R. Butler

Church personnel policy references making a SEP-IRA contribution for the minister, but no other church employee. I have not seen the actual SEP document, but I don't see that they even a church can do that within a SEP. Am I missing something? Thanks in advance for any guidance.

I'm looking at a church personnel policy policy just as a favor to a client. I work only sparingly with churhc plans and less with welfare plans. Sick pay is limited to a certain group of employees. Even if the group consitsed primarily of the "highly compensated" employees and "non-highlys" were predominantly excluded, assuming the church did not elect to be covered by ERISA, I'm not seeing that there would be a problem. Am I correct in that assumption? Thanks for any guidance.

Participant has life insurance. Participant terminates and ownership is transferred to him. (There were probably better ways to handle the insurance, but it is done & we can't revisit that decision at this point.) He has elected to rollover the rest of his money. Generally tax is withheld on based on the value of the insurance. Since he has elected to rollover his other investment money is there a legitimate argument to forgo the 20% withholding that is based on the life insurance? I know that it is a taxable distribution, but many vendors will not withhold on outstanding loan balances when the other assets are rolled over. This is somewhat akin. Thank in advance for any guidance.

Plan has been a large plan filer for years. The recordkeeper holding the assets charges a check fee which is not waived for nominal balances. At the end of 2012 there were 4 or 5 terminated participants for whom a small true-up is due or who received a nominal forfeiture reallocation. In each case the allocation is less than the check fee. Jumping forward to 2013, this plan will be right around 100 participants at the beginning of the year. Is there a plausible argument that the 4 or 5 terminated participants can be excluded from the beginning of the year participant count? Again these participants will never see that money due to the check fee. Thanks in advance for any guidance.

Employer fails to withhold on bonus. Employer is making the corrective contribution at 1/2 the rate of each employee's election percentage. The question is in regards to the match. The plan has a basic safe harbor match determined over the plan year. Should the match be calculated as if the employees had made the full missed 401(k) or just calculated using the corrective contribution as deferral? It seems to me that in this instance the proper correction would be to calculates as if the employees had been made the full deferral, but really can't fnd anything directly on point. Thanks in advance for any guidance.

Was having a discusison today about commercial locator service versus the SSA letter forwarding program. What types of information do private locator services have access to that the general public doesn't? How are they linking the SSN with the correct Joe Smith? Thanks for any guidance.

I'm sure that this topic has come up before and I am just not finidng it. Plan has been in existence for 20 years and never filed a form 5500. Plan sponsor probably has sufficient data to file for the last 10 years, but no chance they have data 20 years back. I'd like to help them, but I'm not sure how to proceed. Has anyone had this circumstance? I'm wondering if plan sponsor can file as far back as records permit and then hope for mercy if the DOL asks for earlier filings? Any guidance is appreciated.

It has a 401(k) component to which both owners contributed so I'm not concerned with the IRA issue. They had some large expenditures this year and a profit sharing contribution was not made for the first time in a while. They were hoping to show the employees some appreciation by forgoing their allocation & just having it split among the rank and file. We will probably ultimately just recommend, as you suggest, that they follow the terms of the plan. It is just the better policy. We were researching further to cover all our bases and really hoping that we would find something that says they'd be okay. Thank you for your thoughts.

Plan document provides that forfeitures are added to the employer profit sharing contribution. Plan sponsor decided not to make a profit shairng contribution so they profit sharing allocation is the forfeiture. The HCE's ( the 2 owners are the only HCE's) want to opt out of that allocation and just have everything reallocated to the other employees, Technincally it doesn't follow the document, but I guess I just don't see a consequence. Would an IRS or DOL auditor really come in and force corrective action that results in the two owners getting additional allocations? I don't see that happening. Any thoughts are appreciated.

We have a plan with key man insurance as a general asset. Key man dies at the end of 2012, death beneift collected in 2013. A couple of issues: 1. This is the only plan that I have seen this type of plan investment. I assume that the difference between the death benefit and the policy's cash value is just gain. Am I correct about that? 2. Assuming that I am correct that it is gain, is it 2012 gain or 2013 gain? This is a little more difficult for me. I want to call it 2012 gain, but if mutual funds are held as a pooled asset we don't count dividends as paid on the date of record, most of the time we wouldn't even know the date of record. We generally count dividends as gain on the payment date. Thanks in advance for any guidance.

Plan is switching new recordkeepers. Plan has existing loans. The new service provider is telling plan sponsor that they can reamortize the loans unilaterally rather than just continuing existing loans as is. I've never seen this before and can't find a basis for it. The new recordkeeper can't really provide me a basis for that conclusion except that it can be done. Can anyone provide me a basis for allowing a reamortization?

Employer wants to essentially treat it as a bonus. Their plan allows participants to defer up to 100% of any bonus and he wants to give the participants that flexibility.

