ERISA13

If a company establishes a SIMPLE IRA plan by the October 1st deadline for 2016, does that mean they would have needed to distribute the initial 60-day election period notice by August 1st?

Have any of you non-producing (non-licensed) TPAs successfully counted your experience in order to meet the 3 year experience requirement for the CFP designation? I have met the education requirement to sit for the CFP exam but do not want to waste time taking it if my experience will not count.

Thanks for the reply Lou! So in my example above, there would not be any attribution to the spouses for CG purposes since neither spouse has direct ownership? But if the ownership for Owner 1 and his spouse had been: Company A Owner 1 40% Owner 1 Spouse 20% Then, after attribution, Owner 1 would own 60% (his 40% + wife 20%) and the wife would also be deemed to own 60% (her 20% + husband 40%) for CG purposes. Is that correct?

I’m trying to get a better understanding of controlled groups. This should be a straightforward situation that I think I’ve made too complicated and confused myself. I’m trying to determine if a controlled group exists in the following situation: Company A Company B Owner 1 50% 33.33% Owner 2 50% 33.33% Owner 3 0% 33.33% -Owner 1 spouse is an employee of Company A -Owner 2 spouse is an employee of Company A -Not a community property state Based on the amounts above, the common control in Company B is less than 80% (66.66%) so no controlled group. But I’m getting confused on the attribution (if any) to the spouses. I know the spousal non-involvement exception does not apply since they are employees so would the calculation look like this? Company A Company B Owner 1 50% 33.33% Owner 2 50% 33.33% Owner 3 0% 33.33% Owner 1 Spouse 50% 33.33% Owner 2 Spouse 50% 33.33% If so, would common control in A now be 200% and 133.33% in B resulting in a controlled group?

Thanks guys! Congrats to you as well BG5150! So what's next after the CPC?

I just received my results today and I also PASSED! That was a very long eleven weeks exactly of waiting to find out the results. Now I'll get to add a few more letters after my name that nobody I work with understands

Thanks for the responses! Glad to hear the favorable experiences you all have had with FT William. I have not been able to find any reason to stay with Relius so I think we are going to join the FT William family as well. We were also concerned with losing the historical data that we have in Relius but it is my understanding that since we have our own Relius server and don't use the ASP online version we will still be able to access our prior year information in Relius. Can anyone confirm that?

I found this thread while searching for posts on FT William software and was just wondering if anyone has regretted switching from Relius to FT William. We currently have our adm, docs & 5500 software with Relius and are considering changing it all to FT William. So far we cannot see any negatives to making this change. For those of you who have made this change, are you glad you did it?

For small plans, are salary deferrals considered timely deposited as long as they are deposited to the plan within the 7 day safe harbor deadline or do the deferrals have to be allocated to the participants by the deadline? For example, for an employer who has weekly payrolls, would they be in compliance by depositing the employee deferrals into a pooled plan account each week and then allocating the deferral amounts to participants monthly, quarterly, etc.?

A small 401k plan is not sure if all the Form 5500 filings are up to date. I searched for filings on the EFAST2 website with no results. I then searched FreeErisa.com and the latest filing I found was 2001 & 2002. The Plan Sponsor does not have copies or any returns for me to look at and they were using bundled TPA services with a provider that is no longer in the business. I feel pretty confident now that 2002 was the last filing but is there a way I could be more sure since I guess the tax id could have been incorrectly entered preventing my search from locating the filings? It is my understanding that DFVCP is available for all missed filings as long as there have not been any notifications of late filings from the DOL/IRS & accordig to the Plan Sponsor there has not been. Anyone have experience correcting 10 years of late 5500s and if so any advice?

Austin - Thanks for your response! On your reply to my #2, our firm does not charge any distribution fees to the Plan. The only distribution fees that would be charged to the plan would be charged by American Funds, Hartford, etc. so wouldn't they be the one to include that in their disclosure? If the client later wanted to pay their bill using the forfeiture account would it still be a PT if we provided a 408b2 disclosure prior to the bill being paid from the forfeiture account? I agree that providing the most disclosure is the safest route but at this point I'm just trying to understand exactly what is "required" since I'm only 2 weeks away from showtime. Thanks again!

I've read through the previous posts on this thread and wanted to see if I am understanding our situation correctly......any guidance is appreciated! We are a CPA firm that provides TPA services for a few plans. For the majority of our plans, the Plan Sponsor pays all plan related fees so we do not get paid from plan assets. We do have a few plans (with American Funds, Hartford, etc.) that we receive revenue sharing payments for which I understand makes us a Category 3 CSP for those plans. It is my understanding that: 1. For the plans we provide TPA services for where the Plan Sponsor pays our fees directly with no fees being paid from plan assets, we have no required 408b2 disclosures to make. 2. For the plans we receive revenue sharing payments on, we will only be required to disclose the revenue sharing payment information since all other fees are paid directly by the Plan Sponsor. Am I understanding things the same as you? Thanks!!

Thanks for the response Hiatus. Anyone else run into this situation before?

I took the ERPA exams and found they were much easier than I expected. I've been working with retirement plans for about 4 years but immediately started working on ASPPA designations when I got into the business. I had already passed all the ASPPA exams needed for the QKA and QPA before taking the ERPA. I just printed out the ERPA exam outlines that listed what would be tested and then reviewd those topics in the ASPPA textbooks I already had. That worked for me. In fact, after taking and passing the ERPA exams I was suprised that ASPPA automaticaly awards an ERPA with a QPA designation because in my opinion the DC-3 and DB exams required for the QPA are much more difficult than the ERPA exams. Good luck!

