluntarily or involuntarily are affected because the termination happened during the applicable period. Your termination in June may have been in anticipation of the plant closing in August Not that I agree with the IRS position, but I am trying to find language in the code/regs that would contradict this IRS interpretation.

"Looks to me that example of the issue is that employer decided to contribute $100 in plan year x, but only put $90 in the PSP" How about looking at it this way: the employer contributed $90 and $10 of forf was added to the contribution? Unless the document has rigid language regarding the contribution formula you do not have an operational failure. So the question is: does the document say that certain groups/classes will receive a specific percentage of their compensation? If the document says for example that secretaries will receive 5% of their compensation and forfeitures will be added to this contribution then you may have a failure under the scenario you describe. Otherwise not.

What is the plan's contribution and allocation formula?