Cynchbeast

5500s now ask for a MyPAA confirmation number for plans covered by PBGC. What do you do if the plan is covered but you have no confirmation #? What if you check Not Determined? What if you force it through EFAST - will it accept it?

Thank you CJ. So from your response, am I correct in inferring that they can use one comprehensive audit covering the 6 year period?

We were TPA for a plan that transitioned from small (5500-SF) to large (5500) in 2012. We completed all work for the 5500 and were just waiting for the audit, which was never done. After repeated follow-ups, we eventually resigned. Periodic checking of the EFAST website confirmed that nothing was ever filed on the plan after the 5500-SF for 2011 which we handled. Apparently due to a personnel change, the sponsor has become aware of the missed filings and contacted us. If we bring them into compliance, it would involve a DFVC filing for 2012-2017 (6 years). My question is, does the sponsor have to get 6 separate audits - one for each year - or can he get one comprehensive audit covering the entire 6 year period? And if he can get one comprehensive audit, how does this work on EFAST? Do we attach the same audit reports to each year's filing, or is there some way to override the missing audit and submit it only with the final 2017 report?

In 2014, we obtained an EIN for a DB trust for a prospective client. In the end, they never adopted the plan. They have recently contacted us again to start a DB plan. Can or should we use the EIN we got over 4 years ago or should we apply for a new one?

I heard discussion that the IRS might change determination of plan size based on participants WITH balances rather than all participants. So a 401(k) plan with over 120 participants with less than 100 deferring would still be small. Did this change go through? We have a 401(k) in the restaurant industry so there are nearly 200 participants, but only about 40 have balances.

If a DB plan has already been amended for PPA and is terminating now, prior to the end of the PPA restatement period, and before our document provider has the PPA documents available, does it still need to be restated for PPA?

Another thing occurred to me. Could any changes in the tax laws possibly affect this 60-day rule? And if so might she be screwed?

So we have confirmation that the wife deposited money to her IRA (within the 60 days). With documentation of the IRA deposit: Do we report this as taxable distribution on 1099-R and she then accounts for the IRA somehow in her tax return, or Do we report this as a non-taxable distribution on 1099-R?

Yes to the Death Distribution on 1099-R, but on the form you have to indicate how much of the distribution is taxable. It seems to me the plan has to report it as a taxable distribution, then if she rolls into IRA within the 60 days, she would account for that on her tax return. Am I correct in that, or with proper documentation should the plan report it as non-taxable?

A participant died and his wife wanted to rollover his money to her IRA. We provided Directive instructing plan to make check to Bof A, fbo the wife; we would report that on the 1099-R as a rollover, non-taxable event. When we got copy of the check as evidence of distribution, it was payable to the WIFE. This makes it a fully taxable event (about $14k with nothing withheld). Assuming she puts the money into her BofA IRA within 60 days, how do we report this on the 1099-R? Do we report it as taxable or as a rollover? I have never encountered this before.

We have a 401(k) plan with a participant who died last year. She has a sizeable amount in the plan (over $200k), and as far as the sponsor knows, she had no will and both her husband and daughter predeceased her. They believe she has some adult grandchildren, but so far none has contacted them. I suggested they contact one of the grandchildren to find out the status of her estate. But the question arose as to what we do if no one asks for the money. And also, what happens in a couple years when the participant would have turned 70 1/2 (RMD)? Ideas??

I pretty much told owner the same thing - the IRS is not about being fair. I have another related question on the same issue - please see new posting re failed ADP/ACP tests

I was hoping for something creative, but am afraid you are correct. This is just a unique situation where the employees are deferring at a good rate and the employer is extremely generous with the match - and then gets penalized for making full use of deferrals. It doesn't seem fair, does it. But then when has the IRS been about being fair?

We have a (calendar yr) client who failed the ADP and ACP tests for 2016. Unfortunately, we didn't know until we finally received his census on 10/12/17. It is a small plan with just 6 people; in 2015 the owner deferred a little under 6% and the testing easily passed. He decided to max out deferrals for 2017 and so deferring at almost 14% both his ADP and ACP tests failed. WE are trying to figure out if there is some way around the give-back and forfeiting match. You see the NHCEs deferrals averaged 5.31%, which in our experience is not bad. But the employer matches a straight 25%, which is almost unheard of. His argument is that he is being far more generous than most employers, and yet he is penalized for the failed tests. Can anyone think of a way around this? QNEC is way too high, and yes, we are discussing SH for 2018.