We are tpa for Co. A 401(k) plan. A health insurance company incorrectly told Co. A's employees that the insurance co. that they could reduce 2013 deductibles by medical expenses paid in 2012. In an attempt to make things right the health insurance company is going to pay the employees the amount of their unused deductible in 2012. They cannot pay the employees directly. Thye pay the employer who in turns pays the employees. The employer has determined that this will be run through payroll (similar to a bonus) and included on the W-2. (That doesn't seem correct to me, but it is not really somehting that we can advise them about.) Given that the employer is treating this as W-2 wages should the employees be allowed to defer to the 401(k) plan? Just given the way the employer has decided to treat this it seems to me like this will be treated the same a s a bonus payroll. Thanks in advance for any guidance.

Can hardship distributions be taken from the SIMPLE match source in a SIMPLE 401(k) plan? I don't see anything that specifically prohibits it, but it seems that that source is akin to a safe harbor contribution or QNEC. Thanks in advance for any guidance.

I agree with QDROphile. Just from the limited facts it looks as much like a depsoit and a rental agreement as it does a purchase.

Took over a plan that failed ADP in 2010, but did not make refunds. Plan was also top-heavy, but the required minimum contributions were not made. They will correct the ADP by issuing refunds and making a QNEC contribution of the same amount. Can that QNEC be used to reduce top heavy minuimums for 2010 also? Thanks in advance for any guidance.

Co. A will be purchased by Co. B in a stock sale on 10/01. We found out today. Co. A has a 401(k) safe harbor plan. Can they freeze the plan at 09/30 & maintain safe harbor status for the short plan year due to the acquisition? The Co. A employees will become immediately eligible in Co. B’s non-safe harbor plan. Co. A’s plan won’t be terminated because of successor plan questions that just can't be resolved in less than a week; it will just merge into Co. B’s plan at some point. I'm fairly confident that a safe harbor plan can be terminated mid-year & maintain safe harbor status if the termiantion is due to a business acquisiton, but I do not know that it can merely be frozen and retain safe harbor status. Thanks in advance for any guidance.

for profit hospital is a wholly owned subsidiary of a non-profit health system. Employees transfer employment from the subsidiary to the parent. On its face it seems to me that this is a controlled group and as such no severance of employment entitling the participants to distributions. Am I missing something? Any cites and guidance will be appreciated.

Plan sponsor is filing a VFCP application for several late deposits. Two of the late deposits were remitted later than 180 days. Provided the plan sposnor meets the PTE 2002-51 requirements for all of the other late remittances can the excise tax waiver be claimed for all but the 2 dpeosits remitted outside of 180 days? Thank you for any guidance.

I understand that the ESOP shares aren't attributed to the participants, but what if voting rights pass through to the participants. Could those pass-thru voting rights push a participant into the HCE category?

Don't do much with DB plans; I'm trying to understand this floor offset arrangement. I understand the concept; I don't understand how the following passes muster: HCE 1 is 47 earns $225,000 and gets DB deposits of $198,249 HCE 2 is 44 earns $40,000 and gets DB deposits of $180,561 All NHCE's get a 5% profit sharing contribution and no benefit under the DB plan because the DC supposedly offsets. NHCE 1 age 55 earns $25,000 NHCE 2 age 41 earns $30,000 NHCE 3 age 29 earns $55,000 NHCE 4 age 38 earns $78,000 NHCE 5 age 60 earns $35,000 NHCE 6 age 34 earns $30,000 I can't get a ross-tested plan to work all that well with this group; just curious why the floor offset works so well here. Thanks in advance for any guidance.

We currently sponsor a Corbel prototype. Beginning with the PPA restatement we are considering scrapping the prototype & sponsoring the Corbel VS instead. Does the prototype offer any advantage over the VS that might cause us pause? Just want to make sure that we are not missing anything. Thanks in advance for any guidance.

Managament Co. provides management services to several restaurants. Trying to determine which companies should be part of a management group. Management Co. Owned 100% by Person 1 Co. A Owned 85% by Person 1; 15% by Person 2 Co. B Owned 35% by Person 1; 35% by Person 2; 30% by Person 3 Co. C Owned 100% by Person 1's sibling Co. D Owned 50% by Person 4 and 50% by Person 5 Co. E Owned 25% by Person 1 and 75% by Person 1's sibling (Different sibling from the Co. C owner) Assume Management Co. derives 20% of its revenue from each co. If that assumption is correct then I think the Management Co., Co. A, Co. C and Co. E would be part of the group. I can include Co. A, Co. C and Co. E because siblings are family under §267. I do not see that I could include Co. B or Co. D. Person 1 would need 50% onwership to bring Co. B into the group & Co. D's owners are unrelated. Am I analyzing this correctly? Thanks in advance for any guidance.

Calendar year safe harbor 401(k) plan has a profit sharing provision. No hours or last day requirement. Plan sponsor wants to exlcude a handful of HCE's from a profit sharing alloction. I don't see that they can do that in the current plan for 2011. Is there anything that prevents them from adopting a separate profit plan for 2011 with the proviisons that thye want and then merging the two plans at together a later date? I don't see anythat anything prevents this, but want to cover all bases since essentially the new plan plan is only being adopted because the current one can't safely be amended. Thanks for any guidance.

We currently sponsor a Corbel prototype document. We are cponsidiering a VS doucment instead of the prototype with the next restatement. Any reason not to sponsor the VS instead? Thanks for any input.