ETA Consulting LLC

You're right; given that you've substantiated the controlled group. Since they are a controlled group, then they are treated as a single employer for non-discrimination purposes. This issue falls squarely under the purview of a TPA; and not necessarily a CPA with no background in 401(a)(4) of the Internal Revenue Code. Not intending to knock the CPA (then again, maybe I am), but I often find myself explaining to clients that "your CPA wouldn't know this because this is outside of his specialty). Good Luck!

We know the basics when it comes to determining ownership of Corporations and Partnerships: Ownership in corporations measure ownership in voting stock plus ownership in overall stock (voting and non-voting). Meanwhile, ownership in partnerships measure the percentage of capital versus the percentage of profits. We also know that when measuring the non-voting shares in corporations, the value of the preferred stock may change depending on the ratio of the liquidation preference to the liquidation value of the company (where a higher liquidation preference would translate into a higher non-voting ownership); which can become pretty significant depending on the appraisal value of the company. Here's my question: How would such a liquidation preference translate in an LLC taxed as a partnership. In theory, shouldn't it translate as an ownership of profits in the year of liquidation if (and only if) the company is actually liquidated? Alternatively, would it somehow translate into a hypothetical value on the capital side; which would effective require an appraisal each year (depending on the amount of liquidation preference to the appraised value of the company)? In all my years, I finally encountered a question that has me at my wits end

She should not be participating in the plan based on income from her LLC if there is no participating employer agreement in place. If there is, then you'd still have to determine if they are a single employer plan (covering related employers) or a multiple employer plan (covering two distinct employers who are not members of a Controlled Group or Affiliated Service (or Management) Group. You can then, perform your analysis on the non-discrimination testing. Good Luck!

1/1 begins at 12:00 Midnight. So, that is where the line is drawn. So, an effective date of 1/1 would say that you ended 12/31 (23:59:59) with 200, but you began 1/1 (00:00:00) with 99. Technically, this is where the line would be drawn according to the strictest measures. In operation, however, I agree with you. My first inclination was that when you start a new year, you'd first start with the 200 before it is immediately lowered to 99, but that is not actually what happens. You start 1/1 (at 12 midnight) with 99, but you ended 12/31 at 11:59:59 with 200. I just illustrate this for purposes of making an argument. But, when I do an amendment like this, I make it 12/31 while including an interpretative statement in the "SAMPLE" resolution that the amendment is effective at the close of business on 12/31. Good Luck!

It probably wouldn't make a difference as I'd doubt the IRS (or DOL) would challenge an amendment timing issue along these lines. It does, however, make for good water cooler talk. Let's suppose the plan has 200 "active" employees who are eligible and only 99 with balances. When you terminate on 1/1, does the beginning of the year participant count equal 200 (e.g. large plan filer) or 99 (now eligible for a small plan filing in the final year)? I can see the argument where 1/1 effective date is 12:00am (midnight) on December 31st (e.g. effective right at new year's day); where 12/31 would be effective 12:00 midnight on December 30th (one day short of year end). In practice, I'd use 12/31 and argue that this is clearly at the end of the year without going into a new year. However, 1/1 (e.g. effective 12:00 midnight on New Years Eve) would appear to be the most appropriate. Again, I believe either of these days would work because they are two ways of stating the same intent. Good Luck!

No, you don't worry about the accounts. A SIMPLE IRA is structured where the only thing the Employer has to worry about is the provisions for making contributions. After those contributions are actually made (and funded), then EVERYTHING is in the hands of the participants. Hence, each participant is solely responsible for their own SIMPLE IRA account. Good Luck!

And that is important, since this issue is specifically dealing with the deferral portion of a 403(b) plan. Hence, the Regulations are specific to that area (which may or may not be an ERISA plan). Good Luck!

