TPApril

maybe with the end of the year here i'm not focusing, but i cant recall how to put into practice inclusion of a participant who reached the 1 year (& 21) service when we are not defaulting them to the dual entry date within 6 months. example for plan with 401(k) eligibility on 1st of month after hire: DOH-9/15/10 DOE-10/1/10 Was excluded from 2010 ADP test as otherwise excludable. For 2011 testing, will include, but which pay/401(k) amounts do we include: a) Full year since including in the test and participated for the full year b) 10/1/11 - 12/31/11 since that is the period that is not being treated as otherwise excludable

This question was posed to me but this is not my area of work: Participant submitted request for $1,000 for 2012 flexible spending. HR told her it wouldn't round out correctly at 24 payrolls (41.67 * 24 = $1,000.08). HR told her she needs to submit a round number and made her fill out $40.00 for total of $960.00. Is there an issue here? The same HR btw did not inform those ee's who did not participate in 2011 of their option to participate in 2012. Any issue here?

Slightly different scenario and question, though related to late deposit of safe harbor - 3% nonelective safe harbor is deposited for staff on a payroll basis. Owner (and only HCE) has not deposited for himself any amount for both 2010 and 2011. Assumptions: 2010 - should be deposited as soon as possible with calculation of lost earnings (through vfcp calculator?), though technically, owner has until 12/31/12 if not audited. 2011 - should be deposited by tax deadline (if extended) of 9/15/12. But considering that it is paid on payroll basis to staff, would it be different? (I read somewhere that for safe harbor match the deadline would be end of following quarter, so would 3/31/12 be best deadline?) For either year, I dont think it necessarily makes a difference at this point if they are deposited before or after 12/31/11. Any thoughts, much appreciated.

Tom & ESOPguy - thanks for your replies. Definitely prefer the more conservative approach. However, what if such approach actually produced better adp test results? Would you stick with that, or check the other approach first? (could potentially happen with this firm due to its smaller size and the make up of the new hires)

10 years later on this thread.....when i've done Otherwise Excludable testing for a plan with monthly entry dates, i've always included NHCE's if their entry date following their 1 year anniversary fell within the plan year. Now I'm looking at a calendar year plan with 3 months elapsed time for entry. For 2010, plan's prior tpa excluded any NHCE who was hired after 7/1/09, treating them as excludable until 1/1/11. I'm just new to looking at this approach, is this the current best practice?

Thanks for your reply. We will do what we can to advise him to make him whole as soon as possible. Now, more of an ethics questions re the role of the TPA. Dr. fails on a regularly basis to deposit 401k timely. He does not pay non-eligible expenses. I dont believe another tpa will take him, so I dont know if he is better off if we step down at this pt. Is it acceptable to advise him to correct his contribution issues (including the differences btwn SCP and VCP) and then terminate the plan? I also believe he will not want to pay for a determination letter upon termination if that route was advisable.

Similar situation, different employer type though...S-Corp with 1 HCE - the doctor. Due to his financial issues, he never put in his 3% safe harbor for 2010 for himself, but he did deposit for his staff on an ongoing basis. He has not put any to himself yet for 2011. Based on this thread of posts, he does not have a choice, is that correct? That being the case, I think he can still deposit the 2010 amount by 12/31/11. Also, I'm not sure if he ever gave out his safe harbor notice in 2009 for 2010. If not, would that change the necessity of depositing 3% to his account for 2010 or 2011? As a minimum, I'm thinking he needs to be advised to remove himself from future safe harbor allocations, effective 2012.

Why is it that so few plans that do have fidelity bonds report coverage amounts that are less than 10%, often it's not even close to 10% of the assets, yet the have the coverage.

Thanks - you didn't mention the forfeiture option at all - reason I am thinking about it is that because of the small population size, no matter what, the allocated amounts will be in the hundreds of dollars, so even if only 1% of comp, it kinda feels material to me. another thought on the forfeiture option - the owner's amount as a forfeituer will be half of what it would be if allocated as earnings, however, there is one non-owner-family inactive who was employed at the time who would miss out on his $70 if not allocated to all as earnings.

Small top heavy plan has about $1,000 unallocated funds in trust which has been tracked to earnings on a 2003 profit sharing deposit that were not allocated along with the contribution. Plan sponsor cannot locate report from that year. Can this amount be allocated this year as 1) among current active participants as a forfeiture? or 2) as earnings to all remaining participants who were in the plan in 2003, based on current account balance, or 3) as earnings to all current participants, even if hired after 2003?

