PensionPro

Thanks, Tom. I had deleted my prior post regarding key employee definition under TEFRA after I realized the original question probably related to HCE definition. Here is the relevant section from TEFRA anyway ... PL97-248.pdf

There was a time (I believe under TEFRA, 1982) when anyone who was an officer during the plan year or 4 prior years was a key employee regardless of compensation. Are you working on a 1982 plan year?!

There are about 150 professional designations listed on the FINRA Web site. The client usually has no idea which designations are difficult to obtain and which are relatively easy. Most don't know if the QKA is harder or CPC. To the client its just some random letters after your name. So in marketing situations only, I am PensionPro, CPC, QPA, QKA, TGPC.

Participants may rollover their balances into the 401(k) plan, the employer may not transfer the balances or merge the plans.

From 1.415-2(d)(2): paragraphs (d)(2)(i) and (d)(2)(ii) of this section include foreign earned income (as defined in section 911(b)), whether or not excludable from gross income under section 911. Compensation described in paragraph (d)(2)(i) of this section is to be determined without regard to the exclusions from gross income in sections 931 and 933. Similar principles are to be applied with respect to income subject to sections 931 and 933 in determining compensation described in paragraph (d)(2)(ii) of this section. Hope this helps.

If the corp is 2-yrs old are you saying the owner been employed for 3 of the last 5 years but the common law employees have not? All employees who received at least $5,000 in compensation during any 2 preceding calendar years (whether or not consecutive) and who are reasonably expected to receive at least $5,000 in compensation during the calendar year, are eligible to participate in the SIMPLE IRA plan for the calendar year.

The user fees are listed in sections 6.03 and 6.04 of rev proc 2013-8.

Certain meal and entertainment expenses are subject to a 50% limit. If meals or entertainment are provided for the benefit of employees, the employer can write off 100% of the cost as a business expense. This is an exception to the usual 50% write-off rule. Common examples of expenses that can be written off at 100% include: Meal and entertainment expenses for a company picnic or holiday party. Free coffee, bottled water, donuts, etc. provided to employees at the place of business. Free food or beverages provided to the public for promotional purposes. Meals provided at the place of business to more than half of the employees as an enticement for working after-hours, weekends, or holidays. Cost of meals included on employee W-2 forms as taxable compensation.

IRA assets are protected from bankruptcies but not other types of judgments. Qualified plan assets are protected from bankrupticies and other types of judgments under ERISA. The amount of bankruptcy protection for IRA assets may vary by state. My understanding was the the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCA) raised the limit on bankruptcy protection to $1 million of IRA assets even if the limit is lower under state law, but you may want to verify that because the article below seems to offer a different view. Qualified plan assets rolled over into an IRA are exempt from bankruptcy proceedings even if the amounts are greater than $1 million. This 2011 LA Times article might be helpful because it references the golden state: http://www.latimes.com/la-ira-story3,0,6977190.story

Former key employee can become a key employee in subsequent years.

Couple of prior threads on the topic ... http://benefitslink.com/boards/index.php?/topic/20684-qdro-processing-expenses-for-db-plans/ http://benefitslink.com/boards/index.php?/topic/41002-qdros-reasonable-administrative-fees/

The system (widely used in the industry) only goes one decimal. There is nothing that says it is wrong to only go one decimal. With the same fact pattern we have 60% = 60% 60.0% = 60% 60.04% > 60% Should I take our report that says ratio is 60.0, then hand calculate to see whether it is 60.04 or 60.002 or just rely on the report? Fun stuff.

TH ratio on system report is 60%, but it is actually 60.04. All the numbers including inservice distributions have been reviewed. Is the plan top heavy?

If no one worked 500 hrs then a benefit has not accrued in your example.

If no benefits accrued there is no cutback. You can amend if no one has attained rights to a benefit/contribution. Watch out for plan language that waives allocation conditions for deceased, disabled, retired participants, etc.

Is this permissible in a standardized plan? I thought a standardized plan must benefit all participants except terminees with less than 501 hours.