I remember a discussion on this a few years ago. The question is what does "normally work 20 or more hours per week" mean. The IRS's Regulation on the issue appear to say "has ever worked 1000 hours during 12 months" (which was my argument), but that language appears to have been vague. So, you can have an employee that worked 1000 years, but as soon as it is not longer "normal that they work 20 or more hours per week", the question is do they fall out of the plan. This pertains to only the 403(b) provision for making elective deferrals. Good Luck!

Agreed. Good Luck!

I think you just answered your own question. One rule (Required Funding Deadline) really has nothing to do with the other (Deadline for Deductible Contributions). So, they should get the deduction. Good Luck!

I would comment again, but Flyboyjohn is saying everything that I would say. So, I guess my comment would be 'Ditto' :-)

Who's talking about post year end compensation? This is an issue of post plan termination compensation; which cannot possibly be eligible (since the terminated plan no longer accepts contributions for compensation received after plan termination. This is a simple concept. Good Luck!

I agree. I cannot fathom an argue where the beneficiary does not get 100% of the account at death. Beyond that, distributing RMDs timely is a qualification requirement for the plan. Hence, the onus is not squarely on the participant. Good Luck!

It has to be consistent with principles of math. When the loan was offset, part of that offset represented a return on the Roth basis and the other part represents earnings (which were not part of a qualified distribution). The only way the Roth Contribution basis would be increased is through a Roth Deferral (or conversion or whatever). Loans really don't change any basis. Good Luck!

Good Luck! I'm convinced that actuaries are geniuses. I've always been good at math and statistics, but they take it to another level :-)

They should be included in the count if you have a plan amendment that made them a participant during the year. Good Luck!

Since they are two unrelated employers, there is no 401(a)(30) violation; which is the application of 402(g) to a single employer. Hence, there is (technically) no harm to the plan and it is incumbent on the participant to recognize that he won't receive the full deduction. He, as an individual, gets only the 402(g) limit. Good Luck! In other words, you don't do a thing without the participant's direction.

The Regs do not get that specific. This appears to be an administrative issue that may be addressed in the plan where you have a participant that made an election per the plan's provisions and encountered a point where clarification on that election is needed from the participant. Good Luck!

I was thinking "DB" when you first asked the question. Past Service "to determine benefits" is referring to a plan formula where the benefits are determined by the years of service (i.e. like in DB plans). Vesting is based on years of service with the company. So, if you already have 10 years of service, then you'll be 100% vested. Of course, there are some allowable exclusions for service used for vesting (i.e. prior to age 18, prior to establishment of plan), but the past service issue deals more with DB plans. Good Luck!

I'm not sure if we read the same complaint. If each participant actually paid their participant fee, then there would've been no complaint. According to the complaint, the participant fees were calculated at $7 per quarter, but paid prorata based on plan assets. This resulted in those individuals with balances larger balances having to play increased fees for those who terminated with balances of $5k or less. According to the argument, those with 5K or less created the additional expense, but it was borne by the participants with larger balances. As fiduciary, you have a responsibility to those individuals with the large balances (who don't have the option of taking a distribution) to avoid unnecessary expenses; which in this case, resulted from failing to distribute those who terminated with balances of $5K or less. This is what it appears to have stated when I read it. Good Luck!

You seemed to have missed an important detail that would necessary for an accurate answer; what does the plan say with respect to the use of forfeitures? Good Luck!

Call them and explain that you never had constructive receipt of the funds; so there is no "60 day period". Hence, I have no idea what "date" would've passed. They should reissue the check as originally issued; made payable to the rollover institution FBO you as a direct rollover. You may have to get a supervisor on the line, because apparently the person you spoke to on the phone doesn't know what they're doing. Good Luck!

Of course. Catchups aren't included in the 415 limit nor ADP analysis. Good Luck!

January 1st sometimes fall on a weekend, but it always falls on a Holiday. That doesn't change the fact that the plan year (for a calendar year plan) begins on that day :-) Good Luck!

Separately identified? No. It's merely a higher limit for those who are 50 or older during the year. The amounts contributed are still elective deferrals. Good Luck!