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Lou S.

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  1. Like
    Lou S. reacted to Bill Presson in correcting coverage failure   
    Also depends on what your document says about how to correct the failure. Some give specific instructions and some are silent. You should prefer the document be silent. That way you have all the options available. 
  2. Like
    Lou S. reacted to TPApril in 0% prior yr NHCE ADP   
    So there were no 401(k) (or other) contributions during the plan year.
    ADP test is based on prior year NHCE ADP.
    Since 2 x 0% = 0, no 401(k) is allowed for HCE in the next year.
    I just haven't had that happen before, but I believe the options are as follows:
    HCE's over 50 are actually limited to the catchup amount, rather than 0's. Prior to end of the plan year switch to current year testing
  3. Like
    Lou S. reacted to david rigby in Employee thought they were participating... for 3 years   
    Be mindful of precedent setting.
  4. Like
    Lou S. reacted to justanotheradmin in Employee thought they were participating... for 3 years   
    So the employee thought they had turned in a deferral election? but didn't?
    It doesn't sound like a plan error. 
    It sounds like the employer needs to decide if they want to do something to make the employee happy. Perhaps give them a bonus and they can turn in a deferral election now to defer most of the bonus. For morale purposes. But not because the plan needs correction. 
    I don't see how a QNEC would be appropriate since there is nothing on the plan side to fix. 
  5. Like
    Lou S. got a reaction from acm_acm in Safe Harbor Match by Payroll - failing compensation ratio test   
    Corrective -11(g) amendment to include commissions for NHCEs with a true up match calculation? That seems to be one way to handle it, there are probably others.
  6. Like
    Lou S. got a reaction from Luke Bailey in Safe Harbor Match by Payroll - failing compensation ratio test   
    Corrective -11(g) amendment to include commissions for NHCEs with a true up match calculation? That seems to be one way to handle it, there are probably others.
  7. Like
    Lou S. got a reaction from Bri in Safe Harbor Match by Payroll - failing compensation ratio test   
    Corrective -11(g) amendment to include commissions for NHCEs with a true up match calculation? That seems to be one way to handle it, there are probably others.
  8. Like
    Lou S. got a reaction from CuseFan in overfunded match contributions   
    If they were all NHCEs you can probably self correct by retroactive amendment to conform the document to the actual match contributed for the Plan year if they all got more than the match formula even if it's not uniform since with will clearly be non discriminatory if the extra natch only when to NHCEs.
  9. Like
    Lou S. got a reaction from Luke Bailey in 412e3 - RMD   
    I don't work on them. But since they are a type of DB Plan I would assume they would have to satisfy the RMD rules just like any other DB plan would. One way, presumably would be to start annuity payments under the normal form or optional form with spousal consent.
  10. Like
    Lou S. got a reaction from Bill Presson in QACA 2-6 year graded vesting   
    The QACA employer safe harbor contributions have to vest over no more than 2 years, but it can be 2 year cliff if I recall correctly.
    as Belgarath points out other employer contributions such as a profit sharing contribution could use a different schedule such as 2/20 if provide in the document.
    God bless the job security of piece meal retirement legislation that brings us multiple different vesting rules for different types of plans and sources or money.
  11. Like
    Lou S. got a reaction from Luke Bailey in Single Life DB Plan and Estate Planning   
    If the participant dies before and election of payment, see the Plan document for payment to the beneficiary.
    If the beneficiary dies before the election of payment to the participant, the Participant's contingent beneficiary would be entitled to the death benefit.
    Assuming the participant and beneficiary are going to waive the annuity benefit and roll to IRA than assets in excess of the 415 limit will revert to the Plan Sponsor and be subject to any excise tax on reversion.
    If you are looking for ways to reduce the excess tax and the participant and/or beneficiary are in good health they could consider purchasing and annuity which might eat up some or all of the excess but that won't leave assets for other heirs if that's a consideration.  Or they could look into merging with a company with an underfunded DB Plan and negotiate the excess assets as part of the transaction, not my area of expertise but I do know it can be done and there are some companies who specialize in that field.
  12. Like
    Lou S. got a reaction from Luke Bailey in QACA 2-6 year graded vesting   
    The QACA employer safe harbor contributions have to vest over no more than 2 years, but it can be 2 year cliff if I recall correctly.
    as Belgarath points out other employer contributions such as a profit sharing contribution could use a different schedule such as 2/20 if provide in the document.
