Bill Presson

I've never seen this done, but I can't imagine where you could get a cite to support it.

Kind of, but I'm just thinking out loud. In operation, I don't see the employer contribution to the plan being compensation. It's obviously not subject to federal or state taxes and, in this case not subject to FICA or medicare. So, my vote is not, it's not compensation, while the $200 bonus is AND the $50 additional spend on the premium is if the election in compensation definition include Section 125 comp.

I would think for a C or S corp that not getting a paycheck would at least be a good indication although we all know of owners that work with out taking paychecks from time to time. For a sole proprieto/LLC, etc, I would think it would be a bit more difficult because of the earned income. This would definitely be a facts and circumstances situation that would need to be documented.

Is this done through a formal cafeteria plan or any other document?

If it's a small plan, I would just smile and continue to use the 7 day safe harbor time frame. The auditor can pound sand.

I would do the calculation, which will probably be small, and calculate the penalty, which will also be small, and deposit both amounts to the plan as a self correction. Also make sure that the corporation DOESN'T deduct the interest or penalty. Doesn't meet the letter of the law, but, again, that's what I would do. Not enough info to know, but if the owner's income is $120k or less, this method allows them to mostly max out the 415 limit.

Thanks George. I had missed that part allowing the employee to be covered under another employer's group plan.

Isn't a stand alone MERP not allowed now if it's not integrated with an employer group health plan?

Agree with Flyboyjohn. The DOL has previously said they didn't intend to provide a safe harbor for large employers but if they did it would be significantly shorter than 7 days. I've also argued with individual investigators that have said any plan with more than 2 days difference from the shortest to the longest deposit day would have the longer times deemed late.

I'm curious about this part of your post. If the US Company is the sponsor of the plan, are you saying the company should not be named the Plan Administrator? If so, why?

Shouldn't this thread be in a different section??

We don't map either for our in house plans. We require all employees to make new elections. If they don't make new elections, they go into the default fund selected by our investment committee. This all reminds me of an employee meeting last fall. I was just sitting in to answer some technical plan questions and the investment people were speaking. One of the participants said "what I want you to do is choose an investment for me and if it goes up, keep it. If it goes down, sell it before that happens."

I'm not an attorney. But given the facts that you were a partner and you admit that you threw away the notice, I would toss your claim as fast as I could. And I would make you pay everyone's costs just for being a pain.

The answer I got back from Ft. William is: "The plan needs to be amended. Then, you would select an hours equivalency in Questions D.2a/b, D.14a/b and E.2a/b. In the second question for each, you can apply only to people who do not have specific hours." Maybe this will help those with other document providers. This would allow continuing to count actual hours for those that work hourly and apply equivalencies to the few that have to have it.

Monica, can't find it now, but I'm pretty sure the driver would be credited with hours on an equivalency basis (1 day = 10 hours, etc). Not sure if it's a document issue or a regulation issue, but that's my recollection. If I get a chance, I'll try to find something definitive before tomorrow.

George, what part are you saying you haven't heard/seen? That premiums are now charged by age? How does the concept of the premium reimbursement presented in the Zane link coordinate with the IRS Notice 2013-54? http://www.irs.gov/pub/irs-drop/n-13-54.pdf

Interesting. I have not heard of them, but will be curious if anyone else runs across this.

No. I'm just trying to wrap my head around being employed 365+ days and not qualifying.

So, if I'm in the plan in 2013 and I work all of 2014 AND work 10 days into 2015, I still don't get the full match?

I agree with Flyboyjohn. Our accounting firm parent looked into this and we couldn't see a way to make money doing it unless we were doing the payroll.

Isn't that the whole point of this board?

We've had lots of employers in this situation with perhaps one difference. Most of them have had a POP cafeteria plan that allowed the employees premium to be pre tax when it was part of the group plan. When they move to the exchange individual coverage, there's no way to do it pre tax or reimburse it pre tax (as @flyboyjohn points out), so the cost differential may be bigger for our clients.

Now y'all are just splitting hairs.

The document likely allows employees that have not yet reached the eligibility requirements for contributions to be allowed to do a rollover. Almost all the plans we work with allow this, so it's very common. Unfortunately, almost none of our plans allow loans, so I can't help with that part.

Here's what is generating this. I got a question about it yesterday, so I had to spend some time last night reading up. http://www.irs.gov/pub/irs-drop/n-14-54.pdf This notice allows participants to split a distribution between a regular IRA and a Roth IRA. That will allow after tax money to be rolled to an IRA. Here's an article from Forbes (there are others touting the same thing). http://www.forbes.com/sites/ashleaebeling/2014/09/19/irs-issues-401k-after-tax-rollover-rules/ The ACP testing issues are still a big problem. But for a small plan or even a solo 401(k), looks like it might be an option.