K2retire

Just to reinforce what others have said, the government considers an employee who has met the plan's eligibility requirements and passed a plan entry date to be a participant in the plan. For this purpose it makes no difference if the employee/participant ever has any money in the plan. That is different than what most employers (and some service providers) think of as a plan participant.

After using Relius Administration for a number of years, I was surprised to learn that PEWin apparently doesn't know that a participant who terminated after reaching the plan's retirement age should be considered "retired" and potentially receive a contribution for the year based on the plan's waiver of allocation conditions. Is there really no way to do that other than to mannually look at each terminated participant's date of birth and change their status to retired?

We've been really happy with Egnyte, a web based file server. The lovely thing is that we can grant clients access to specific folders so it can also be used to collect census data without using e-mail. We've also used it for audits and the DOL folks we've spoken to have reacted very favorably.

The deduction limit (25% of eligible compensation) is for the whole plan, not just an individual. The 415 limit (100% of pay or $49,000) is per participant.

He he adopted the plan as a participating employer for his self-employed business that is not part of the partnership?

Just to play devil's advocate for a moment, why wouldn't the participant want the highest (rather than lowest) possible interest rate? And in that case, if I wanted to take out a loan today at 7 or 8% interest, would that be considered reasonable?

Here's an odd twist on a common problem. A large plan with automatic enrollment provisions relies on a file feed from the recordkeeper to adjust payroll withholding. Due to an error in the file feed, one HCE's deferrals were reset to zero in the middle of 2010. This was not noticed until February of 2012. The recordkeeper is willing to fund the QNEC for their error. The plan failed the ADP test in 2010. Giving this HCE an additional amount potentially means that 8-10 other people should have gotten larger refunds. Because it is more than 12 months after the end of the year, would that trigger the need for a one to one correction? The election was for a specific dollar amount. For 2012 the participant has more than 9 months to make up the missed amount. Is a correction needed?

I think there is still a place for a top heavy minimum requirement -- but it should not be triggered by deferrals. If there is an employer contribution it is entirely appropriate.

I always understood their position to be that the deposit had to be made as soon as administratively feasible after the amount of income from which it could be withheld was determined.

Definition of compensation for S-Corp is w-2 earnings. Cannot use any K-1 earnings. So 401k should have been withheld from payrolls. And deposited to the plan within a few days of the payroll.

1099s are required to be sent to you by January 31 and filed with the government by the end of February.

I second that -- estate tax rules are a whole different animal.

When I was looking a couple of years ago, there were plenty of administrators, but no jobs. Now it seems that the job openings are expanding. Not sure what has happened to all the people who wanted to change jobs. But the people I talk to definitely are not interested in relocating.

One of my former employers did that. He felt it was important to split the work rather than be totally dependent on a single firm. One of the firms he used was in the same town, the other was about 250 miles away.

I've also encountered service providers who won't process ANY distributions until they have the paperwork to do them all claiming that to do them at different times has the potential to be discriminatory. That arguement might make sense if the assets are pooled, but certainly not in an idividual account plan.

That would be reasonable, but highly unlikely!

I've seen it both ways. Most of the administrators I've talked to would prefer to be paid the overtime. And many of them have their work peer reviewed -- not management reveiwed.

It amazes me how often something that simple is overlooked as a cost cutting measure!

The money was not eligible for rollover, so it must come out of the IRA. I could see some providers sending it back to the participant instead of back to the plan, however. That would allow them to claim they were not responsible for what happened to the money in case there was any ongoing litigation between the parties.

It may also be a timing issue. Had the first correction been done before the second error occurred? If not, that makes a good case for saying that the procedures to correct happened after both errors.

Every plan I've worked on (admittedly all of them very small) has permitted a participant or a beneficiary to take their benefit at termination of employment, regardless of age. Why would that not be an option in this case?

I believe many MPPPs did that after EGTRRA. But that doesn't change the rules that apply to the MPP money type within the plan.

The firm I work for has a TPA service and also a financial advisory division. Prior to moving to our services a few years ago, a client had permitted a group of owner-employees to establish self directed brokerage accounts. We have no knowldege of whether or not other employees were ever given this option. The current enrollment materials make no mention of this option, instead listing only the funds available on the platform where the other accounts are held. As part of a self correction for one of the accounts that was set up incorrectly, and allowed an inappropriate distribution, we're establsihing policies and procedures for participants wishing to establish such accounts. (The money was repaid as soon as we saw the statement.) A couple of problems have come up in the process: 1. The financial advisor has already told the client that the procedures will only apply to new SDBAs because the existing accounts are grandfathered. 2. The client has indicated that they don't want to distribute this information to all employees for fear that it will prompt more of them to establish SDBAs. I know that both of those issues are a problem, but I need help finding a succinct reference to why they can't do what they want (especially the financial advisor who is considerably higher up the food chain here than me).

To your question, they quit asking about it, so apparently they decided they didn't need that information any longer.

I thought it was an IRS requirement, not a document question, that current year testing be used.