PFranckowiak

Now since they know they can exclude a few, now they want to exclude more. They only want to cover about 1/2 the employees as they other 1/2 are not considered long term, are they until a project is finished after a few years. So they will meet the one year of service currently in the plan. But if no HCE's, no testing, no problem. I did tell them if one EE snuck into HCE because of some taxable income that isn't regular pay, it would blow all the testing.

401k Plan with PS only (no match) Client wants a design to benefit some more than others. NO HCE's by ownership or compensation. Want Group A to get 10% PS Group B to get 5% PS Group C to get 0% PS 1. What do I have to look at? Does it matter how many are in each group? 2. Is it better to exclude Group C (smallest number of EE's) from the plan by definition or just exclude them from the PS by definition. No HCE's in plan, plan is not Top Heavy.

Assumption: All participants except HCE's terminated employment 2/28/17. (Company Bought out - new company took employees and business, but not plan or corporation) Existing Corp will continue until 12/31 as owner finalizes everything. Owner wants to make PS contribution for the year. Owner already put in $24,000 deferral - So cannot terminate plan as of 2/28 due to 415 limits. Assuming the NHCE's compensation is $110,000 for 2 month year they worked. 5% (SH and GW) is $5,500 Owner anticipates Compensation to be around $50,000 for him. If we continue the plan until 9/30. 415 Limit would be 54,000 x 9/12=$40,500 HCE max ER contribution would be $40,500-$18,000 =$22,500 Maximum Contribution limit = .25 * (110,000 +50000) = $40,000 $5,500 +$22,500 =$28,000. If we can pass Average Benefits Test - is there anything else I am missing? I want to try to terminate the plan before 12/31 so that participants can get paid out before year end.

In January 2016 the Employer contributed 5,000 as deferral for a HCE individual that was never withheld from his pay. We caught it at year end comparing the total deferrals for the year to w-2's. To correct, we need to take the $5,000 from his account. I assume we need to take earnings also . If we use the 5,000 as a part of the discretionary matching contribution at year end, what do we do with the earnings? (we are estimating about $700) I cannot see how their accounting department never caught this.

Company was sold. All employees except the owner are terminated at the end of February. The owner is keeping corporation active until the end of the year. New company did not take over plan, nor corporation, but in hiring some of the employees to work for them. Plan is cross tested. 3% SH 2% Gateway. Owner wants to max out for 2017. He has some income from shutting down the business and will continue to pay himself. Any problem with giving the employees their 5% on their 2 month salary and the owner getting maxed out at year end. He wants to deposit the 5% so that participants can get paid out. So if he continues until the end of the year, we avoid the Short Plan Year reduction in the limits? Am I missing something here?

Safe Harbor Definition of Hardship Participant provide a notice of failure to provide rent. He also provided a letter from his bank providing the routing number. This letter states its a joint account. List names of both the tenant and the supposed landlord with the same address as on the eviction notice. Employer thinks he wants money to purchase something and that the notice of eviction is "fake". I have a problem with the joint bank account. It appears that the Tenant and the Landlord are both using the same address and live together. Upon further investigation - Landlord is also his Mother and beneficiary. Do you think that this qualifies?

I have looked at it two ways. 1. Taking the Balance at the end minus the Balance at the first date. (then add earnings to payout. 2. Otherwise taking the balance at the beginning date and giving that earnings and then a "new" account that includes contributions between the dates and giving that earnings. Taking 50% of the account that has the contributions to the Alternate payee. Difference between the two is the earnings on the Balance as of 12/1/05. Does the alternate payee have a right to 50% of those earnings?

It says the alternate payee gets 50% of the Account Balance Accrued between 12/1/05 and 9/1/16. The participant has an account balance of 10,000 as of 12/1/2005. Is it a simple calculation of taking the AB as of 9/1/16 minus the AB as of 12/1/05 and taking 50% of that? Or do we separate the Participants AB as of 12/1/05 and the Participant keeps the earnings on that. Or do we reject it and have it clarified?

What code is used for a Post Tax Distribution basis that is being rolled to a Roth IRA? Thanks

Thanks

We administered a plan in 2011. Went to another vendor. We just got the plan back with a new investment advisor. The plan investments will be different as well as the models. How is the best way to set up in Relius? As a new Plan under the ER or should I roll forward the old plan six years? About 25 participants. Since investments have changed, would it be cleaner to set up as new plan? Daily Valued plan.

