PFranckowiak

Safe Harbot nonelective 3% Nonintegrated Profit Sharing 1000 hour/ last day Immediate eligibility Hired a few people at the end of the year - less than 1000 hours and had a couple people quit. Therefore if running 410(b) on just the Profit Sharing portion, it fails 58%. Plan document has the following in the PS section. Code §410(b) fail-safe. If b.2., 3., 5. and/or b.7., 8. or 9. is selected, the Code §410(b) ratio percentage fail-safe provisions will NOT apply (Plan Section 4.3(m)) unless selected below (leave blank if not applicable or fail-safe will not be used): f. [X] The Plan will use the Code §410(b) fail-safe provisions and must satisfy the ratio percentage test of Code §410(b). So am I correct in that I cannot use the Average Benefits Test to pass and would have to give some additional participants the profit sharing contribution? Thanks Pat

Yes - sell part of their accrued vacation time to pay for medical benefits. (Not in 401k plan) What compesation is used for contribution purposes for safe Harbor nonelective contribution and other profit sharing contribution? I assume they cannot defer from it as the only way they can "sell" it is to help pay for their medical benefits. They will divide what they sell into the 52 weeks of pay. So if someone sells a week, $520. Then $10 would go to each pay period. P

I have a SH nonelectve 401k plan that is considering allowing the participants to sell part of their accrued vacation time to help pay for their medical insurance. Part of their medical insurance will also be deducted from their pay in 2016. What options do I have for compensation definitions? Thanks Pat

Thanks, thats what I thought.

I don't know the termination date yet - but it will be before the end of the plan year which is a calendar year.

Employer is terminating the plan. They want to give the match for the people say through 11/15/2015. The match is discretionary with a 1000 hour last day requirement. Any problem with amending the plan to remove the 1000 hour last day requirement? For business reasons they do not want to wait until the end of the plan year, but want to give employees the match they told them that they would do. Just want to make sure that I have all the questions that might come up in a meeting I have. Thanks

Controlled Group 1 401k Plan Sponsored by Company A includes Company B as a particpating Employer. Company A was Sold and Plan will be terminating. Company B ownership changed so that it is now a part of a different Controlled Group 2, which has its own plan. They want Company B to become a Part of Contolled Group 2 401k plan ASAP. So I am looking at this as a spinoff and transfer into the other plan. Participating Employer Agreements, Board Resolutions checking new plan for protected benefits etc. They want to try to not have any payroll withholding missed. Not sure if that is possible. Assume both plans definition of Compensation is Total Compensation and that this Spin off and merger takes place in December. How do you handle ADP testing and what compensation is used? I do not have any details yet, but want to know what questions I should be asking besides dates etc. I know the end desire is that they want Company B moved to the Controlled Group 2 401k plan before the end of the year. I know that the test may fail and will have refunds. Thanks, just want my list of quesions before I go into a meeting with the client. Thanks

I tried reading it - but it was confusing. No part of floor offset. Just want to make sure we don't have to watch any limits if participants get carried away and invest a lot in the Employer Stock. Thanks

I am trying to figure out the limig of Employer Securities is a 401(k) Plan. Participant Directed Accounts Participant may elect Employer Stock in Self Directed Account Can transfer anytime. Many other investment options are available. non-public company I see that the 10% limit of plan assets does apply But I see something that limits the amount of stock held by the plan to 25% of the stock issued. ER wants to add, I want to make sure we cover all the potential problems. Employees are well educated, so ER does not worry about communicating to the employees the risk of putting retirement money and their job all in one. Ideas? Thanks P

Buy our system does not let us put in cents on the 5330 form to report interest. It rounds it to zero. The interest is 10, the excise tax on the separate interest is 15% of that.

Very small plan, very small amounts, Under $200.00. Total Interest calculated for the 5 late deposits was 10,00, but then that is spread out over the 5 deposits, with the largest interest amount .49. So, since then don't let you put less than a $1.00 in, Then they all round down to zero, with zero tax due.

Thanks - but my amounts round down to zero excise tax on the 5330, should it still file it with zero tax due? Pat

I have a takeover plan that had late contributions due to a change in payroll company. By using the DOL calculator all of the earnings for the missed deposits are small and the excise tax is under fifty cents. Since I have to list each week separately, the excise tax then is zero. Do you file a 5330 showing no tax due? or do you put something in so you can pay the small penalty and have it filed. Not sure then how to indicate on the 5500. Client would like to just deposit the earning and the small excise tax to the employees accounts. (It amounts to less than $10.00 as the amounts involved are so small. Any suggestions? Thanks

As Always it's the small employer that gets the bad end of the deal. This would never hit larger employers that aren't top heavy, but really can hurt the small Employer that is top heavy because he has only two other employees. He has just added the Safe Harbor Plan, was previously just a Profit Sharing. Now his choice is to use forfeitures for fees, or fall into a problem with top heavy due to the forfeiture reallocation. Therefore, most small employers are not going to have additional allocations, unless they will put enough in to cover top heavy. Actually is less for the employees.

