ETA Consulting LLC

I think I mis-read the original question. I agree with you.

This question can be answered with a thought: The incidental rules are written to ensure that the plan doesn't exist for the purpose of investing in life insurance. In other words, life insurance must be 'incidental' to the purpose of the plan. Accordingly, the incidental rules provide a mathematical standard; meaning one that can be calculated (and not subject to facts and circumstances). Once you apply that pattern of thinking, you'll likely have your answer Good Luck!

There is an argument (in the end) that "Plan Administrator" is an interpretation issue. You see, "Plan Administrator and plan administrator" are two separate things. Plan Administrator is defined by ERISA while a plan administrator is simply someone (may be a TPA) who administers the plan. I would not expect attorneys and judges without a background in ERISA to be knowledgeable on the difference. With this thought; I with QDROphile on this one. Given the likelihood that the attorneys and courts used 'plain language' instead of ERISA to assign meaning to the term plan administrator shouldn't be a major show-stopper. If anything is ever challenged, it is certainly not going to be based on who the plan administrator is; and we do have precedent on that one. The precedent is (and let's all say it together): A person's fiduciary status is not determined from a label, but their actions. So, you can call a TPA a "Plan Administrator" all you want, but that alone would not make them a fiduciary under the plan. This further reinforces my alignment with QDROphile on this one. Good Luck!

415 Compensation 'automatically' satisfies 414(s). You're fine. Nowadays, documents are written to be as flexible as possible; typically stating that any definition of Compensation that satisfied 414(s) may be used for Compliance testing (and that you must use the same definition of all tests). I cannot foresee a problem unless that document, itself, prescribes and single definition of Compensation for testing purposes. Good Luck!

9 x 9 x 9 x 856 x 125 x 164895 x 0 = 0 I figured this out in less than 1 second. The key is to recognized the obvious rule, anything multiplied by zero is zero, and use that knowledge to solve your problem. When performing any analysis, this approach helps. Regardless of intent, the obvious rule is that there is automatic attribution to children under the age of 21. So, if a husband and wife each owns their respective business, their minor child is considered 100% owner of both businesses. I, typically, perform that controlled group analysis in 3 seconds; the time it takes for me to ask the age of their children. Trying to enter subjective opinions regarding the 'intent' which runs contrary to 'plain language' is not efficient in my experience. I tend to design the plan by treating the employers as related and move on. When you begin to introduce subjective measures, you open yourself up to endless debate. Good Luck!

The plan has appears to fail to follow the terms of the plan by failing to make the contributions. The plan has also failed the Safe Harbor requirement by failing to make the safe harbor contribution within 12 months following the plan year ends. Many failure, like these, are what I term a 'butterfly' effect. This is were a single misstep simultaneously violates more then one distinct rule. Failing to follow the terms of the plan is one thing, but failing to meet the safe harbor ADP/ACP requirements is another; not making an argument that one is more important than that other (as this would be useless). The point being, you have several violations which would appear to be corrected with a single fix; VCP. Good Luck!

Notice, if the person who receive the distribution actually terminated employment prior to the distribution, then they are still exempt under the age 55 exception; assuming you're talking about the 401(k) plan of an employer (and not an IRA). Good Luck!

No. The distribution must be 6 months after 59th birthday or later. This is different from the age 55 and severed employment exception; where you are exempted if you terminate employment in the year you turn age 55 (or later). Good Luck!

To QDROphile's point, the amounts were transferred to the 401(k) PS plan due to plan merger. I agree that 'rollover' is a bit misleading. Good Luck!

Well, there is no distributable event with respect to termination of employment since they are employed with a member of the controlled group. As to whether they are entitled to a PS, you'd have to carefully read the plan's language to make the call; as the only thing the law states is that the plan must state how the contributions will be determined (so, it driven by the plan, not the law). Good Luck!

The rule is that those same MP distribution restrictions will remain with those funds. So, you would not be allowed a distribution from the MP source at 59 1/2. You must wait; unless your NRA for the MP is 59 1/2. Good Luck!