    God bless the job security of piece meal retirement legislation that brings us multiple different vesting rules for different types of plans and sources or money.
  13. Like
    Lou S. got a reaction from Luke Bailey in overfunded match contributions   
    If they were all NHCEs you can probably self correct by retroactive amendment to conform the document to the actual match contributed for the Plan year if they all got more than the match formula even if it's not uniform since with will clearly be non discriminatory if the extra natch only when to NHCEs.
  14. Like
    Lou S. reacted to Belgarath in QACA 2-6 year graded vesting   
    The QACA safe harbor contributions themselves cannot use 6-year graded vesting. But, there could be other employer contributions such as profit sharing that could use that vesting schedule.
  15. Like
    Lou S. got a reaction from Bri in overfunded match contributions   
    If they were all NHCEs you can probably self correct by retroactive amendment to conform the document to the actual match contributed for the Plan year if they all got more than the match formula even if it's not uniform since with will clearly be non discriminatory if the extra natch only when to NHCEs.
  16. Like
    Lou S. reacted to C. B. Zeller in gateway test when def/SH & PS have diff elig requirements   
    Yes. Safe harbor non-elective is considered to be the same as profit sharing for 410(b) and 401(a)(4) purposes.
  17. Like
    Lou S. reacted to Bri in gateway test when def/SH & PS have diff elig requirements   
    (and hopefully the plan's document "guarantees gateway" as needed for those with only the SH allocation prescribed)
  18. Like
    Lou S. got a reaction from Bill Presson in overfunded match contributions   
    If they were all NHCEs you can probably self correct by retroactive amendment to conform the document to the actual match contributed for the Plan year if they all got more than the match formula even if it's not uniform since with will clearly be non discriminatory if the extra natch only when to NHCEs.
  19. Like
    Lou S. reacted to Tom Veal in notifying PBGC   
    If the plan has reached the point of filing a Standard Termination Notice, you must inform the PBGC that the enrolled actuary's certification of sufficiency (Schedule EA-S) is no longer valid.  The plan sponsor should then initiate a distress termination by issuing a new Notice of Intent to Terminate to participants and to the PBGC (which is a recipient of NOIT's in distress terminations but not in standard terminations).
    If the Standard Termination Notice hasn't yet been filed, the PBGC doesn't yet know "officially" about the termination.  A distress termination NOIT should be issued.
    It goes without saying that you should apprise the PBGC personnel with whom you have been communicating about the client's altered circumstances.
  20. Like
    Lou S. got a reaction from Luke Bailey in notifying PBGC   
    I believe you are required to File Form 10 to notify the PBGC within 30 days unless an exception applies. Filing a distress termination with the PBGC may qualify as notice, I haven't looked. But one way or another, you are going to have to involve the PBGC to terminate the Plan.
     
  21. Like
    Lou S. reacted to david rigby in Single Life DB Plan and Estate Planning   
    Or they could consider terminating the plan now and creating a Qualified Replacement Plan.  It might not eat up all of the excess, but it could shelter some of it from the 50% reversion tax. The enrolled actuary can make the calculations to determine if this is worthwhile, which includes a reasonable estimate of how the 415 limit might increase.
  22. Like
    Lou S. reacted to CuseFan in 401(k) 12 Month Rule   
    Not necessarily. Did plan have provision to allow in-service at 59.5? Even so, the plan still was terminated and that is the event triggering the successor plan rules. Starting a new plan would not be w/o risk, so I would proceed forewarned.
  23. Like
    Lou S. got a reaction from Luke Bailey in Spousal Rights   
    I believe that is called fraud if someone else signed on behalf of the wife prior to the divorce.
    As to the rights of the wife following the divorce, that should be address by the Qualified Domestic Relations Order (QDRO) that should be prepared and agreed to durring the divorce proceedings.
  24. Like
    Lou S. got a reaction from Luke Bailey in IRA $$ Stolen   
    A good CPA or maybe even a tax attorney would be a wise move.
    She could probably take legal action against her son but I'm guessing the odds of recovery on that front are quite small.
  25. Like
    Lou S. reacted to Peter Gulia in Spousal Rights   
    The wife might want her lawyer’s advice about whether to pursue remedies more immediate than merely seeking an ordinary domestic-relations order.
    Consider also that, beyond delay in getting a DRO, such an order might have limited or no effect regarding an ERISA-governed retirement plan if the participant’s account was distributed before the plan’s administrator receives the order.
    This is not advice to anyone.
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