Lou S.

Send them a letter telling them you will return the funds on the conditions that they indemnify you for any loss you should suffer from returning the funds as well as paying for any and all accounting fees associated with filing amended tax returns for the years in question and reimbursing you for any taxes the paid that the IRS fails to refund.

Although not something I experienced first hand, I understand in the "good old days" this was somewhat standard procedure for some plans to get a de facto extension of time to complete the audit. Under the computer age filing I don't know if it works anymore. FWIW, If it was my plan, I'd file with the "draft Audit" and file an amended return the day I got the "final Audit". But I'm not sure that's the formal advice I'd give a client.

Are you sure there weren't any residual dividends hit the accounts in March and got swept out?

What does the document say?

I am not a lawyer but the first thing I would do is send a joinder (is that the right word) notifying BOTH plans of a pending QDRO. Preferably BEFORE he files any retirement papers or make any elections with either pension plan.

There could be some good reasons for doing what is suggested, but it doesn't sound like any of those reasons would apply to you based on your original post. If it was me, I'd leave it where it is. disclaimer - this post is not meant to be construed as legal, tax or investment advice.

Yes it works fine. You simply have them enter on a the next future entry date if they do satisfy the 1,000 hour rule - you just need to draft the entry conditions correctly. The devil is in details of tracking those that do become eligible that the client assumed would never work 1,000 hours.

Do you have a benefit statement with the home address of an officer of the plan sponsor - if yes, I'd start there. Have you been paid for 2014? It is the Plan Administrator's legal responsibility to file the Form and get an independent audit if required. Under what authority could you as a service provider file the form yourself and would you want that responsibility/liability? Perhaps they could qualify under Orphan Plan rules but I think they are pretty specific.

I am not aware of any exception for 1st year plans and I was unable to find any special rule in the instructions to Form 5500.

I'm confused. Are you talking about employer contributions like profit sharing? If they are late then then aren't deductible for that tax year. If they are more than 30 days after the due date they are part of the next year's 415 limit not the prior year. (though I think that may be different for 412 DC plans like Money Purchase).

Do you force married couples to open a non joint account to make payments? I'd have trouble making the payment to an account where the participant is not listed as an account holder but if they want it to go to a joint account, I'm not sure any authority exists to deny the payment.

It does not reduce out of pocket costs for the plan sponsor. Do we not all agree that this is the point of a vesting schedule at the end of the day? To reduce costs for the employer? I thought it was to benefit long term employee and encourage loyalty...at least once upon a time when I started in this business.

If he's the only participant he, he is not a PBGC plan - assuming he is also the owner of the business. If you have a CG attribution (possibly because of community property state issues with husband-wife) then you likely have 401(a)(26) coverage issues with the plan and it could be a PBGC covered plan if the wife's business adopts the plan and there are more participants than just the owner husband and wife.

If 2014 was a short plan year, yes you can do what My 2 cents suggests. If the plan was adopted in September retroactive to January 1st (to get full year limits for 415 & 401(a(17)) pretty sure you are going to need an audit for 2014.

I can't speak for all prototype documents but I'm almost certain that ours had a clause in the Master Text that said if it it wasn't answered that the State Law or the Plan Sponsor (or maybe the Plan Administrator which in our case was usually the same) would govern.

I've never heard of it having to go to a different IRA. I always though the point of the rule was more, "oops I changed my mind I don't really want to liquidate my retirement savings and pay taxes and penalties." The 1 rollover per year rule (with tightened guidelines about 1 per taxpayer per year) is designed to stop the abuse of the rolling interest free IRA loans. You can still to direct transfer of IRA -> IRA as often as you want through trustee -> trustee transfer.

Unless there is QDRO assigning the benefits to the spouse, it would a violation of the anti-alienation provisions of 401(a)(13) to pay the benefits of the participant to the spouse (or her IRA).

I could see an argument for either but I'd treat them as "active" since they are still employed by the Plan Sponsor at EOY.

1 - None that I can see. 2 - Correct the prior distributions from the "old" DB plan goes against the 415 limit of each participant in the "new" plan.

New one on me. I've never heard of such a thing.

1 - if the person is eligible then you can no longer file and EZ even if the participant has a $0 balance. 2 - no clue for sure but if they discovered the missing 2013 Form 5500 and sent notice, it is likely they will discover the missing 2012 return if they try to match BOY 2013 assets with EOY 2012.

We've used that option when there is less than 3 months left and you can't put in the safe-harbor that year because you can't meet the minimum time requirements. Works for new plans or a PS plan adding a 401(k) feature for the first time.

As Tom is alluding to you are not exempt unless you follow all the rules which include telling folks about the plan, giving them the effective right to defer and handing out the required annual safe harbor notices timely each year. If you do comply with all the rules and the owner is still the only one contributing in might look a little fishy but from a legal stand point it is all good and still deemed not top heavy.

The only ways they would need an additional TH contribution is if there were non-safe harbor employer contributions or allocations of forfeitures, or if you had some split eligibility where the right to make 401(k) contributions was sooner than the right to receive safe harbor contributions - such as immediate eligibility to make 401(k) but year of service to receive match. Otherwise as TPA correctly points out a plan that has only deferrals and safe harbor contributions is exempt for the TH requirements or is deemed to be not TH.

Assuming they have no other 401(k) and you have at least 3 months left in the plan year, then yes you can.