Lou S.

Allowing partial distributions is allowable. You'd likely create an optional form of benefit available to all participants.

Thanks. Yeah nothing screwy at all. No last day. No split current/prior issue, both are prior year. Everything looks kosher expect for the fact that the prior year ACP is just a hair too small.

If you do a search I think this came up a few weeks ago. If I recall correctly the conclusion was "amend" and "no submission required on pre-approved plans". Assumed participant allowed in early is NHCE.

Plan uses prior year testing. If using current year testing would pass ADP & ACP easily. Plan passes ADP by a lot using prior year testing. Plan fails ACP by tiny amount using prior year testing. Matching formula has always been the same in the plan. Can I shift small amount of prior year ADP to prior year ACP to pass ACP test? I know I can do this current year, I'm just looking to see if it is allowed with prior year.

Qdrophile took the words right out of my keyboard. And said it better than I could have.

How old is he? Is he an active or former employee? What does the document say about distribution options?

re-amortize over 5 years or repay the loan. the loan he has is NOT for the purchase of a principal residence and does not qualify for the extension past 5 years. One of the many reasons a some plans don't allow loans more than 5 years, even for home purchase. They are simply too much of a head ache for some folks.

I would say because they were terminated there was a distributable event (separation from service) and you have an offset rather than a default.

I believe if you have excluded them from the plan (or portion of the plan) that they do not need to receive the contribution. It sounds like the plan was drafted such that they never enter that component of the plan. In other words it sounds like you are good to go, and not give them a contribution.

Is the plan retro-active to 1/1? Is the plan drafted to specifically exclude them? If it is drafted to exclude, do you pass coverage testing? What does the document say?

If the self-employed person (or them and their spouse) are the only eligible participants and assets are less than $250K then you do not have to file form 5500 series, If you have even 1 eligible participant who is not the owner or their spouse employed, you have to file Form 5500 or Form 5500-SF no matter how small the assets are. I believe this is probably the exact same answer that Tom is quoting above.

How are W-2 handled and which year does it go into for 402(g)? Those would be my biggest concerns. But I agree with QDROphile's response above.

What is the drawback? I'm of the opinion that Plan Loans should be hard to get and you shouldn't be using them as a piggy bank so the additional restrictions are good in my opinion. That said, I don't believe you can refinance a home purchase loan later on to a term of more than 5 years since the new/refinanced loan is NOT for a home purchase anymore. Though maybe the IRS has some guidance that allows it, if so it is something I missed. And yes the refinanced loan generally get's you stuck with a shorter repayment period to not violate the 5 year repayment period. The other alternative is to pay off the first loan and take a new one with a new 5 year period, though sometimes that is problematic if the $50,000 limit reduced by highest balance in the last 12 month restriction comes in to play. edit:typos

LOL Sorry I can't help you with NJ withholding, we have very few east coast participants.

And while they may have had the best of intentions to keep the business going, without the proper amendments and notices to employees they might still be on the hook for the salary deferrals they improperly stopped, the safe harbor match they aren't making back to when they stopped and the problem will continue to accrue for at least 30 days after they notify employees and execute the proper amendments freezing the plan. Though if they go into bankruptcy they may be able to get out of the contributions.

You can self correct and hope for the best but this doesn't sound like it falls under SCP. VCP sounds more likely.

Maybe high paid employee can be his exit strategy by buying the business. Then he could safe harbor the plan himself.

How do you deduct unallocated contributions made in 2014 but allocated based on 2015? I'm not sure you have a mistake of fact. Maybe not the best solution but what about retroactively amending back in PS contrib. to 1/1/4 based on allocation conditions in the prior document? This solution might work better with an EPCRS submission to go along with the proposed correction. I doubt the IRS would have much of a problem with that correction method as elimination of PS in the first place looks like a mistake by prior TPA.

It's a plan disqualification defect.

They are being a pain in the butt. Show them the document that allows 1 trustee to act independently and ask them why they aren't following the written direction. You might also mention that their failure to follow the trustee's written direction might make them a fiduciary of the assets. Not sure how far that will get you but it sometimes get them moving.

I think you are asking tax and investment questions that are a bit beyond t he scope of this board. Not that they aren't great questions just that we don't really know your whole financial picture. If it was me I'd find a reputable Certified Financial Planner who had both investment and tax background who charges an hourly rate, not a a commission to review your whole financial situation and make some recommendations or plans.

If the old owners had more than 5% ownership in 2013 and are employees in 2014 they are are HCEs in 2014 regardless of 2013 compensation. The 5% ownership test is current or prior year.

Non-PBGC plan, what does the document say? I think there is a Rev-Proc (80-229 I think) dealing with underfunded non-PBGC plans in termination that allows reducing benefits is in a "nondiscriminatroy manner" one of which I believe was pro-rata reduction.

Yeah, I don't think you can change the in status form of payment due to QDRO but I've been wrong before.

Is the benefit in pay status? The plan probably allows a spouse to elect out of the QJSA so they would probably have the same options in a QDRO. Though I don't think the kids would qualify as an alternate payee unless it was a support order. Though I'll be the first to admit I'm not the most knowledgeable about what can and can't be done in a QDRO beyond some of the real obvious basics. There are a few QDRO experts on this board so hopefully one of them can chime in for you.