thepensionmaven

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?

We have a SHNE 401(k) with voluntary contributions, all testing done. Affected participants of course owners, removed the excess and claimed the earnings as taxable. In calculating the excess, SHNE for these HCEs was not contributed. Plan doc allows SHNE for owners, but I believe the thinking was, since the SH contribution has not been made yet, why treat as excess. Is it permissible for the owners to "waive" the SHNE for 2018, or do they have to contribute, then remove it from the plan?

We are working with another TPA on a combination straditional DB with 401(k) SHNE - no PS. There are 5 employees, 2 principals, 3 NHCEs. For some reason, it was decided to exclude on of the employees from the DB, but he is included in the 401(k) with the SHNE contribution. I believe both plans can be tested together so 410(b), 401(a)(4) and 401(a)(26) can pass, but would the excluded employee be included in combo testing?

I send mine in batch every year, either overnight or 2nd day, return receipt requested. I enclose a list of Sponsors and EINs. We all know Murphy. I sent some extension out early for 7/31, certified, return receipt. Received the card back, no stamp for date received or signature. Mail carrier told me I should go online to track - the card had been stamped received and signed.

All the facts- Plan eff 1/1/18, I did a proposal based on estimated W2. Client contributed 80k by 12/31/18, based on estimated S Corp W2. Accountant never gave W2 ( he just informed me - what an AH), wants to save the contribution as some sort of deduction and mentioned he could generate a Schedule C to validate the client's contribution as a deduction and asked for a net schedule C he would need to give in order to justify. Does not pass my smell test, I don't know what can be done, if anything; I do know to tell client to find an accountant that knows what he is doing.

The plan was adopted October, 2018 for 2018. Appears the accountant did not give a W2, as to why, he was probably attempting to classify the Sub S income as was W-2. Probably did not know K-1 can not be used for pension purposes. Maybe client should find another accountant. No other employees, accountant questioning the possibility of classifying S income as earned income. Non-standardized prototype. Seems questionable to have two employers, the S Corp as well as a "sole proprietorship" adopt the same plan. Obviously the plan must be amended as to Sponsorship.