We have a client in an Affiliated Service Group (A-org). The A-org sponsors a SEP IRA that covers the 2 employees of the A-org and the FSO sponsors a traditional 401K (ADP test) that covers the 50 employees of the FSO. Thanks to Derrin Watson's Who's the Employer, I believe I understand correctly that members of an Affiliated Service Group can sponsor different plans with different levels of benefits as long as they can pass covergae testing separately (but must include employees of all ASG members in testing). But how would this work when there is a SEP and 401K? Does a SEP even test coverage or is it just required that any employee of all employers in ASG that meet the SEP's eligibility requirements receive a SEP contribution? Can you aggregate a SEP and 401K for coverage or nondiscrimination testing? If so, how would that work? I don't work with SEP's or Affiliated Service Group very often so I appreciate any guidance you can give.

A business owner sponsors a 401K plan for his employees in which he participates. He also has some income he receives as self-employed income. Could he make a SEP contribution from the self-employed income? If so, are contributions allocated to him in the 401K plan aggregated with the SEP contributions in determining his maximum 415 annual additions limit?

The plan did not have a Fidelity bond in place.

A company maintains a Profit Sharing plan and has two co-owners (A & B). Co-owner B has 2 sons that also works at the company. Co-owner A steals a large portion of the plan assets and disappears. There is now a judgement against the plan requring the plan to make the affected participants whole. There is enough money remaining in the plan to make all the employees whole but co-owner B and his 2 sons want to just forfeit their account balances rather than the company having to replace those balances in the plan. My questions are: 1. Is this even possible for the company to not replace the portion of the plan assets that belong to co-owner B and his 2 sons? 2. If they forfeit their account balances do we show it as a distribution? Do they have to get 1099's? This is not a situation I've come across before and am looking for some ideas on how to handle. I appreciate any suggestions!

I also work in the TPA division of a CPA firm and have been considering ways to boost my TPA income. Before getting in the TPA world I was a Series 7 licensed broker. My licenses also expired and I could not find a way to keep them active where I work now since they are not a broker/dealer. It is my understanding to hold an active Series 7 license you have to be sponsored by a broker/dealer and be using the majority of your time working in the area of investment sales. I do believe there are TPA firms who also have licensed reps who handle the TPA duties as well as manage the assets so you might be able to go to a place like that and do both. Not being licensed can be an advantage as a TPA since other brokers will not feel threatened that you might try to replace them in addition to being the TPA. It would be nice if TPA's compensation was more. I feel most are underpaid for the work they do and I'm not sure what the best "next career" move for a TPA would be to get a higher income.

I came across online where setting up a SEP IRA for your nanny is possible and almost seems a little common. Anyone ever set up a 401K plan for a nanny in order to have a vesting schedule? The nanny would be the only participant. Any info on this is greatly appreciated.

We have a plan where once a participant maxed out their deferrals last year they increased their loan repayments. My question is how should the extra loan repayment be applied to the outstanding loan balance. My thought is that the extra should all be applied to principal but the plan provider applied the overage to the next payment so it went to the next payment's interest and principal. The way they did it they show the loan payments are caught up thru late 2012. I have checked the plan document (document, adopiton agreement, loan policy and SPD) and cannot find where it addresses how extra repayments should be treated. The plan is a prototype plan and we use Relius Documents. If the extra should be paid all on the principal then this would definitely get the loan paid off much sooner so I want to make sure we apply this correctly. Can anyone help me out with this? Thanks!

Thanks for the responses. I went ahead and took (and passed) both ERPA exams last week and I agree that the ERPA was easier. It seemed to me the ERPA exams were more comprehensive but only required a basic understanding of the concepts where as the DC-3 and DB exams for the QPA were much more focused on specific topics and required a more advanced level of knowledge.

Besides the plan document is there another source that lists out what a 401K / Profit Sharing Plan is allowed to invest in? I've been asked a lot lately about participants being able to invest in everything from gold to buying a farm inside a 401K plan. The plan document does not seem to be very specific in identifying what types of investments are permissable. I know the annual valuation requirement can cause some problems for some types of investments but is there anything published by the IRS or DOL that discusses what types of investments are generally allowed/disallowed in a 401K plan? Thanks!!

I've just completed the ASPPA DC-3 and DB exams and was considering taking the ERPA exams the first of the year. I was wondering how the ERPA exams compare to the ASPPA exams as far as difficulty. I know ASPPA views these two designations comparable to each other but wanted to see if anyone who has taken the exams recently could give their 2 cents. Thanks!

With a Safe Harbor 401K plan it is my understanding that the elective deferral and safe harbor money sources cannot be accessed in an in-service distribution until the participant has reached age 59 1/2. The Adoption Agreement of the Prototype plan document we use allows you to select the money sources from a list that will be available for distribution but there is a note that states the following: Distributions from a Participant's Elective Deferral Account, Qualified Matching Contribution Account and Qualified Nonelective Contribution Account (including 401(k) safe harbor contributions) are subject to restrictions and generally may not be distributed prior to age 59 1/2. Are these sources unavailable to the participant until age 59 1/2? The "note" above states "generally" cannot be distributed. Is there any circumstances they can be distributed? Also, what would happen if a participant / trustee decided to take an in-service distribution from all sources including the Elective Deferral and Safe Harbor money source before they were 59 1/2? I really appreciate any clarification on this!!