Lou S.

You can purchase a deferred annuity (likely at a premium) provided it retains the distribution options available under the plan. Good luck.

Forfeiture if allowed in Plan Documents which it probably is. Restore the $250 in unlikely event that beneficiary shows up at later time.

I agree with you.

Will the prior company be retaining/maintaining the plan or will the plan transfer to the new sponsor and part of the asset acquisition? If the former, separate limits, if the later it is a related plan of the new sponsor so it would affect the limits.

You are right. My bad. Got confused thinking the charity was the beneficiary. They rest of my post wrt to the RMDs and excise tax should still hold regardless of who eventually receives them.

In the past you were supposed to pay the excise tax and request a refund for cause. The IRS is kinder and gentler now. Send in an explanation of why the RMD wasn't made, how it was corrected and request that the excise tax be waived. A CPA should be able to help you with a letter. My mom missed and RMD when dad's IRA transferred to her. We made that year and the next as soon as discovered, did not pay the excise tax but requested a waiver and it was never an issue. Your mileage may vary but I've heard a number of similar stories to mine with waiving penalties on late RMDs. I'd also have to think the IRS would be especially understanding with a charity as the beneficiary.

I don't think so. It is Dad B's ownership that is attributed to Child #4. Since all children are over age 21, and each has ownership in only one company, they all should be ignored. Therefore, I believe there are no control groups in this example. You're correct. I had my attribution direction crossed up. It attributes to the person with greater than 50% of the business but not the other way. Thanks for picking that up.

Was he paid for work in 2014? If not he retired in 2013 and the first RMD was due 4/1/14.

There is some prior discussion here http://benefitslink.com/boards/index.php?/topic/40654-timing-of-forfeiture-of-related-match-on-adp-corrective-conts/#.VGKOt8nYtKo and http://benefitslink.com/boards/index.php?/topic/9946-forfeiture-of-related-match-from-adp-test-failure/#.VGKO5MnYtKo

It should be in the Plan Document. Possibly under the title "forfeiture of related match" or similar item.

This may be helpful http://www.irs.gov/pub/irs-tege/epchd704.pdf I think that Company C & D are controlled by virtue of Child #4 ownership being attributed to Dad B. I do not think any of the others are controlled assuming all the children over 18 are also over age 21 which I believe is the age for 1563.

I believe Revenue Ruling 80-229 provides the authority for what you are describing and has several examples that should be reviewed before doing so. I'm not sure what the practical consideration are but I would strongly recommend a DL to client and hold harmless release if they decided they don't want a DL. After that I think a cover letter or notice with the withdrawal packages stating something to the effect of - "Because the assets in the Plan's trust are not sufficient to cover all benefit liabilities your distribution will only be made to extent funded but the Plan's trust. You will be receiving X% of your benefit accrued under the plan " We have not done one of these where the owner did not waive a portion of their benefit to make it whole but it does appear permissible under IRS guidance and I don't believe the IRS considers it a prohibited 411 cut back.

As long as you don't have mid-year safe-harbor amendment issues or the usual allocation cutbacks for folks who have already met allocation conditions I don't see why not. I'm sure we did something similar on EGTRRA restatements back to 1/1 the year IRS issued opinion letters and we've terminated several of them since with favorable IRS DLs and never a question for the IRS on the effective dates.

Sounds like a question for the payroll IT department on how they will be generating W-2s.

I'm not sure I follow your last post but are you proposing that the Plan Administrator pay all the taxes the participant incurred on the distribution plus grossing that up for t he additional taxes owed? That would seem to put the participant in a BETTER position than had the plan not been disqualified in the first place as you would essential convert his pre-tax retirement balance into an after tax balance with a basis that is no longer subject to taxation on that portion. Or maybe I misunderstand your question and you are saying maybe the total taxes were to throw out a number $50,000, if the additional "taxes" because it all became taxable now at highest marginal tax rate was hypothetically determined to be $10,000 that the $10,000 "damages" should be grossed up for the additional taxes that will be due on that?

I believe there are a number of acceptable methods for making up missed loan payments for an approved leave of up to 12 months when the employee returns, all include accruing interest for the missed period. 1. Make a lumps sum payment to bring the loan current and continue with the payments. 2. Reamortize the outstanding balance of the remaining term of the loan (not to exceed the 5 year limit from the initial loan). 3. Balloon payment at the end of the loan term to pay it off. I believe this is an exception to the level amortization rule of 72(p) in this limited case but you may want to double check that. 4. I think other there are few other reasonable methods as well but I'm not sure. We use option 2 for the plans we provide services to. As for the LTD, I can't help you there. edit - you may find this useful from the IRS phone forum on loans http://www.irs.gov/pub/irs-tege/loans_phoneforum_transcript.pdf see page 4 of the transcript for approved leave of absence.

I don't think it is one of the things specifically allowed in the SH plan to amend mid-year. That said, I'm not sure it is an amendment that the IRS would have a problem with provided advance notice was given and it didn't change info in the SH notice. Amending now effective 3-1-15 I would think would be no problem at all so long as the SH notice addressed it.

There are plenty of safe harbor formulas that get you ADP relief but NOT ACP relief. Voluntary after tax contributions as I understand it are always subject to ACP testing but maybe I'm missing something.

7 & 2 are pushing the bounds to pass testing in my humble opinion. But maybe there is some reasonable rationale for hiring such young kids and putting them on the payroll. I agree with John's recommendation that this is a decision for the client/CPA/employment attorney and not for you as the TPA to decide.

The fund actually earned 10% for the period in question he should be credited with 10%. The 10% quarterly rate earned would be ~40% annual rate. So what you really have is $1000 x 10% x 92/92 ~ $1000 x 40% x 92/365 Depending on whether you use simple or compound interest or how you annualize the 10% return any amount you determine will be very close on amounts, with a few pennies.

A 5500 should not be filed with an SSN, you need an employer identification number (EIN). If the Plan Sponsor did not have one, one should have been applied for with Form SS-4 for the purpose of filing the Form 5500 series.

As long as he didn't have more than 50% interest in A you are fine for 415

Then yes you can do what you describe. But by using the $2,980 on the 9/30/2014 test, that will not be available for the 9/30/15 test as you've used part of the 2014. edit - my numbers were off

Maybe. Was any of the 5,500 catchup for 2013 used on the 9/30/2013 test?

It is a good question. One I don't have an authoritative answer too. However I assume the "damages" would be based on the acceleration of taxes on the entire balance in the year of disqualification and loss of tax deferred growth on amount disqualified. I image you could do an after tax present value of the lump sum less taxes against an after tax present value of the stream of payments in retirement if you make some assumptions about growth of the assets before disqualification and assumptions about future tax rates and take the difference as the "damages".