If Adoption Agreement has 3% SH NEC to all participants checked, and no one defers - not HCE or NHCEs, must the sponsor still pay the 3% SH NEC?

We have a plan sponsored by a licensed speech therapist. I am told she has a PhD but is not a medical doctor or psychiatrist. Would this be considered a professional service organization and exempt from PBGC, or would this be subject to PBGC?

Thank you for the responses. To Belgarath - very good points - which I have been pondering. Re contributions, the owner does want to give the contribution to everyone who would otherwise be eligible, so the the fail-safe language won't work. So I think we will have to amend the plan to remove year-end requirement. Re rush - yes, there is sort of a rush in that the owner wants to allow these people to rollover their money right away and be done with it. I am going to re-confirm with owner that above is what he wants because I agree that the easiest thing is to just wait until 12/31 and remove the year-end requirement. We know that it really makes no difference if participants have their money in the old plan or the new, but on the other hand the new plan is a 401(k) where they would have control over the investments (existing plan is pooled PS).

We have a calendar year PS with Y/E requirement for contribution. Owner is selling his (veterinary) practice to another larger company - probably by mid-October; he intends to keep his corporation active and he and his wife will remain on payroll. All other employees will be moving to new company and probably rolling their money into the new company's 401(k) plan. He wants to make a 2017 contribution and has already deposited most of that money. What we want to do is a mid-year valuation in which we allocate Profit Sharing and earnings. This would probably be 09/30/17 or whatever they select as official termination date for participants. I need to determine what documentation we need in order to accomplish this. We need to address partial termination as well as mid-year valuation ignoring year-end employment requirement.

No, I already have a lot of credits. The seminar is on cash balance plans from Datair and it is worth 20 hours - still a great deal. And that puts me at over 72 hours with yet a year to go in my cycle. All I am lacking is 4 hrs ethics, and so plan to still do that.

I just got off phone with an IRS agent in the Enrolled Agent department and I want to check the information I received with other ERPAs. This concerns the requirement that you earn 72 hrs in 3 yr cycle with a minimum of 16 hrs each year (including 2 hrs ethics). She told me that actually there is no 16 hour requirement as long as you get all the credits you need in the 3 years. My current cycle is 04/01/16-04/01/19. So I plan on going to a conference in November that will actually give me over 72 hours credit meaning all I need for 2018-2019 is a few hrs of ethics. This is okay. Does anyone disagree with this? Does anyone have experience to the contrary? And speaking of Ethics, does anyone know a good source for Ethics hours?

Calm down - I didn't mean to start an argument. This is sort of an issue I inherited. What I do know is that the mother has been paid by 1099 and I believe starting this year she will be on W-2. The plan is a DB and the purpose of the joinder is to be able to recognize her past service while on 1099.

If a doctor (an s-corp) has her husband working for her and he appears each year on the census with under 1,000 hours, can we deem him, as her spouse, to have worked over 1,000 hours. This is what our actuary is saying we can do.

Again, these answers seem a bit convoluted, so I will try to distill them to something that makes sense. I think what you are all saying is that the there is no controlled group (no common ownership between 2 companies), so mother could adopt son's plan but this would then constitute a multiple employer plan. We have no experience with multiple employer plans. The son has no employees, nor does the mother. They just are two separate employers. If we allow mother to adopt son's plan and then have a multiple employer plan, how would the administration of the plan differ from just a single employer plan? Can someone steer me toward a good source?

You lost me with all the mother, son, his plan, her plan. I am not sure you understood or what you are saying, so let me restate it. John owns company and sponsors retirement plan. John's mother Mary does his bookkeeping but gets no W-2; she is paid 1099. Can Mary as a sole-prop execute a joinder agreement and adopt John's plan?

We have the son who owns his business and has a new qualified retirement plan. His mother does his bookkeeping and he wants to include her in plan. She works on 1099 and they want to have her join plan as a sole proprietor adopting employer by means of a joinder agreement. She has no EIN for her business, but files under her own SSN. He is in import/export business, she does bookkeeping. Is this allowable?