cpc0506

I have sent this question to our document provider and am waiting for their reply.

I think you need to read my second question first to see where I am having an issue.

New plan is effective 1/1/2014 with a special elective date of 10/1/2014 for deferral and safe harbor provision (3% non-elective.) Definition of compensation includes compensation which NOT a participant. What compensation is used to determine the 3% safe harbor contribution? Is it the compensation as of the effective date of the safe harbor provisions or full year? Take that question one step further, an employee is eligible for this plan 1/1/2014 (met service and age requirements prior to the start of the plan), but this employee terminated employment 6/1/2014 (prior to the effective date of the safe harbor provisions.) Is the client required to give this terminated participant a safe harbor contribution?

We am looking at a Relius Adoption Agreement. There was an age waiver if you are employed on 9/30/2014. I am looking for some clarification. The client has a 17 year old employee who have not yet satisfied the service requirement of 1 year of service but was employed on 9/30/14. He will have 1 year of service as of 12/31/2014. Does he enter the plan on 1/1/2015? In order words, does the age waiver stay with the employee until he has met the service requirement. Thanks.

Plan A has over 200 employees, plan B about 20, and plan C over 200 employees as well. So, we will need to pass coverage for the 2 plans if we use 9/30 but would need to pass coverage for the originial 3 plans if we merge on 10/1.

Employer X and Employer Y are a controlled group. Employer Y is 100% owned by Employer X. Plan A and Plan B are sponsored by Employer X. Plan A covers one division of employees and Plan B covers another division of employees. Plan C is sponsored by Employer Y. All three plans are currently able to pass coverage on their own and as such are tested separately. Currently, Employer X wants to merge Plan B with Plan C. Plan year end is September 30, 2014. What are the pros/cons of merging Plan B into Plan C on 9/30 versus 10/1?

Can a non-profit sponsor both a 403b and a 401k plan at the same time? If so, what are the advantages to having two plans?

I do agree with what you are saying. But please clarify one thing for me. The prior TPA was only including the '401k value' of the Simple Accounts on the Form 5500. If we ask each partciipant to make a full rollover to the plan from the Simple Account, we will need to show Simple Portion as a rollover into the plan and recordkeep those assets separately as you generally do when you have rollover money come into the plan.

No the issue is that part of the Simple Account balances are being recordkept as 401(k) assets since that was where the earlier 401(k) moneys were going.

Hello. I am looking for some guidance here. We have been hired by a small dentist office that established a 401(k) plan as of 1/1/2003. Prior to that time, the client sponsored a simple IRA. During the set up of the plan on your systems, we attempt to reconcile the assets at the investment house (in this case, strategic alliance) to the Form 5500 for the beginning of the plan year for which we have been hired. For this client there was a signifciant difference (besides the usual year end adjustments, eg receivable, etc.) When I approached the prior TPA, they informed me that from 1/1/2003 until 12/31/2006, the cleint was depositing the 401(k) and employer contirbutions into the Simple IRA investment accounts and that they did not establish a dedicated 401(k) account with the strategic alliance until 1/1/2007. When I asked the prior TPA about this, they indicated that they knew that the deposits should NOT have been made into the Simple IRA accounts but never tried to fix it. Here is it now 13 years since that first incorrect transaction. How can this be fixed? On the face of it, when looking at SIMPLE investment statements it looks at if the SIMPLE plan continued to be funded between 2003 and 2006. And there is no record that a 401(k) account received monies during this same time period. Has anyone ever encountered this before? What recommendation would you make to the client other than to hire an ERISA attorney?

I thought IRS Revnue Ruling 2011-7 provided that section 403b plan could be terminated so long as specific provisions were followed.

Non-ERISA because it is a salary deferral only arrangement and employer has a limited role....

Prospective client has a current NON-ERISA 403b plan. He wants to establish a 401(k) plan. Current non-ERISA 403b plan has loans. 1. Can the cleint adopt a 401(k) plan while sponsoring a non-ERISA 403b plan? 2. Am I correct that the client cannot merge the non-ERISA 403b plan into the 401(k) plan? 3. If client terminates the non-ERISA plan does it need to wait 12 months to establish the 401(k) plan? 4. If the 403b plan is terminated, can employees roll the 403b assets, including loans, into the 401(k) plan? Thank for any guidance you can provide.

