thepensionmaven

First plan year 2015, over 100 participants, is an IAR needed?

Initial plan year, dentist had one location; during the next fiscal year, he purchased another dental office in another location under a different entity with a different EIN Plan properly amended and joinder agreement to include all eligibles both locations Fourth year, (current), closes the initial office and merges the two practices, under the name and address of the second location, but with a totally new EIN. Accountant filed 8822-B. A bit premature, but how do we handle the Form 5500-SF? Sponsor and plan name and EIN currently coincide with the initial practice, address and EIN. I assume there would be a problem in changing the name of the plan, as well. We could keep the name of the plan, but that's not to say the participants would be confused. Prior to EFAST, you could use lines 1-2 for the new corp and keep the same plan name and utilize line 4 for the change in sponsorship. On other plans where we have done this, the IRS (or the computer) does not read line 4 and the client gets the CP-406 Notice when Form 5500-SF under the old sponsorship (prior year Form 5500-SF) not received. They are looking to assess penalties and interest for the Form that they say was not filed. What is the purpose of line 4 anyway? In the past, these IRS Notices will (not "can") take up to 4 months to resolve. Any assistance with this is appreciated. I'm sure this has come up before.

What about filing for the initial initial plan year? Can we do an -SF?

Mike, you da man!

Same situation - client is a PC with two common law employees. Assets not sufficient to provide PVVABs at plan termunation. Client unwilling to waive, but rather wants to make participats' PVVABs whole by contributing the difference so the participants will be whole. Wouldn't the contribution be deductible in the year of termination?

We have three dentists, each with their own PC. Together, they also own (1/3 each) in a partnership that does the billing for the three dentists, collects the rent from the dentists and pays other dental expenses. Each dentists has his own plan. There are two employees in the partnership, one works 70% for one dentist, 30% for the partnership (PT 600 hours) - receives W-2 from each. The partnership employees are not on W-2 for the other two dentists. Don't the two employees have to be covered in the plans of dentists 2 and 3??

My client is a dentist in a dental office shared by two other dentists, each with his own PC. Some of the employees are shared among the dentists, and that has been addressed and not part of this discussion. The three dentists own identical interest in a corporation they formed, the sole purpose is for medical billing, paying the office rent, and other joint expenses, etc for each of the dentists. My client is covering his employees plus his share of the shared employees in his current plan. He also gives a W-2 to two employees who work for the corporation - one is part- time, a few days per week; the other is full-time. Looking at the ASG/Management Org regs, I would think that this is an ASG situation, my client has to cover the full-time employee who is paid from the separate corporation, but not the PT employee who only works a few days per week. Or, the employee could waive out (but why would she?) or be excluded from participating, as long as the plan passes 410(b). Any thoughts??

What about Volume Submitter docs?

Thanks, the resolution was dated prior to 10/31. Wouldn't IRS look at this as the plan year being more than 12 months? That's my only concern at this point.

Plan originally set up as calendar year plan, when we took over, the client tells me they are a fiscal ending 10/31. Plan has a corporate resolution changing plan year to 11/1 to 10/31 for 2015 and the 2015 5500s have not yet been filed. Plan was restated for PPA effective 1/1/2016. Question is the 2015 5500s - if we do a short 5500 for 1/1/- 10/31/2015, how do we handle the 5500s for 11/1/15-10/31/2016 as that would be two sets of 5500s for 2015. Won't IRS and/or DOL send out a Notice or Letter??

We just took over the admin of a profit sharing plan that had been named "XYZ, PC 401K Profit Sharing Plan" SHNE, with the "discretionary" 3% (maybe) notice. The plan apparently was not meant to be set up as a 401K, there have never been any employee contributions, the previous TPA prepared the document as a 401(k) with the discretionary SHNE "maybe" notice last year. Since there have never been any employee contributions, is it possible to amend the plan currently to a profit sharing plan and not a 401(k) and remove the references to the 401K portion, which never existed in the first place? Thoughts?

