Lou S.

I guess the question becomes what happens if the employee actually terminates employment after the rollover distribution is processed but before 12/31? Does that trigger a required minimum distribution for the year due by April 1 of the year following separation based on the prior 12/31 account balance that has now been rolled over? That is does it retroactively make a portion of the rollover ineligible for rollover as it is now a RMD? Might this be analogous to an HCE in a 401(k) plan who rolls over his distribution to an IRA upon termination of employment only to find months later that a portion of his rollover is now ineligible because he has a required a refund of excess contribution to pass the 401(k) nondiscrimination test?

Your original post has the answer in the "any limit". It is recharaterized due to the 415 limit. In our case it was an owner and spouse over the 401(a)(17) comp limit who each made 401(k) = to the catch-up limit of the year being audited and a PS contrib equal to the 415© limit that year causing 100% of their deferral to be recharaterized as catch-up. I think it is in the code or regs of 414(v) ? the section dealing with catch-ups. Slightly different facts than yours but pretty sure the logic still holds.

Yeah, no problem we do it all the time. Had an auditor question it one time but as soon as she ran it by her supervisor it was not an issue any more. edit - this was an IRS audit, not an annual independent audit just to clarify.

if your document has an integrated formula you should follow the terms of the document if he wants the same percentage going forward, amend it to pro-rata allocation

They are eligible 1/1/15 then they are eligible for the 3% SHNE. Plan should have been drafted to exclude them from the plan so they didn't become participants if you didn't want to give them a contribution.

I think you mean W-2 earnings, his 415 compensation is the sum of his W-2 pay while an employee and his Self-Employment earnings. It would seem the most reasonable would be to calculate his contribution under the plan and prorate his portion. Also you might want to ask the accountant and partners how exactly the expenses for pension are being allocated. Hope that makes sense.

I could be wrong but I think that is probably because the statue and regulations there under predate the popularity of LLC concept. That said if the LLC is taxed as a corporation I would think you look at (i) and if the LLC is taxed as partnership you look at (ii). I could be wrong on this but to me that just seems like common sense and it's what follows in nearly every other regulation when you are looking at control or beneficial ownership interest or similar such concept. But maybe someone more in tune with the party in interest rules than I am can give you some additional insight of point to definitive source or citation for you, I'm not sure I can point to a specific one.

If you are trying to get around the 50% control by making a distinction that it is called an LLC and not a Corporation or Partnership I don't think you'll get very far with either the DOL or IRS. All of these rules tend "look through" to what is really going on with respect to who has control or a controlling interest.

An LLC is just a shell, you need to look at how they are treated for tax purposes. It could be as as sole prop., partnership, C-Corp, or S-Corp as I understand it. But maybe there is a CPA on the board who can chime in with a more authoritative answer.

Back when refunds were taxable in the year deferred and not the year received and you had non-calendar year plan issues they were done on a FIFO basis. I'm not sure it matters anymore since for gain/(loss) calculation you just apportion a percentage of the gain/(loss) for the year to the refund. At least that's the way we do it.

Yes I would agree she get a safe harbor of 3% of $0 comp from DOE to PYE and then she needs to get 3% of 415 comp for full year to satisfy TH minimum which can be reduced by the $0 she received as a safe harbor contribution.

I would agree with this approach.

what does the loan policy say? at some point he's in default if the payments aren't made/caught up.

If you look in the instructions for the 1099-R the IRS lays out some pretty easy to follow and detailed instructions for what the PLAN should to do when this situation occurs. I think the heading is "Corrective Distribution Following Total Distribution" of something similar.

Not allowable. 3% non-elective is less than the at least 4% minimum match that participants were guaranteed under the document and in the notices.

Pre-approved prototype and volume submitter DC plans is 4/30/2016. Pre-approved DB plans is TBA but will be 2 years from when IRS approves the documents. Custom plans vary based on 5 year cycle and last digit of lead sponsor's EIN.

Yes you can do a SHNEC of 3% and a fixed match of 25% of the first 4% of pay.

In that case yes, if they match 100% of the first 3 and 50% of the next 2 that will qualify for ACP relief when there is a 3% SHNEC. The rule as I recall is you can have any match qualify as a fixed match in the document so long as it follows a few simple rules - 1 - It can not match deferrals more than 6% of pay. 2 - It can not increase as the rate of deferral increases There may be a couple others but that's the basics. What they can't do is count the 3% SHNEC as a 3% match and only match 50% from 3%-5%.

If I understand it the client wants match of 0% of 1st 3 % plus 50% of next 2%? If so that won't satisfy the ACP safe harbor as you have an increasing rate of matching contribution as deferrals increase, namely the bump when a deferral rate > 3% of pay.

I agree with Mike. To go further, is 100% of the Drs individual corp income from services to Dr. Group Inc.? If so they might be employees of Dr. Group Inc. improperly receiving payments to their corporation. But this isn't really my area of expertise. Just how it "looks" to me.

Isn't Doctors group inc the FSO (A-Org) and aren't each of the individual doctors B-orgs in this classic ASG? https://www.irs.gov/pub/irs-tege/epchd704.pdf

I believe you are obligated to try to locate them when you are forcing them out. I am not aware of being obligate to track them down if they don't give you a forwarding address. Obviously if you can find them cheaply best practices would imply doing so but there is a cost benefit issue to deal with, namely who pays for locating them? And it's not just statements you need to worry about there are a host of other items required to be sent to participants like fee disclosure, SMM and SPDs, SAR, etc...

Self employed or W-2 employee? Also I'm not sure if the IRS has a stated position on this but I was under the impression that they frown upon giving accrual credit to folks with zero pay.

Generally you can discriminated against 1 HCE over another but in this case I think you run into potential ADEA violations.

You might want to talk to the actuary who signed the 2014 SB, especially if he's still going to be signing the 2015 SB.