Lou S.

Yeah right now it is a prohibited loan to the employer/owner. If he doesn't pay it back, it is called theft and generally has criminal implications.

I would be uncomfortable giving advice in this situation but I suspect things like this have been going on one day less than government programs tied to income caps have been going on.

I've seen similar patternes with PS money being requested for hardship on an annual basis but defering for 6 months than taking it out as harship seems nutty as ESOP guy implies above, unless there is a generous match that overcomes the negative tax consequeses.

Government intent? Becasue they said so? I'm guessing at govenment intent but because they are allowing sfae-harbor contributions to "buyout" testing they seem to be treating safe harbor contributions as true retirement plan contributions much the same way they treated momey purcahse and target benefit. As for correcting I agree with BG, check EPCRS. Participants were probably allowed to take safe harbor monies becuase they didn't have other amounts but it might be worth cheching to see if participants did have sources that were eligible and just move money around now to put them where they would have been had the funds come out of the correct eligible sources.

Agree 1©(9) is where CCT goes on Sch H Call Met Life (or custodian of assets) on Schedule A question, they should know the answer pretty quick.

Sounds like a partial termination upon the complete discontinuance of employer contributions. Just curious how are they buying back the stock when vested participants leave and take a distribution? Granted I don't really work on ESOPs but generally the ones I've seen the company often needs to make contributions just to have cash in the Plan to pay on going distributions.

Cross test the contribution. Have groups A, B & C.

Even if the CB credit is 5% it is unlikely the DC equivalent for gateway testing is exactly 5%. Or simply put CB credit of X% is generally not X% for gateway testing.

The DB allocation rate has to be converted to a hypothetical contribution rate for each person whihc can be used to satisfy some or all of the 7.5% gateway. 0.5% cash balance credit probably not equal to 0.5% contribution for gateway testing. And 0.5% accrual in DB is very unlikely to be exactly 0.5% contribution rate for gateway. If you are using the gateway and your requirement is 7.5% then all NHCEs that get any employer allocation must get 7.5% to pass gateway.

I've always took level amortization to mean, not less frequently then level amortization. That is you can't have negative amortization, ballon payments, interest only or similar but I see nothing wrong with making excess payments to reduce principal. Though much like making excess payments on your mortgage it doesn't reduce your future scheduled payments just pays the loan off soome than originally intented.

You can't retroactively terminate a plan. But what is the problem with terminating prospectively? You already have a 5500 filing requirement for PYB 7/1/13 and PSP has no required contribution.

Assuming she is now eligible for the plan and an NHCE which as a new employee she would be unless she has more than 5% ownership in 2013 directly or through attribution. If she is new, she didn't make over the comp limit in 2012.

For cross tested plans we send out a resolution approving the contribution allocation. Doesn't hurt to have if the IRS audits the Plan. But technically I don't think it is required.

Isn't rule actually to distribute as soon as administratevely feesable? I suppose an argument could be made that it is not administratviely feesable until the QDRO is issued. Might be a stretch but I'd doubt the IRS would challenge it too much.

What facts were mistaken? Some forms have a box for % of pay and another for straight $ amount. He mught have thought he was filling out the box for $50 and put it into the 50%. Just throwing it out there not that I actially believe it. Like you Im not sure where mistake of fact might come in on this one.

If the election for 50% was valid the participant is out of luck.

EPCRS would be the best way to correct.

don't be the last participant to return a withdrawal form? don't forget the 25 HCE restricted distributions. recertify? Is this a PBGC plan? candidate for distress termination?

Mine has never asked, small employer. My wife's employer did ask to show coverage about 2 years ago and I believe they requested a copy of marriage cert.

Plan fees will increase.

The 3% safe-harbor has to be made to the terminated employees because you can't have hours or last day on the SH piece. The new employees are not eligible so they are not participants and get no contribution, unless you have split eligibility that lets them in for 401(k) which would also make them eligble for top-heavy.

That make sense. I agree with Belgarth. Given that the failure to make RMD is 50% excise tax, I'd advise the client to make additional distribution to satisfy the RMD if any required. I would not worry about it if there was a loss and RMD is smaller than actual distribution.

Maybe I'm obtuse but how do you process a 2013 minium distribution and then retroactively amend to a short prior year? Wouldn't the short year amenedment have to be adopted before 12/31/12 thus rendering the 8/31/12 valuation moot for calculating the 2013 RMD?

Yes you can have seperate formulas if so provided for in the document and it passes testing. With no HCEs the testing would pass automatically so it's just a question of getting it the document.

He has a zero balance after payout. I assume the current year contribution get's no weighting in earnings so no earnings on the current year contribution, just pay him out after it hits the account. You can get a new distribution form for the residual payment if you need one. You did a valauation as of 9/30 right to get the payout? Why not just do an additional allocation from 10/1 - 12/31? Alternatively allocate the g/l for the whole year carving out what was already allocated to the physician. But if the plan terms already indicate that an interirm valuation is done for "large distributions" then it may also tell you how to allocate fo the year.