HCE participant with a Self Directed 401k account took money out of the plan and then put it back in two months later. Not 59 1/2. Is this correctable through VFCP? He needs to put back the money plus interest. Anything I am missing? Pat

I think your 6a count should be 124, if your line 5 is 124. If the employees entered the plan on 1/1, they are participants as of 1/1 and in the beginning of the plan year count.

Thanks - they were on as an A in prior years before 2015 and we are just cleaning it up as all were paid during 2015 and 2016. All on the form will be Ds in 2015 and 2016, so I think I will just combine them and put them all on the 2015 and be done with it. Thanks - I didn't explain clearly, I see where I put a D where it should have been an A! P

Tom- they were reported as D in the past. Plan terminated and participants paid out in 2015 and 2016. Can I put the D people for 2016 (short year) on the 2015 form, or do I have to do a form for the short year too? Will the IRS Fire system accept the short year form for 2016 on a 2015 form? Thx P

I need to remove people with a code D? Some were paid in 2016, would like to put them on the 2015 form as being paid with a D so I don't have to file the 2016 form.

I have a plan that terminated and I need to file an 8955-SSA for 2015 and then the short plan year 2016. Can I just put all the D's on the 8955-SSA for 2015 and call it good? or do I have to file two forms. Will the IRS system except an 8955-SSA for 2016 on a 2015 form? Thanks P

That's where I was going - I think its a fiduciary violation too, but sitting where I am, not much we can do except point it out to them. Not sure where to get any language to see how long they can hold on to a check before doing something with it. Not sure if the new plan has a default fund. If it doesn't maybe they need to add it.

Company was bought out and the Plan is terminating. All checks have been issued. Some participants elected to transfer money to their new ER's plan. New ER HR department has been sitting on some checks since February waiting for the participant to complete an election form for the Rollover money. The Checks are only good for 90 days. After 90 days the checks would need to be reissued and incur a fee for reissue that would be charged to the plan participant and the Cycle would repeat. If they don't get this resolved can we just send the participants to a Rollover IRA or are we stuck in this loop until they complete the form the new ER says they are missing? We just asked about a default fund or maybe the participants already filled election forms for their deferrals, but in any case they aren't accepting the checks. The HR person seems not too concerned that they have held the checks for two months. Any suggestions on what to do to get the money out of the plan.

Thanks so much Tom - Was fine last year until they added young son. Appreciate your help!

So if I split into two groups and Group 1 is the Accrual Basis - Ebar testing and all the NHCEs in that group have an EBAR higher than the HCE - then am I correct in that I don't have to pass the Average Benefits Percentage Test? Its the Average Benefits Test that fails due to the HCE son.

3 HCE's (1 21 year old son of owner) 40 other EE's 1 Older HCE's want to get maximum The other just minimum gateway. Son only 5% minimum gateway Each EE in own group Tested together fails Average Benefits Test Can I restructure into two component Plans? 1. 2 HCEs and 30 NCHEs 30/40 / 2/3 = 113.6 2. 1 HCE younger and 10 NHCEs 10/40 / 1/3 = 75% Or 1 1 HCE and 10 HCES - Average Benefits Test (Only HCE that wants to have max) 2. 2 HCEs and 20 NCHEs - Ratio Percentage Test Test Group 2 - safe harbor allocation % as all get Minimum Gateway Test Group 2 - Average Benefits Test Am I missing anything? Other tests? Can I just set them in two different divisions on software and test each division separately? Thanks

I have a copy of the K-1 with a number - say 200,000 in line 14A Line 20 has an amount that is medical insurance payments - say 5,000 Then the client gave me the 1/2 self employment tax from the 1040. They are also said the line 14A includes LTD and LTC Premiums. and gave me a reduced number that didn't include that. Not sure what to use for compensation, as I have never been given a reduced number in the past. Any ideas? Pat

We don't pitch stuff - we box it up and drop it off at the clients and telll them they need to keep it. I keep for several years past when we lose a client and then we box it up and give it to them.

I have asked participants to look for past copies of their tax returns for a copy of the 1099R. Sometimes people have kept stuff that long. I think it's the problem with the SSA and not taking a participant off when they were paid out. I did have a partiicipant find the 1099R and that solved the problem. Not sure if IRS keeps copies of 1099R. Could contact the DOL and not tell them the clients name and ask if they have any suggestions on how to get past records.