Same topic, but different question: Plan forfeitures can be used to pay fees. 2010 plan year fees are being invoiced. There have been amounts forfeited in 2011. Can these amounts be used as well as prior year amounts, to pay for the fees? Or maybe plan year of forfeiture and plan year of incurred expense really don't matter?

If I understand your situation correctly, I had a similar situation earlier on. It appeared that the issue was they were using two different means of submitting different plans with the same signer - meaning different software (Relius, FtWiliam, or efast2 directly) for each plan. For future clients with different service providers completing other 5500's, I had them log on to efast2 first to verify credentials.

In general, can owner 401k be treated differently from employees. S-Corp deposited 401k contributions late in 2009. In 2010, he paid lost earnings on the late contributions, including his own. Did he need to pay lost earnings on his own amounts? Furthermore, does his amount need to be reported on the 5500? It would be a difference of $10,000, reducing the amount reported for 2010 from $13,000 to $3,000. If that is possible, would that be worth amending?

somewhat related - S corp - owner deposits 401k contributions late. When reporting on 5500SF, would you include the owners own 401k amounts? In general, would any correction be applied to his amounts as well?

New small plan client has finally sent in transactional accounting 'in time' for filing 5500. Here's what we've learned: 2009 delinquent contributions were deposited in 2010 with lost earnings of $65. No 5330 filed. No excise tax paid. 2010 delinquent contributions were deposited in 2010 and 2011 with lost earnings of $26 for 2010. No 5330 filed, no excise tax paid, no extension filed. When calculating excise tax in 2010, does the 2009 portion applying 100% include the unpaid excise tax of 2009? ie 65*100%+65*.15*100% = 74.75? I understand there is an option to pay excise tax to the trust and allocate to the participants affected. In this case, excise tax will be under $100 each year, and no contributions were deposited over 180 days late. Would this be sufficient, without filing a 5330 or VFCP? I also recall something about filling out 5330's for records, but not submitting. Much appreciated!

Participant misinterpreted the dependent care cap and pledged $5,000 instead of $2,500. What are the options for the participant - can she stop future payments without a qualifying event and recover the excess that is not eligible?

on the theme of late 401(k) deposits as reported on SF, instructions say: The total amount of the delinquent contributions must be included on line 10a for the year in which the contributions were delinquent and must be carried over and reported again on line 10a for each subsequent year until the year after the violation has been fully corrected by payment of the late contributions and reimbursement of the plan for lost earnings or profits. my mind is not focusing correctly on what this means, in particular, if you include corrected amounts in the year after or not. does this example make sense: 2009: late deferrals totalled $1000, $500 of which were corrected by 12/31/09 => 2009 5500SF 10(a) reports $1000 2010: late deferrals totalled $1,200, $600 of which were corrected by 12/31/10. Remaining $500 from 2009 were corrected by 12/31/10. => 2010 5500SF reported amount calculated as follows: 2009: first $500 was corrected in 2009, this is the year after so not included, second $500 was not corrected until 2010 so it is included. 2010: total reported of $1,700.

oh this topic always stumps me...5500 for wrap benefits plan has always been filed as a single employer plan, but employer is a hr leasing company with many companies under the plan. looked up one of their competitors and they file as multi, but seems to me the definition of multiple is more apropros. now i dunno if this should be single, multi or multiple? i know theres info i need to make the determination, just not full on clear what it is.

Service provider received direct comp of $500 and indirect comp > $5000. All indirect comp = eligible indirect comp. Would this service provider then be required to fill out line 2, and in so doing fill in $500 of direct comp and $0 of total indirect excluding eligible indirect? It just looks funny to be listing them with only $500. As an alternative can this service provider be listed only in line 1?

I posted this question elsewhere but received no response. Looking for some opinions: There seem to be no instructions for Schedule A Part III. I'm guessing this is to be filled out on a cash basis but was looking for other thoughts. Specifically premiums for a prior year that get paid after the policy year is over - I'm assuming these should be included with the current year's premiums.

There seem to be no instructions for Schedule A Part III. I'm guessing this is to be filled out on a cash basis but was looking for other thoughts. Specifically premiums for a prior year that get paid after the policy year is over.

It's now some 10 days later and the filing still does not show up. Calling up the efast2 number gives a status "Filing Received", so not sure what this means?

Plan sponsor was not able to make payroll for May, but was concerned about 401(k), so she made the 401(k) deposits but they were paid in July, and actual payroll has not yet been paid. So is the 401(k) late and needing lost earnings?

Has anyone else had this circumstance: 5500 filed last Friday, plan sponsor logged in shows it has been received, but searching online at efast2 does not show the filing?

Yes, it all sounds familiar! Thanks for a great description and comparison.