Have a large controlled group of ERs in a 401(k) plan - 0ver 100 participants Have another controlled group of ER's that does not fit the Controlled Group rules to join the first group as a related ER. But has some common ownership. What are the benefits of keeping the plans separate or setting up a Multiple ER plan. I know that Coverage, Top Heavy and ADP/ACP testing must be done separately for the Related vs the unrelated. I know it will be complicated to separate out as some Employees will work for both entities. Benefits might be one Audit, One 5500 Anything else I should be looking at? Pat

We have an Unsigned DRO that was presented to make sure the plan name was correct before it was submitted to the judge for signature. The Alternate Payee died before it was signed by the judge. 401(k) Plan. Divorce was final in May 12th. They were in the process of submitting to the court, not sure if it is at the court waiting for signature. Any thoughts? Pat

Thanks. One more question. Person retires at 67, gets an allocation due to retiring after 65. rehires 68, then quits again - I guess it's a second retirement after 65 s0 another allocation. (This could happen each year - quit and then want to come back because they are bored or need money) Retail and they tend to rehire - so I want to simplify things.

Have a takeover plan that has 1000 hour, last day, except disability(total and permanent), death, NRD. Profit Sharing. I want to remove disability from the restated plan as sometimes you don't find out right away that it is total and permanent. Also NRD. We don't have in any of our plans, does this mean only in the year they retire they would get a contribution, or if a participant has the met eligibility for the plan, once they reach NRD age, they are always eligible to receive an allocation ? A Person goes to PT( under 1000) hours, would they get a contribution for each of the years after turning 65, or only in the year they actually retire. Any problem removing this upon restatement? Thanks P

We received a "Sample DRO" for approval prior to submitted to court for judges signature. It awards 50% to the Alternate Payee. Participant wants Hardship for the rest of the money. Our QDRO procedures allow the Plan Administrator to put a hold on the participants account. 1. Participant needs money for principal residence. Any way to allow to get his 1/2 prior to the final DRO which allows us to segregate the account? 2. In order to maximize the hardship available for the participant, can the DRO pay out of just EE, Deferrals or must the 50% be taken from all sources pro rata? Does the basis used to calculate the hardship available get prorated by 50%? Thanks P

Large Plan Revenue Sharing accually gets deposited into the plan. Fees are then paid out of the plan 1. Fees are more than the Revenue Sharing. Would I show the Revenue Sharing coming in under Other income and the Total Fees coming out. Say Revunue Sharing is 5,000. Fees are 7,000. Would I show the entire 7,000 on the 5500 as fees and also on the Schedule C or just the Net amount? 2. Say the Revenue Sharing is more than the fees - say it was 10,000. How would that be reflected? This is the first year we have a plan the actually deposited Revenue Sharing to offset Investment fees and/or Adm fees. Any suggestions? Pat

That is why we filed them in the past, now I am just seeing what people are doing now as I have a few new ones. P

HCE 1 60% owner of Company A, HCE 2 40% owner of Company A Company A has the plan. HCE 1 I think 100% owner of Company B P

Company A, owned by HCE 1 and HCE 2 has a 401(k) plan that allows for SD Brokerage Account. Company B, LLC owned by HCE 1 (In business to loan money for start up companies) HCE 2 wants to invest in a note from Company B in his SD Brokerage Acount. P

Small 401(k) allows for Self Directed Brokerage Accounts HCE 1 Owns Business that has 401(k) and also an LLC (That lends money for business start ups) HCE 2 (over 5% owner of ER sponsoring the 401(k) (also a trustee of 401k plan wants to take part of his SD Account in invest in LLC owned by HCE 1, which is a loan that pays interest only and then principal after 5 years. Broker does not think its a Prohibited Transaction as the loans are to other companies. Prohibited Transaction???? Thanks P

I the past we have always file a 5500-EZ, regardless of the amount of plan assets. Last year one of the clients forgot to send his in. No harm under 250,000. We are rethinking whether or not we should file this client this year 2012 or just not file at all until the final return. Also looking at the few other ones under the 250,000 asset value to determine if we should file this year or just stop filing. What are the rest of you doing? Thanks Pat