Employer owns 3 companies. Controlled group situation exists. Each company has its own plan. Plan A, Plan B and Plan C. Client does not want to aggregate all the plans and wishes to test each plan separately. I understand that if each plan passes coverage on its own, we can do separate ADP/ACP testing. My question is: Is this an all or nothing situation? EIther each plan passes coverage separately or they are combined as 1, coverage is run and then other compliance tests follow OR can you combine Plan A and B, and if this combined plan passes coverage and Plan C passes coverage, you can then run your compliance testing separately for Combined Plan A&B and Plan C? I hope I am making some sense here.

We have a client who established a ROBS. Plan owns the company's stock. Client would like to terminate the plan but does not want to sell the stock as the client still wants to own the business. How can this be accomplished? Has anyone encountered this problem before?

Under the new MEP provisions, each plan would need its own Form 5500.

Client contacts us today and says "I bought two more companies at the beginning of the year." He also told the employees they would be eligible to join the client's plan on next available entry date. The plan is a safe harbor plan. The new companies are wholly-owned by client, so a controlled group exists. Can we add partcipating employer agreements to current safe harbor plan? Can we make them effective as of the date of purchase?

I agree that they should have been transferred to the plan..... if the plan was even allowed to be established. I am not sure if that is even the case.

I have learned that all the funds of Employer B that were in Plan A have been rolled to Plan B. At least there have been no distributions per say. I am not sure why Plan A was not taken over by Employer B and just renamed. Many questions, no answers....

Hello. I need some help here. Employer A had a 401(k) Plan (Plan A). A control group existed between Employer A and Employer B. Employer B completes a participating employer agreement to parcipate in Employer A's plan. Employer A ceases to exist and terminates the Employer A 401(k) plan as of 12/31/13. Plan A distributed the funds to all employees of both employers. Employer B establishes a new plan (Plan B) as of 1/1/14. Does this constitute a successor plan? Also, some of employees of Employer B have rolled their distributions from Plan A to Plan B. Is the rollover money considered a related rollover or not?

what about PPA for a participant directed Profit Sharing Plan? Again one partcipant plan?

I have a new one partcipant plan (owner and spouse only). The final regulations confirmed that so-called “one participant plans” are not subject to Section 408(b)(2). Does that mean they are not subject to 404(a)(5) fee disclosure as well? What about PPA periodic notice requirement?

First, we currently use Relius for our documents and yes, we as the document provider, did adopt all interim amendments on behalf of all our clients. And we have a copy of the amendment signed by our owner. However, the investment firm informed us, after numerous questions, that they never signed any interim amendments at the plan sponosr level on behalf of their clients and when they drafted the adoption agreements and provided the packet to their clients, the 415, HEART and WRERA admendments all drafted to require an Employer signature. And they never even provided the PPA amendment.

Hello. We just took over the document responsibility for over 120 clients of an investment firm. The investment firm was the document provider using an Relius Standardized Prototype In review of the EGTRRA restatements done by the investment house, there are very few Final 415, HEART, WRERA amendments and no PPA amendments in the files. The Investment Firm indicated that they did not adopt any amendments on behalf of their clients, but each were to sign the amendment. Needless to say that did not always happen. So, we are in the process os submitting all of the plans of the clients of the investment firm under VCP using a Group Submission. Has anyone done this lately? If so, can you provide an estimate of the time the process took and what you might have charged for the submission work? As part of the submission you are required to notify all plan sponsors who adopted the plans, that the plans are being submitted to VCP. Does anyone have a sample letter that they have used to inform the plan sponsors of the Group Submission. Thanks for any guidance you can provide.

Maybe, I was thinking of something else. is there an issue if you have a failed ADP Test that returns salary deferral contributions, these are counted towards the 415 limit and you can't give extra profit sharing to make up for the return?