thepensionmaven

We took over a profit sharing plan with 3 pooled accounts. We have not dealt with pooled accounts in so many years, I do not recall how this had been handled. In the past, participants had been given account balance statements combining the total of the three. Like most plans, December lost money. One participant is questioning her % of the loss and wants to know not only her breakdown of the three accounts (2 are CDs and one is invested with a broker), but her breakdown of the underlying investments in the brokerage account. Furthermore, she says her attorney told her she has a right to see her portion of the breakdown of the underlying investments in her account balance statement.

OK, let me start over. Accountant came to me with a prospect. Three employees of a law firm terminated and formed separate PLLC on 7/1. Two are sole proprietorship PLLC, the third PLLC is a partnership consisting of the two partners. Doesn't make sense, but rather than have three separate plans, the accountant wants one plan with the three PLLCs, two of which will be taxed each as sole props, the third as a partnership. This whole situation is very "interesting" and we are trying to find a way, if possible, for this to work. They each contributed to that firms 401(k), so any contributions would come off the 402(g) max for the year. Plan could be effective 1/1/19, but income for contribution would have to be from 7/1-12/31/19 obviously. The elections for the plan would need to be effective prior to the end of the year, obviously we can not have 1/1 and 7/1 entry date, which is why I mentioned 6/30 and 12/31 - they come in the last day of the year. Who will agree with me that none of this makes any sense??

Larry, have you ever seen a 401K with entry dates of 6/30 and 12/31 before???

The "problem" is that I have never seen a "tested" (non-SH) done so late in the year. I would assume, though, the deferral elections are to be made prior to 12/31/, then they have the due date of their returns to make the contribution. I don't know what a disregarded entity is? Disaggregated? Definitely controlled group. I've never done one plan for three (3) employers before, two at the most, but it was a MEP with Dr. as PC and a sole prop. Who would be the sponsor?? Sorry for my ignorance.

Yes, changing the ownership should be, I'm just thinking if the insurance company does not within a reasonable time frame prior to 12/31. But then again, the cash value of the life insurance has never been accounted for,

An accountant has asked if a new 401K with no employees, non-safe harbor, can be set up for 2019 for three partners under the following circumstances: Three attorneys set up their own PLLCs 7/1/2019, no eligible employees, so safe harbor not needed. Accountant wants them to have a 401K for 2019. Each worked for the same law firm prior to 7/1 and one made contribution to another 401K, one to a 403(b). Obviously, the 402(g) limit comes into play. I don't see how a 401K can be set up by 12/31, either with an effective date of 1/1/2019, 7/1/2019 or even 12/1/2019, but the accountant is telling me another TPA firm says this will fly. I don't see how.

Similar question. Dr. client has retired. Straight PS plan. One employee paid out in 2019, Dr. has a life insurance policy in the name of the plan. He has rolled over the investment portion of the plan. Must we wait until the life insurance ownership is changed to the Dr. as owner? Or can file final 5500 for 2019?

Thank you all.

Recordkeeper says TPA responsibility. Plan investments with Mass Mutual, individual accounts, about 6-7 funds chosen for all subaccounts, elective, SHNE, Roth and voluntary.

We administer a 401K that allows for employee after tax contriiubtions. The client over-shot 415 by $18K. Since voluntary, will remove from the plan, but be taxed on the earnings. In the past, we have used the VFCP calculator to calculate interest from the date of payment to the plan through the date the funds are removed from the plan. Is this still allowed; or if not, what is the generally accepted method?

Is there a timeframe within which to file an "amended" return? I do not see any reference in the 2018 Instructions to Form 5500-SF/

We've filled some plans and used the "reasonable cause"; however, each abatement involves a series of up-and-back letters between IRS and the individual requesting the abatement. The reason is that Person #1 at IRS sends out Letter #1; Responder answers, Person #2 receives the answer, most often does not check the file...we had this happen once or twice and the actual abatement took 4 months. Attached is the "reasonable cause criterion" if you need it. Reasonable Cause Criteria.pdf

The plan is the owner and beneficiary of the contracts.

We administer a 401k invested with Voya. Two trustees, husband and wife; the husband died a few years ago and his account has remained open. Voya has thus far refused to rollover his account into hers since she has requested. The plan is the beneficiary and she is the contingent; both are over 59 ½. Voya is telling me she can not rollover his account into hers for RMD purposes. Neither are close to 70 ½. Since he is dead, he can't take an RMD anyway, so what is their rationale?

I must confess, being a qualified plan TPA, I know next to nothing about HSAs or Section 125 plans. My client has inquired about updating their 125 plan document; are these two plans, an HSA and a 125? Stupidity is not excuse.

Yes, there is a DB for one company and a 401K/PSP for the other company. I know it's a combined 415 limit, but are the two employers treated separately for the purposes of the $250K threshold. The reason for the two different plans, is we set up the DB first, and no one looking into the matter ever considered asking if there was another plan.

Client is terminating his profit sharing plan, and is retiring at current age of 75. We have calculated the RMD for his employer account. I assume (?) since the voluntary account has already been taxed, the only amounts he would be taxed on and would be subject to the RMD would be the earnings? He also wants to rollover the voluntary contribution account. We're talking somewhere in the area of $250-$300K, which I do not believe he can rollover? If that is the case, what is to happen to the account?

My question concerns the 5500s. My client owns two companies, obviously a controlled group. He is the only employee in each company. Since they are two employers, do we need aggregate the assets for purposes of the $250K threshold for filing.

This is a new comp prof sharing as well. The question I was attempting to ask concerns the fact that I don't see how 401(a)(4) would be met unless the client made additional contributions for the terminated employees, who were all in a rush to get their money out of the plan. I would hope the financial institution (Hancock in this case) leaves the accounts open.

I'm very interested in your spreadsheet templates as well.

Client sponsors safe harbor 401K/profit sharing plan was going to be terminated as the employer would no longer be in business.All participants received the safe harbor non-elective. The non-highly compensated employees were terminated as of 8/30/2019. Plan is still active, employees have rolled over; owners are the only participants in the plan. Accountant now tells us the sale was an asset sale, the company is not out of business; he wants to take a deduction for 2019 for only the 2 owners and their sons. I don't see how he can.

In calculating whether the plan has $250K, does one count receivables??

Two employees previously working for a law firm started their own practice 7/1/2019 and want to set up a safe harbor 401K by 9/30/2019 I believe the plan would need to start as of the date the practice started, have a short plan year as they were employees of another firm prior to that date. No eligibility and all employees that started with the firm, whether part time or full time need be included. I also believe the only safe harbor available at this point, judging from the clients' goal, would be a safe harbor match, with the hopes that the employees not defer? Am I off track here?

Found the answer on another thread.

How would one go about calculating an RMD on a participant's voluntary account, since basis in the account has already been taxed?