cpc0506

Yes, I mean 12/31/17. (Yes, I know it is May already!)

Bird, Yes, the distribution occurred just last week. We asked the client to get the funds back, but they have already been used. Can you give a cite that all the needs to be done is for the amendment to be signed by 12/31/16?

We have a client that allowed a participant to take a distribution from the plan. Participant is still working but is 65 so client thought they were eligible for a distribution. In-service distributions are not allowed under the current provisions of the plan. The document can be amended to allow in-service at normal retirement age now but this does not help the fact that a distribution occurred that was not permitted under the terms of the AA. Can we do a retro-active amendment to correct this operational failure? If so, does it need to be submitted under EPCRS?

Can the RMD distribution occur before the terminated participant turns 70.5 or do we have to wait until September to distribute the funds?

Profit sharing plan assets are trustee directed and held in a pooled account. Terminated participant requests a distribution of his vested balance. Participant completes application for distribution and sends it directly to the investment house. Investment Company makes full payment to the participant. What is the penalty, if any, to the plan sponsor for the failure to withhold the mandatory 20% tax from a lump sum distribution to a participant?

Employee terminated in 2010. Employee will turn 70.5 in September 2017. Employee contacted us, the TPA, today to initiate a rollover of her account. Since she is not yet 70.5 can she roll her entire account balance or is she subject to an RMD? We cannot agree on the answer. Any guidance you can provide would be helpful.

I was wondering if anyone attending Pensions on Peachtree this past April? I was told that Derrin Watson would be providing a sample form that would satisfy the new IRS guidelines for Hardship distributions. I was hoping to get a copy of the sample notification. Thanks.

Hello, I was wondering if anyone knows of where you can get free CE credits for ASPPA/ERPA requirements besides from the e-tutor series at John Hancock. We were members of Pension Podcast before Cheryl Morgan's untimely death. With the cost of the annual conference being what it is, we are looking for a lower cost/free option that might be available for credits. Thanks.

did they actually allocate 0% to some participants?

Client wants to use the following formula for allocating the match to participants. 0-2 Years of Service - 0% match 3 or more Years of Service - 100% match up to 5% deferrals. Eligibility conditions for match are 1 YOS (1000 hours) semi-annual entry dates. I know that eligibility and allocation are not the same thing, but is this allocation formula an allowable one? In essence they are keeping a participant out of the match for an additional 2 years.

New client to us. Tells us company is a 51/49% partnership with wife/husband. We received draft K-1s for both. K-1 for wife has a dollar amount on line 14a. K-1 for husband (whose K-1 lists him as a limited partner) is showing nothing on line 14a. Has anyone seen this before? It is my contention that the husband does not have compensation for retirement plan purposes. There is nothing on the guaranteed payments line for either partner.

Hello, we have just completed a project whereby we caught up a 403(b) plan for Form 5500 filings. Client did not know they had to file. We ended up filing 10 Form 5500's. Is the client expected to hand out 10 SAR's for these very outdated plan years?

We had what some would consider the perfect storm for a plan of ours. Client is a large plan (over 120 participants.) Plan year ended 9/30/15. An employee of our TPA firm had contacted the auditor regarding the audit for the plan on 4/5/16 to see how the audit was going and if it would be ready for 4/30/16. Auditors asked us to put the plan on extension to 7/15/16. Now, here is where the breakdown begins. The auditor working on the plan was a newbie. She finished the audit and never provided it either to her supervisor or us, the TPA. The employee in our office responsible for the plan and Form 5500 filing terminates employment and has indicated that all plan work is current. Just last week, we are contacted by the client to see why the 9/30/15 Form 5500 was not filed. So, we are now trying to decide to either: 1. File the PYE 9/30/15 Form 5500 under DFVC Program and pay the penalty; or 2. File the PYE 9/30/15 Form 5500 with a letter of reasonable cause and hope that the letter is accepted and no penalty is assessed. Has anyone ever filed with a reasonable cause letter and had success since EFAST came along? And If we file late and it is not accepted, can we then amend and file under DFVC Program or is DFVC no longer on the table. Any guidance you can provide or experiences you have encountered would be greatly appreciated.