As a rule, compensation must be reasonable. This is not necessarily a qualified plan rule, but does impact the plan. Let's suppose you have a Doctor whose spouse works for the company. Let's also assume the doctor has historically paid her husband ( ) $15,000 for performing routine duties around the office. Suddenly the doctor establishes a 401(k) plan and begins to pay her husband $150,000 each year to perform those same duties. This compensation, in turn, enables the husband to get his plan contributions higher without giving the bank away to the employees. The IRS "may" consider this to be unreasonable compensation. It's really more of a 'facts and circumstances' determination to see if compensation is being manipulated in an aggressive manner in order to achieve results elsewhere. Good Luck!

Your participant signed a TEFRA 242(b)(2) election. You may read the election; as distributions must be made pursuant to the language within. Any changes from the election signed at that time would require him to take the RMDs for the years missed (no penalties). Good Luck!

Correct. There is no longer a 2% reduction (on the employee's side) from 7.65% to 5.65% for FICA. So, the employer will now pay exactly what the employee pays; not more. So, it would be 50%. Good Luck!

The son must be allowed entry. It doesn't impact the test if the son does not defer since each HCE's deferrals are limited to 125% of the Average rate of deferrals for NHCEs. Good Luck!

No, There isn't an opt out feature on the SEP portion (only an option not to defer on the SAR portion). Good Luck!

Please provide the full quote you are referencing. ...a cafeteria plan...can include ? What's in the "..."? Perhaps that would answer your question. Good Luck!

Yes. A defaulted loan is still an outstanding loan. Good Luck!

If the excess occurs in the single plan (or plans of a single employer), then I could see where the participant's payroll should've stepped in the preclude the excess. However, this can easily happen when someone changes jobs during mid-year and do not instruct the payroll department of their new employer to limit deferrals. This leaves us unclear on exactly how we would approach the correction as we are not clear on the exact fact pattern of how the transactions took place. For instance, if all contributions were made to a single plan, then the recordkeeper could simply reflect part of the distribution as a 402(g) correction and the other part as a rollover. You'd then reach out to the IRA custodian to advise that part of the funds rolled were excess amounts not eligible for rollover. At the end of the day, there would never be a situation where an individual who acts now would be subject to taxation. It's just a matter or working with the various parties to ensure everything is properly reported for tax purposes. There may be several ways to do this. Good Luck!

It appears as if your own citation agrees with you :-) Good Luck! EC 3-8 In like manner, profit-sharing compensation or retirement plans of a lawyer or law firm which include non-lawyer office employees are not improper. These limited exceptions to the rule against sharing legal fees with non-lawyers are permissible since they do not aid or encourage non-lawyers to practice law.

Not going to happen. The participant is in control of the accounts once the assets are place in them. The only thing the advisor may do is to set up additional accounts for subsequent contributions; assuming the SIMPLE IRA is with a designated financial institution. But a participant's balance in the SIMPLE IRA account is solely controlled by the participant. Good Luck!

12AX7, That was a cheap shot. Needless to say, I was thinking the exact same thing

A SEP does not have a three digit plan number. Good Luck!

It is logical: 1) Since your vested balance exceeds $100k, your loan limit will be calculated using $50,000 reduced by the highest outstanding loan balance (on any day) during the last year. 2) When this is the case, you can ALWAYS borrow additional amounts UNTIL you actually have an outstanding loan balance of $50,000. You can borrow $1 million from the plan by consistently borrowing $25,000 and paying it off the following day; and borrowing another $25,000 the next day. You can repeat this cycle because at no point in time will your loan balance exceed $25,000. Good Luck!

I see what you are saying: the regs do not apply a cumulative effect on loans. I can borrow $25,000 today and pay it off tomorrow. I can, then, borrow another $25,000 and pay it off the day after than. I can, then, borrow (yet another) $25,000 and choose not to pay it off. The following day, I could borrow another $25,000 (which would take my loan balance up to $50,000). Why? Because at no point in time did the outstanding loan balance ever exceed $25,000. The net effect would be that I actually borrowed $100,000 in new loans; but the transactions were structured in a way that my outstanding loans never exceeded $25,000 (because I paid them off in order to prevent the new loan from being added to the oustanding balance). Your program would appear correct once you take this into account. Also remember that you must treat all plans of the employer as a single plan for this purpose. You cannot take a $50,000 loan from one plan and then turn around and take a $50,000 loan from another plan of the same employer. I know two plans for employers are not common, but this is be added as a footnote. Good Luck!