Lou S.

My understanding is that is the way it works. If you want to retire the loan you have to pay it off with interest. I think the 5 year requirement is only with respect to being 72(p) compliant. The default part is triggered by non-compliance with one or more parts of 72(p) but it doesn't technically remove the obligation to repay the loan. Frankly I think the IRS position on "carrying" a defaulted loan on the books is a bit strange in the first place but that's what they've chosen to do. I imagine it is designed to keep from circumventing the in-service distribution rules by constantly borrowing, defaulting and removing the loan balance. But that's really just a guess. The once nice thing about "carrying the defaulted" loan is it counts against the loan limit and eventually you don't have to worry about that troublesome participant defaulting on another loan. Though they can be a pain when they keep calling as to why they can't take another loan.

I don't know the general answer to your question but I do know that often times Prevailing Wage contributions are used as QNEC to help with ADP testing. When this is done the PW contrib takes on the characteristics of a QNEC and become ineligible for hardship distribution.

I'd ask him to point out for you in the DOL regulations on EMPLOYEE contribution timing where EMPLOYER contributions are ever mentioned.

We don't reporting matching contributions. I'm not sure why you would.

Only one 415 limit in this case. See 1.415©-1(a)(2)(iii) Always one 402(g) limit and one catch-up limit. 403(b) and 401(k) are aggregated under a single SSN for these limits. If there is a 457 plan there may be an additional deferral and catch-up opportunity but I forget which type of 457 plan allows for this.

I don't see a problem. Though I'd be getting a supplemental notice out ASAP that the plan is no longer SH.

Plan A will not pass testing with only the owners getting a PS contribution unless all NHCEs terminated with fewer than 500 hours which is extremely unlikely given your 9-30 date as your ratio percentage will be 0% which will only pass if there are no NHCEs required to be in the 410(b) test. Yes the plan would need a TH minimum contribution if it makes a PS contribution. However the TH contrib in a DC plan goes to non-key employees employed on the last day of the plan year of which there are none. Also the way you have worded this question makes me think this was an asset sale and not a stock sale, if that's not the case my answer might change.

Like I said the IRS does not offer CE but I think you can self report the credit for ASPPA credit towards the 40 hours required but should probably double check with the ASPPA on that in advance. The IRS used to offer a CE cert that was good for EA (both kinds), ERPA, and ASPPA as I used it to get nearly a 3rd of my credits in the last cycle but they stopped doing it the middle of last year I think which I think sucks. It was one of the few places you could get free continuing education credits and the content was generally at least as good as any ASPPA webcast and sometimes better.

This link should work for the one offered on 12/15 https://www.webcaster4.com/Webcast/Page/925/18376 If not do a google search on "Employee Plans Compliance Resolution System Changes (Revenue Procedure 2016-51) IRS Webcast" You can subscribe to IRS Employee Plans News here and the links to register to future IRS webcasts will come via e-mail. https://www.irs.gov/retirement-plans/employee-plans-news-3

While the IRS phone forum/webcast no longer seem to provide a certificate for CE I do believe they qualify for self study that can be reported for ASPPA credit. These are typically 1 hour so only 1 credit a piece and there are one or two scheduled before year end. They also may have past one recorded but I'm not certain of this. I miss when the IRS phone/web stuff gave EA credit.

You will need to report the flow of assets from BOY to EOY for the Plan. The assets are assets of the plan at BOY and have simply moved to a new investment. Somehow, you or someone else will need to reconcile the flow for the full year.

I think there are 2 things to be concerned with - 1 is the payout still under the 415 limit. 2 would this be a discriminatory amendment in practice There may be some other issues I'm not thinking of at this time. Is there a problem with simply allocating the excess assets to participants in a nondiscriminatory manner up to the 415 limit, assuming the document so provides?

I would suspect that in court the Plan Sponsor and/or Plan would prevail over the fraudulent claim for benefits from the person not entitled to those benefits but would likely need to determine if the cost of pursuing it is worth the recovery of the funds. If they can't recover the funds then yes they would have to restore them.

Are the assets coming due to a plan merger? Or did the plan simply change investment platforms?

Good to know. Sometimes it is nice to be wrong.

Does not have to be January 1 but it is too late to start a Safe Harbor Plan for calendar year 2016 as you need 3 months effective deferral to be a 1st year safe harbor plan. Plan would have needed to be in place by September 30th, 2016 for safe harbor. You can be a regular 401(k) for 2016 with profit sharing or match feature but you are subject to ADP/ACP testing on deferral and match. You can also use prior year testing for 2016 allowing the HCEs to get 5% of pay plus catch-up for 2016 as prior year assumed to be 3%. You could set up safe harbor for 2017 or amend regular 2016 401(k) to 2017 safe harbor at the same time as the plan is set up.

Are you expecting logic from the folks at Treasury?

Unless something has changed since the last time I looked at this, the regs are silent on this issue. I believe IRS informal guidance (possibly from the podium at an ASPPA conference) was that the safest course was to continue the RMDs that had begun. I do not know if there have been further comments on this issue.

If you are a member of ASPPA they will track your CE, at least for credits earned through them. They've somewhat limited self reporting in some areas. I'm not sure about ERPA.

No. If he's covered by a 401(k) plan he's considered covered whether or not he can make a full contribution to the 401(k). He falls under whatever rules apply to a person covered by a plan and deductions are then bases on MAGI.

Tell them no problem as long as they will prepare the 5330 at no charge and off set any admin fees by any excise tax owed for not getting it done in the 2.5 month window.

If J&S plan buy him an annuity. If not a J&S Plan roll him to an IRA and send him their contact info.

Thoughts? Get paid in advance. After that. Sure prepare 1099-Rs for the actual years the distributions occurred. There may be some late filing fees. Best of luck.

I haven't worked on any FSAs in a long time but I was under the impression they were annual. That said here is some prior discussion but it 14 years old and I don't know if anything substantial has changed since then http://benefitslink.com/boards/index.php/topic/15667-termination-of-fsa/ If the company ceases to exist I would assume it might depend on is there are solvent responsible parties or not as participants might be considered creditors with unsecured claims but I am not an attorney.

Yes you would be top heavy. You could be a safe harbor match with no PS and get the TH exemption. Or you could do a PS contribution but this would blow the TH exemption so you would likely have a 3% minimum PS contribution to comply with TH. You could be a safe harbor 3% with the 3% as a floor that satisfies TH and make a PS that could be on top of that and possibly cross tested. There could be some issues with satisfying TH in some cases like bases contribution on date of entry where TH is on full year. Or you could not do a safe harbor and you might blow the ADP test, refund all deferrals to HCEs and still have a TH minimum that year.