Now I'm ready to throw my hands in the air. I have a dentist client whose practice is in two locations, both employers adopt the one plan in the name of PLLC #1 and is PLLC #! 401K plan with PLLC #2 a second employer under PLLC #1 plan. In 2015 he merges the two practices into PLLC #2 and PLC #1 collapsed. Past experience with IRS (no experience yet with DOL), Form 8822-B completed, Form 5500 filed under remaining PLLC #2, line 4 asks for old employer and plan information, which we give. Five months after Form 5500 filed, an IRS Penalty letter is generated because they have not received Form 5500 for the original plan. Of course, this takes five months to be straightened out. Why does Form 5500 ask for the prior employer and plan number if that line is not being read??

We have a safe harbor 401K with pre-tax and post-tax employee deferrals. Plan document mentions safe harbor match in terms of both employee contributions. How is the compensation determined for purposes of the SHM? The document defined compensation as W-2, box 1 plus pretax deferrals. Since post-tax deferrals are included in Box 1, I would think the definition of compensation would be the same, whether employee pre-tax or after tax contribution.

We have just taken over a 401(K0 plan from a payroll provider. Eligibility 3 months, entry semi-annual. Would terminated participants who work less than 500 hours be included in ADP/ACP tests?

It is my understanding that if a participant goes from FT to PT and works more than 500 hours and is employed on the last day of the year, that individual must receive a contribution. What is the cite for this??

With Roth 401(k), I assume Box 1 of W-2 includes Roth contribution, unlike traditional 401(k) which would be box 1 plus 401(k). Therefore, does the 25% maximum contribution (assuming a one-participant plan) include Roth contributions or are they in addition to the employer 25% contribution? As well, the maximum $53,000 (plus catch-up) includes both Roth as well as traditional 401(k). Cites?

I can only assume IRS finds their designation more cumbersome than they imagined and can not sustain the designation.

Existing 401(k) plans are are amending to safe harbor plans must timely distribute the notice 30 - 90 days before the next plan year (unless you have reasonable cause for less than 30 days notice) and must be amended to include the SH before the year starts - unless availing yourself of the aforementioned "maybe" notice on the 3% non-elective. Thanks for the info, but to answer the client's question, the plan could have been amended to safe harbor status if the plan had been amended prior to October 1st? I just needed some ammunition in case he asks me why this can't be done for 2015 "because his plan had not been amended to SH by October 1st." Or am I missing something??

Does a tested 401K have to be amended by October 1st to be a safe harbor plan for that year?

Not enough was contributed as too much was deducted from his pay so pay was understated for the match.

Client informs me payroll company took out too many deductions from employees' pay so employer has been calculating co. match on incorrect salaries for about 6 months. Company contribution made at the same time employee contribution. If I am reading the IRS methods of correction correctly, there would be no corrective contribution of 50%, but obvious the company must recalculate the match on the correct incomes and make the contributions to the employees' accounts plus missed investment income from date match was actually made? As far as rate of earnings, is there some sort of "safe harbor" like 5%?? And, the payroll company is marketing 401K administration!!

I believe the IRS wording was they will discontinue the ERPA exam, not the ERPA designation. According to the IRS release, the ERPA designation is renewable.

Two W-2 employees terminated from employer X profit sharing plan. These two are also 50/50 owners of their own corp, which does not have a qualified plan. Life insurance agent (of course) wants them to establish a profit sharing plan, take the rollover money to purchase ten- pay life insurance policies and make the plan the owner and beneficiary. This just doesn't smell kosher. Any thoughts?

Anyone have a sample plan amendment or corporate resolution to change plan year to co-ordinate with fiscal? My document service does not have one. Would appreciate a copy. Thanks.

I've run into the same situation - client sat on this for 3 months and now wants to move. An added question, is there a minimum amount that would have to be contributed by 9/30? Would the individual accounts need be set up by 9/30 or would a trusteed checking account with $2,000 or so suffice?