ETA Consulting LLC

I agree, totally. It seems as if TPAs sometimes get carried away. You shouldn't be looking at any more than an hour of review. Good Luck!

Of course, you're giving the special tax notice. This notice informs them, amount other things, of their rights to roll the distribution over. You do not, however, need to give them a distribution election. Instead, you may simply pay them out the cash (without any withholding) and issue the special tax notice with the distribution. Good Luck!

Sure, they can. Not a problem. Good Luck!

You may amend the plan to say one year of service is required; however, employees hired on or before a certain date would be eligible. This is a standard selection is most of the prototype documents I've seen. Good Luck!

That's a good question, for which I do not know the answer. But, in your case, it's a non issue because your correction would fit squarely on the Form 14568-E. Even if it didn't, the flexibility you could use would be to default the Key and then use the Form 14568-E for the other non-key. This approach is just operating under the assumption that you must use the Form 14568-E. Since you can get where you want to be by using the Form (since there aren't any Key Employees affected), then that should resolve your issue. As to whether you are eligible for the reduced fee for loan issues while not using the Form; I'm not sure. The last thing you would want is to submit under that assumption and then have the IRS back-bill you for the rest. Good Luck!

I think the common trend is for plans to actually require each employer to adopt on to the document as opposed to automatically covering them. But, you're right in that you should always compare what actually happened to the written terms of the plan when defining problems such as this. The fix is to file a VCP and have a retroactive Co-Sponsor Adoption of the Management Company (similar to a non-amender process). Again, it is only after you ascertain that the Management Company, Inc. was not included in the plan as recommended by kcbirm. Good Luck!

Based on your facts, you would only be disallowed from using your correction if one of the 10 loans were made to a Key Employee. Likely, you have a non-issue once you verify this. If not, you have an interesting question. Should it be necessary to actually use the Form, you could choose to default the Key and issue the Form 1099R [since he should've known better :-)] and then use the relief for the other 9). Good Luck!

You're struggling to find force-out provisions for SIMPLE IRAs when there aren't any. The Participant is in control of the IRA account when it comes to timing of withdrawals. Good Luck!

There is no substitute for leadership. --- W. Edwards Deming Good Luck!

You should request a copy of the Summary Plan Description (SPD) and review your options. It is written in plain language and should address your question. Good Luck!

Yeah, but weighing that against the obligation to enforce the participants rights under the written terms of the plan? It's given that the Plan Administrator has a responsibility to ensure that that plan doesn't pay unreasonably high expenses, but I'm not sure about the notion of denying a Participants rights to a distribution under the terms of the plan for purposes of having the share in anticipated expenses; especially if that delay is longer than 3 business days. Good Luck!

A simple VCP submission to the IRS should clean it up. Good Luck!

Just an FYI... For the discretionary match, you'd make the formula something like 66.667% of each dollar deferred (where only deferrals not exceeding 6% of Compensation will receive the match). This would put each HCE at 4% of pay since they deferred above 6%. Since the NHCE deferred at 5%; he would receive $1066.72; not $1600. That's only for the discretionary portion; should the owner want to limit the NHCE as much as possible. FWIW, I'm not making any value judgements about what the owner should do; I'm merely pointing out the flexibility allowed in the discretionary formula. Good Luck!

Agreed. Don't forget the additional "B" if it was from a Roth Source. Good Luck!

I agree that it is certainly flexible, depending on how you interpret it. My interpretation was this: Many plans include hard-coded language in their BPDs that say regardless of your elections on the Adoption Agreement, you may still make a QNEC or a QMAC. So, I was thinking that if the plan document is actually mapped using ANY match, then 2K would be selected. Just another one of many potential interpretations. Good Luck!

There was a discussion on this board a couple of weeks ago about the same issue. Good Luck! http://benefitslink.com/boards/index.php?/topic/59875-ee-now-working/

I haven't seen this one in a while. I'm of the impression that a plan termination doesn't create a short plan year, but does create a short limitation year for Section 415. I don't know if anything has changed since I got that impression. May be worth looking in to. However, if you actually amended the plan to create a short plan during during the plan termination, then you may have 'screwed the pooch'. Good Luck!

I don't think this would be an issue. The only argument would could make is that contributions must be recurring and substantial, but that has been interpreted to suggest that the plan is operated for at least 5 years. This type of thing happens all the type; as long as you keep the plan documents current and continue to report when required (I would imagine it's 5500 EZ reporting now), then you should be fine. Good Luck!

You are allowed to have both, but the SEP does not have the flexibility to exclude the separate company in the manner in which a 401(k) plan may. All the 401(k) plan has to do is pass 410(b). A SEP doesn't have such tests because there is no flexibility within the setup to allow for the exclusion from participation. Good Luck!

I think the most important thing is to be consistent in your methods. It would appear senseless to argue one over the other. Good Luck!

I reached out to rushlakeguy behind the scenes and got a little information. As we all know, there are at least a million different possibilities until you get the actual numbers and facts. I think that was Mike Preston's point all along. Basically, the Key Employee Balances exceed 60% of plan assets by only $569.10. Without any employee hardships, loan defaults, or ANY types of inservice distributions during the past 5 years that may be worked back in, you have a top heavy plan. BUT.... Let looks at a potential grey area for a moment. We know that for purposes of determining the balances on the determination date, you're not allowed to use discretionary profit sharing contributions deposited in the following year but made 'as of' that date. There is an exception for the first plan year; where potentially the trust balance is zero on that date and the 'accrued contributions' are all you have. We also know that plan subject to the funding requirements of Section 412 (e.g. Money Purchase Plans) would have those required contributions considered as part of the plan's balance on the determination date; even though they will be deposited within 8-1/2 months after that date. But what about the Required Top Heavy Minimum Contribution for the 2015 Plan Year that was actually deposited in 2016. It has the same characteristics of a 412 funding requirement (in that it MUST be made and not subject to the discretion of the employer), but it is not an actual funding requirement under Section 412. It may be an interesting argument presented to the IRS during a hypothetical audit that the $10,000 funded to those non-key employees for the 2015, but deposited in 2016, gets accrued to the balances of the non-key employees since it was required to be made in a manner similar to a 412 funding requirement. What do you think?

I think it's something that's good for the belly :-)

The Plan may remove any contributions (plus applicable earnings) that you were not entitled to receive under the terms of the plan from your account. Good Luck!

These are correctable. What is your TPA saying?

I think everyone may be saying the same thing, but the wording might be confusing. You can have a permitted disparity formula that says 3% of total Compensation plus 3% of Excess Compensation (and define Excess Comp as Comp over the TWB) and it would be deemed a uniform allocation formula. However, you cannot use the 3% SHNEC as a base to that allocation and have it treated as a uniform allocation formula. You CAN use it as a base, but you're formula would not be considered uniform; and additional testing would apply. But, once you satisfy integration, you can add ANY prorata formula (3% SHNEC included) on top of it and it will pass. The issue with the 3% SHNEC is that you cannot use it as the base of the formula or when imputing disparity under 401(a)(4) testing. Good Luck!