We have a new plan that has come to us. It is a one-participant plan (1 owner covered, no other eligible employees). The plan has a real estate investment as part of its assets. I say it is still eligible to file a Form 5500-EZ or one participant Form 5500-SF. A colleague thinks we need to file a Form 5500 with a Schedule I due to real estate investment. Any thoughts?

We have a client who owns an annuity as part of his investment choices. It is held by a Life Insurance Company but all the paperwork, including investment statements and Schedule A information for the company references 'variable annuity.' Prior TPA reported the annuity as a welfare benefit - code 4B on the Form 5500 and had completed a full Form 5500,Schedule A and Schedule I. I am not sure that I agree that this is a life insurance policy. Are annuity contracts considered life insurance for Form 5500 reporting purposes? I consider this fund another investment vehicle, like a mutual fund would be. Can anyone provide some words of wisdom that can help me determine if a full Form 5500 is overkill and all that is really needed for this client is a Form 5500-SF?

Participant A took a hardship and Employer did not stop deferrals as required. I know that the deferrals need to be returned to the participant, but are the deferrals included in the ADP Test?

Holding company owns 100% of Employer A (our client). We find out that Holding Company also owns 60% of an International Company (I will call them Employer I) and 40% of another US Company - Employer B. No issues so far. Do you agree? We now find out that Employer I owns the other 60% of Employer B. I think I now have a control group with another US Company - Employer B. Do you agree?

We just took over a 401(k) plan that we found out had land as part of its assets. Client has provided the county assessed value as a determination of the land value as of 12/31/15. The land is parcel of a mountain. Is assessed value a reasonable value for the land? If not, what should be used to determine the value of the land for plan asset reporting purposes? Thanks for your input in advance.

I did a little more digging and found the following example on the IRS website: https://www.irs.gov/retirement-plans/one-participant-401-k-plans The example of a one participant plan lists a employee, Ben, who received 50,000 in w-2 wages from his S-corp. Is this enough proof that an S-Corp with only owners can file a one-participant Form 5500-SF?

So I might have answered my own question, but is there anyone out in the TPA world who is filing a one-participant Form 5500-SF for an LLC taxed as a S-corp where the only employees are the owners?

I knew I saw something. In the Form 5500 book by Janice Wegesin, she states that the definition of a one participant plan changed effective with 2009 plan years. Here is the following language from the book and the code she cites: PPA 2006 modified the term partner to include an individual who owns more than 2% of an S-corporation. See IRS 1372b or PPA 2006 section 1103(a(E).

I have something nagging at my brain that there was a change with PPA of 2006 that an S-corp with greater than 5% owners could file as a one participant plan.... Does anyone else recall this?

We have a 401(k) plan that until 12/31/14 had employees and owners who were participants. During the 2014 plan year, all non-owner participants terminated and received distributions. So that as of 1/1/2015, the only employees/participants left are the owners (2 owners with 50% ownership each.) Client is an LLC taxed as a S-corp. We filed the a Form 5500-SF for the 2014 plan year. We are now working on the 2015 valuation work and Form 5500. 1. Can we file a one participant Form 5500-SF for 2015? In other words, is plan eligible for an Form 5500-EZ? 2. Plan also had one late deposit of deferral funds. Is a Form 5330 required for a one-participant plan? I know when you file a one-participant Form 5500-SF, you don't answer line 10a. Thanks to all who respond.

Plan does not allow for loans. But if it did, would you allow an employee to take a loan when the likelihood of repayment is slim to none, if employee is unable to work.

Employee A has money in a company 401k plan. Employee A is severely injured in a car accident. Husband of Employee A has power of attorney. Can husband request a hardship distribution from the company 401k plan to pay medical bills using his power of attorney?