Bri

EPCRS doesn't really spell out (at least as a safe harbor method of correction) simply doubling-up next week's amounts, does it....(With an employer adjustment for missed earnings for the late week, perhaps?)

Of course not, but a compassionate plan advisor would find an out for an uptight worry-wart prospect! ?

If it's that concerning on the 30 days, why not just make the deferrals effective 2/1 but the plan as a whole (for nonelective contributions or what-have-you) effective 1/1?

Are you sure? I would think this is an overpayment. Since the basic tenet of EPCRS is "put the plan back in the position it would have been in, absent the error", I'd argue you could return the excess distributions and revise the 1099s. Would have to "think about" how to address earnings lost (or realized outside the plan).

There's a "'Cuz Stone Cold Said So" crack to be made by a wittier person than I, in the context of an Austin 3(16) question.

Obviously I'm 4 days late to the discussion (Mexico was nice) but Larry's got it spot on - just issue the check from a PLAN checking account rather than a SPONSOR checking account.

They obviously changed up the requirements - back in the 2000s it was just a matter of taking the C-3 and C-4 exams after getting the QPA. But those had essay questions to them, too, if I recall.

If the definition of compensation is full year, then the 3% for the staff needs to be for the full year. If you had used only "while a participant in that component of the plan" then you could have limited it to 3% of the last three months' worth. And if that were the only contribution, you'd have gotten away with it for top heavy purposes, too.

And if you're the participant, of course you'd rather get 4% of the full year's pay!

Are you sure you have to give 5% for top heavy for a second plan that employee's not a participant in? I can see the argument for a 5% GATEWAY for testing purposes, but not a top heavy increase for someone not eligible for both plans. Or if the plan documents say otherwise, too, in their carefully-worded meshing of the top heavy requirement between the two plans.

I know Larry's a stage buff, his allusion might not transcend to everyone

I would want to ask, how are you eligible for a $50,000 distribution from the plan at an age less than 59½? Is this other-source money such as match or profit sharing where the plan permits the earlier withdrawal? If you are eligible indeed under such provisions, then I'd double-check that the loan balance really did originate from 401(k) money (as opposed to match / PS). If so, then the fact that you have a distributable event for whatever source is going to fund the 50,000, leads rise to the potential to discharge the defaulted loan note off your balance. However, if the loan money was 401(k) money specifically, the Regulations won't let the plan to offer you an out before age 59½, so the loan would stay. If your plan does let you take the 50,000, then you certainly could remit the loan balance still due (with interest) back to the plan. The only benefit, really (since you've already had the taxable income back six years ago), would be the ability to clear your loan slate and start over with new ones. Otherwise you're just creating a taxable basis in your account.

I was wondering the same thing, six years later. Both 5500-SF and 5500-EZ indicate that the plan sponsor is signing under penalty of perjury that any actuarial schedule has been completed as well. So I think signing the 5500 earlier than the SB would be legally problematic.

Definitely not a CG - he's a smaller than 50% partner in the "big" LLC. I don't think the industry qualifies as an FSO, either, for affiliated service group consideration, too. The "side" (small) LLC is definitely the plan sponsor. Basically we're trying to figure out if the lack of a tax form from the small LLC to the sole proprietor, is enough to substantiate a salary of $0 (to keep DB funding low), or if the small LLC's K-1 received from the big LLC, is enough to state that there's income to the actual individual.

I don't know what to make of this. Client set up an LLC for himself. He's also a partner in a larger company. That LLC issued him a K-1 for his income, and then also issued his own separate (single member) LLC a K-1 as well for a separate source of income from the larger partnership. It's that "smaller" LLC that sponsors his plans. The first year, he had a Schedule C to reflect the payments from the smaller LLC to the individual. Since then (the past 2-3 years), the income is not being shown as flowing through the smaller LLC - he just received it on a second K-1 issued by the larger company. So I think that's wrong to use for purposes of funding his plans. But - is it enough for the big LLC to pay the little LLC on that K-1, or does the little LLC then need to turn around and issue a Schedule C every year? Or, is it enough that as the single member, the earnings on the K-1 (from big LLC paid to little LLC) enough to count as income for the individual himself? We're trying to figure out if the CPA needs to re-address past years' tax statements, in terms of how the payments were reported, before we get into tracking what sort of benefit he's actually due under the DB plan. thanks in advance.... --bri

-11g amendment up to 9.5 months after the end of the year.....lets you increase benefits to employees (including those not currently eligible) on a non-discriminatory manner. So pick an NHCE you like (who's also not terminated already with no vesting in such a new benefit), and bring 'em in.....

You're not going to just amend to "turn off" the Roth going forward? Does the W-2 for the employee show Roth deferrals, or pre-tax? I'd go in under VCP - tell the IRS, hey we never expected there to be Roth, nobody (other than this guy) even asked about it, etc. If all your other documentation supports the fact that the document was done with the mistake and there was no other expectation, they might give you the okay. I guess there's some difference to the appeal you'll make, depending on the rest of the fact pattern regarding how those amounts did go in.

I did just take advantage of the email address for PRA comments to the DOL embedded in those extra paragraphs. They got a small chunk of my mind, but hopefully not too big a slice.

Okay, but then how does that reconcile with Mr. Gulia's discovery above that the Federal Register version does NOT include the PRA statement?

The link from the DOL's site itself featured this, and ASC's online portal to generate the notices included the PRA statement as well. https://www.dol.gov/sites/dolgov/files/EBSA/.../form-sar-pension.docx So perhaps it was the DOL's requirement on their sample to include the PRA statement, but it wasn't supposed to be picked up by a software vendor as part of the actual notice? (I can only get so intrigued by the topic, of course....)

And of course, if he's a terminated participant, the real question is whether he terminated prior to the year he attained age 55.

You should double-check the language to see if it says the employer WILL make a 3% contribution, versus MAY make a 3% contribution pursuant to a supplemental notice issued 30-90 days before the end of the current plan year.

So hey, anyone see this new addition of a Paperwork Reduction Act notice to the DOL's model Summary Annual Report? Not sure how half a page of unrelated text reduces paperwork. Also.....is there a deadline where this becomes mandatory? It's enough of a slog to get an SAR to fit on one page after it's been generated by our software. I feel like deleting it until something more obvious and official dictates it has to , has to, be in there. What say the rest of ya? Thanks! --bri

So it's 5.5/12ths of 30,000. Seems straightforward, now..... Holy crap this question is 20 years old.....

Someone could be transferred to an ineligible class of employees, and have no current balance under the plan. Like if you start at Division B on 1/1, which isn't eligible for the plan. And you have no past balance from when you worked at Division A.