Depends on the facts of the case. In a March 19, 2009 ruling, the U.S. District Court for the Northern District of Texas recognized that the Texas Whistleblower Act prohibits health care organizations run by the State of Texas from retaliating against employees for making good faith complaints of violations of the Privacy Rules of the Health Insurance Portability Act ("HIPAA"), Nevertheless, the court dismissed the wrongful discharge lawsuit brought by a former Terrell State Hospital security guard who alleged he was wrongfully fired for complaining to the U.S. Department of Health and Human Services Office of Civil Rights (OCR) that the Hospital violated the HIPAA Privacy Rules because the plaintiff had failed to present sufficient proof that he was terminated in retaliation for filing a HIPAA complaint.

http://www.gpo.gov/fdsys/pkg/USCOURTS-ca10-10-05123/pdf/USCOURTS-ca10-10-05123-0.pdf

For those covered by the employer's health insurance, the employer pays the employee $600/month in cash. For those not covered by the employer's health insurance, the employer pays the employee $200/month in cash. The amount is reported on box 1 of W-2. Would this be considered fringe benefits or regular compensation? Thanks!!!

No he can not set up a plan for himself.

Retirement Savings Contributions Credit (Saver’s Credit) An individual may be able to take a tax credit of up to $1,000 ($2,000 if filing jointly) for making eligible contributions to an IRA or employer-sponsored retirement plan. Who is eligible for the credit? The individual claiming the credit must be: Age 18 or older; Not a full-time student; Not claimed as a dependent on another person’s return; and With an adjusted gross income not more than: $57,500 if your filing status is married filing jointly (for 2012; $59,000 for 2013), $43,125 if your filing status is head of household (for 2012; $44,250 for 2013), or $28,750 if your filing status is single, married filing separately, or qualifying widow(er) (for 2012; $29,500 for 2013). Retirement plan contributions eligible for the credit Eligible contributions include: Contributions to a traditional or Roth IRA, Elective deferrals (including after-tax Roth contributions, if available) to a: 401(k) plan (including a SIMPLE 401(k) and the federal Thrift Savings Plan), SIMPLE IRA plan SARSEP 403(b) annuity governmental 457(b) plan Contributions to a §501©(18) plan, and Voluntary after-tax employee contributions to a qualified retirement plan or 403(b) annuity. For purposes of the credit, employee contributions will be voluntary as long as they aren’t required as a condition of employment. Rollover contributions aren’t eligible for the Saver’s Credit. Also, your eligible contributions may be reduced by any recent distributions you received from a retirement plan or IRA. Amount of the credit The amount of the credit you can get is based on the contributions you make and your credit rate. Your credit rate can be as low as 10% or as high as 50%. Your credit rate depends on your income and your filing status. See Form 8880 to determine your credit rate. Example: Jill, who works at a retail store, is married and earned $30,000 in 2012. Jill’s husband was unemployed in 2012 and did not have any earnings. Jill contributed $1,000 to her IRA in 2012. After deducting her IRA contribution, the adjusted gross income shown on her joint return is $29,000. Jill may claim a 50% credit, $500, for her $1,000 IRA contribution. http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-Retirement-Savings-Contributions-Credit-(Saver%E2%80%99s-Credit) http://www.irs.gov/pub/irs-pdf/p4703.pdf

Per §72(m)(7) "an individual shall be considered to be disabled if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration." Goes back to the question, how does the plan define disability. One thing is clear that if it is a hardship distribution, it is not allowed.

You are correct to the extent that safe harbor contributions have for the most part the same restrictions as deferrals. However see IRC §401(k)(2)(B)(i)(I).

yes if provided in document and disability meets plan's definition

From experience liquidity is a critical issue. Death, disability, plan termination, employment termination, depreciation of assets, etc. are all factors to be considered. Volatility of the investment portfolio and how it affects the management of benefit liabilities is worth thinking about. Increase in the plan's liabilities during a period of declining asset values may not be a desirable outcome in a DB plan. As you point out these issues exist when investing in equities, etc., however the issues are magnified when investing a majority of the plan's portfolio in a single illiquid asset with high risk/reward characteristic.