rcline46

Others may disagree, but I would treat this as self-employment income and NOT add it back to his W-2 income. Of course he will have problems with the Schedule C, but so what?

Did he receive the 1099 from the SAME employer? And why a 1099? The answers will affect what is included in 'income' for the person.

No. Discretionary amendments must be done prior to end of year.

This is an ERISA plan, so make sure ALL the tenants of ERISA are followed.

Why not just 'termination'?

Would there HAVE to be a short year (if calendar) for all purposes? Because the plan could only be effective for 3 months?

Hmm, did he have a TEFRA 242(b) election in place? That would make a big difference

I have a governmental entity (housing authority) with a pre-ERISA money purchase plan - established in 1968. The plan has Mandatory contributions, employer contributions, and provisions for matching and voluntary contributions. The client would like to add elective (401(k)) deferrals to the plan. I see two options for them: 1. add elective deferrals to the plan since it is a pre-ERISA plan; or 2. Convert to a profit sharing plan and then add the 401(k). Any thoughts or preferences?

Also, remember that guaranteed payments are NOT the partner's income and are irrelevant. Must use K-1 income, as adjusted, for earned income.

You are looking at the 'out' statement. Why not use the 'in' statement from her IRA?

The document should say if the match is computed on a per payroll, monthly, quarterly, or annual basis. Once you have that, then you have your answer.

All members of a controlled group are treated as one (single) employer and if not in a multiple employer plan, are not subject to the rules. Therefore my conclusion is that it is STILL a single employer for the new reporting. In your example, XYZ is a related employer, just not part of the controlled group (and maybe an ASG), and so XYZ is the company making it a multiple employer plan, and so only ABC and XYZ need to be reported. So goes the interpretation we will be using.

This feeble mind has forgotten already. If monthly benefits are being provided due to the 430 restrictions prohibiting a lump sum, may the monthly benefits still be rolled into an IRA based on the concept that a lump sum distribution was requested?

If the plan is a 'maybe' or 'contingent' plan, then it is NOT a Safe Harbor plan until the notice or even maybe the actual amendment is done in December. If it is not a safe harbor plan, then I see no problem with ANY amendment until the special safe harbor amendment is executed.

if it is a discretionary match you can stop at will. If it is a stated match in the document, you must amend the document.

I would tell the client that such a provision involves a major change to the document and MUST be submitted to the IRS for approval, and the fees for doing such, especially the quarter ending on the plan year end. However, what says your quarters have to match up to plan year quarters, so that this is not an issue?

Is it possible that the 'new' LLC could be consider a successor employer? If so, then here CANNOT be a termination of the current plans and starting of a new DC plan as proposed.

I am even MORE confused. How were deferrals even taken from non-US sourced income as stated in Post #5? This is the fundamental question, and these deferrals (the ones in question I think). We can discuss correction methods after we know how the error happened.

Ooooooooooooooooooohhhhhhhhhhhhhhhh lots of questions to be answered! First for DC plans (you posted into General). Does doc say allocation in year of Death (disability and retirement)? Then they get a normal allocation. Without some special trigger, I would think not. In a DB plan, only the 1000 hour rule counts, unless of course you have D-D-R option in place, and then they get a normal accrual. Like they say, when in doubt, read the worlds greatest insomnia cure - the document.

If the participant does not know they have $ coming then the employer is probably not doing enough to educate the participants. The employer MUST have a forwarding address to furnish the W-2 at year end, so the problem of locating the former employee should not be that hard. Just get a forwarding address when they leave. Get friendly with the local consulate, and 'make it their problem' that their subjects are not getting their due.

PVAB is not relevant in calculating the RMD from a defined benefit plan unless the participant is taking a lump sum of their benefit. RMD now must be on an annuity basis. you and/or your actuary may need to review 1.416 again.

Jim Holland resolved this back in 2001. Forfeitures do not have a source. whomever has been reallocating to the source (unless the document says to do it) has been incorrect, and messing you up.

No, I have seen documents where the entry date is "first payroll period that begins on or after the first day of the plan year quarter". I know of NO system where you can program it to work, but there it is. However, I am crabby enough the if entry is 1st of..., the any pay date on or after "1st of..." must be included, eligible for deferral, whatever. I am gentleman enough to consider what other meaning you think it may have.

Personally, I do not think it is open to interpretation. That is why I have seen documents that specifically mention what pay period is used. If not mentioned then it has to be any pay remitted to the employee while a participant (if not using full year pay). It is not relevant when it was 'earned', only when 'paid'. If a person enters the plan on Oct 1, and Oct 1 is a paydate, then they should be deferring on that pay. Otherwise you have a failure to allow deferrals and an EPCRS incident. Strong opinion to follow.

A merger of some or all of the plans is not always necessary to solve coverage. There are options for aggregation of plans, different testing methods, adding people, SLOB rules and other options. If necessary, bill the client to bring in a consulting actuary for suggestions.