Bill Presson

What do you do if someone is in more than one group?

We had several clients that were strictly cash based and would always deduct the contribution in the year deposited even if it was allocated in the prior year.

I've been involved in plans that did it both ways: use an existing plan number and wrap the other plans into that welfare plan and create a new number. I don't think there's a perfect answer either way. For the terminating plans, we just did it as a final form. No explanation needed.

Typically the document will describe the steps. However, it's pretty common for a new plan to have a retroactive effective date to the beginning of the year. That means there is no short limitation year. Is that not the case here?

Think through this and I think you'll be able to get to the right answers. 1. Dr kept the corporation but sold assets. It's really not any different than selling the physical parts. 2. Corporation continues because Dr didn't sell stock. 3. Plans continue because the corporation is still the sponsor. No plan year change. 4. All employees, other than Dr terminated in September. 5. So now you look at the allocation rules for each plan. DB & PS have no last day rule, so continue as normal. 6. You say the 401(k) has a last day rule, but usually that is for the PS component and you also say he has a PS plan. Not sure of what's really going on. But if he has a last day rule, the terminated ees aren't eligible. But if he's getting a contribution, then you fail 410(b). Either fix it according to how the plan requires (if in document) or do an -11g amendment which would allow you to allocate to all the terminated people if desired. Does that help? WCP

Would there be a testing issue if the ER just makes a smaller contribution? Assuming it's top heavy, you'll have to give at least a 6% contribution of the 7/1-12/31 comp anyway. But if everyone is in their own group, just give a lower percentage.

You'll need two 1099s. We typically have processed it as two separate distributions and two fees because of the extra work.

Agree with 1/1/16 assuming the document requires the completion of the 12 months of service before entry. Tom has given an additional example of how it could be earlier.

How can someone work 1000 hours from January 1, 2015 - May 2, 2015, but not work 1000 hours from May 2, 2014 - May 2, 2015??

Not 100% true. Eligibility is NOT a protected benefit. Now MOST of the time employees who enter under the old eligibility are grandfathered when eligibility if made more restrictive for PR purposes but it's not always the case. So in the OP example IF the participant's eligibility was grandfathered then she would be eligible for PS contribution. On the other hand if she was excluded when the eligibility changed she would have to satisfy the new eligibility to once again become a participant and would not be eligible for a PS contribution. That's correct. I wasn't thinking about excluding a division or location, etc.

Once the employee becomes a participant, subsequent changes to the eligibility are irrelevant. So if the 2015 PS requires a 1000 hours and employment on the last day, just ask if she satisfied that requirement. If so, then she is eligible. WCP

1. A controlled group is a single employer. 2. Filing is not dependent on employees; it's dependent on participants.

Brightscope?

I bet the guys that took over the federal facility in Oregon have an attorney that backs their case. But most attorneys probably wouldn't agree with that particular interpretation. I see Zane in the same vein. No extra charge for the rhyme.

Look at this Employee Plan News. I think this addresses the situation specifically. https://www.irs.gov/pub/irs-tege/epn_2012_1.pdf It's under the "We're Glad You Asked #2"

Penchecks is good. I think Millennium Trust will as well.

I know that Alabama does not have state tax on DB pension payments. But I don't have a list, though I remember seeing one a few years ago.

I don't specifically remember NC, but Florida seems to do something in that area every so often.

Wanna share the provider name?

I've had a few people cuss at me; mostly participants wanting me to give them their cash right then. In any case, glad your daughter is okay. ERs are scary for kids.

The example is an employee who elected a dollar amount per pay period. The attorney is saying that an employee who elects a percentage of pay must be stopped at the comp limit as suggested by My 2 Cents. In this case, the document does not limit deferrals beyond the 402(g) limit. If the plan does not limit the compensation to the 401(a)(17) limit for contributions, then the plan should not have stopped until the participants reached the deferral 402(g) limit. So frustrating. And I think the auditors are being silly as well.

I think he can be trustee, but (without looking it up) I thought the real estate had to have an independent custodian. Might be wrong.

Someone will have to be custodian and pay taxes, etc. Probably should use a company like this: http://www.theentrustgroup.com/self-directed-ira-benefits

Many times a 401(k) will be a better choice than a SEP. But it doesn't look like this is one of them. I agree with Belgarath.

Thank you.