pmacduff

Husband owns 100% of his and she owns 100% of hers...aren't they both "deemed" to own what the other owns?

Here's the situation: husband owns 100% of his company with existing qualified 401k SH 3%/PS plan and 2 NHCE non key employees wife starts new company has one NHCE non key Wife and any of her employees (as they become eligible) will all participate in husband's existing plan. Companies are completely different types of businesses and they do NOT share NHCE employees. Both husband and wife have self-employment income only each from their respective business. For Sch C purposes for the NHCE $$ deduction, does each of them deduct only the portion of the contribution that goes to their NHCE(s)? Does it matter as long as no NHCE contribution is deducted more than once?

FWIW our plan loan policy states that loans are available to "active" participants, so IMHO someone on leave would not be considered "active".

I agree about the Relius support - however we are switching from Relius to FT William for Admin software and unfortunately no longer have Relius support. We are in the process of moving all plans over but this issue came up on one plan that is done semi-annually. All the data was in Relius - the plan will be moved after the processing - so I may as well go ahead and load up manually. thank you for the comments.

No - never active - the participants left before the plan entry date(s) as you mentioned. They are now entering on rehire and I've had to hand code their plan entry date as the rehire date. Guess I'm stuck with that....

Funny you should post this question...we had a former client Plan under DOL audit. DOL person had questions on the whole background; called and spoke with us. My boss specifically mentioned that we had no ERPAs in the office and was it ok to talk to us anyway? DOL person first asked what an "ERPA" was and then said that it was fine for him to talk to us! Who knew!?! BTW - we are ASPPA designated in our office, just no ERPA.... Don't know about your signing/filing question, though.

Ok Relius users....when you have a situtation where a participant is a rehire and immediately enters the plan on rehire date; is the only solution in Relius to hard code that date since it is a date other than the normal entry date? I have a plan with a number of people eligible on rehire and was wondering if there was an easier way than hard coding them all. thank you in advance.

I'm with ERISAtk....I'd use the benefits paid section. If I have to make an adjustment in a subsequent year I like to use the same category for tracking purposes.

Don't know if this will help but we have a client with a PSP that pays out 70% of the prior balance upon retirement (age 62 in this Plan). The remainder of the account (30%) is paid out following the next following PYE and adjusted for gains or losses. It seems to work well because the older participants are the ones with the large balances. I realize it wouldn't help if you have participants that are much younger but still have large balances...but that not the norm in our small plan market!!

we used to do all of them in our office years ago, but now don't have anyone "ERPA" designated in our office. Our local agents go to the client offices now. That being said; many times the auditors call us with questions and requests for information; I think because they know us and most of the time the client doesn't know what they need or want or where to find it!

others can weigh in, but I believe they are reportable - just not subject to the 10% excise tax if the participant is under 59 1/2. Still subject to ordinary income tax because that was never paid on these funds.

FWIW - we don't necessarily "recommend" that, but in the situation Austin describes (of total and permanent disability) we've been asked if there was a better way (than taking all the cash out of the Plan) because they will not end up owing taxes as T & P disabled. Even though the participant will more than likely get a refund of any the upfront withholding, would like to avoid it if possible. Rolling to an IRA account allows them also to take only what they may need. That way they will only have to report what they take out, which perhaps is not the entire amount.

anyone else try logging into the IRS FIRE website today? I've been trying since this a.m. with no luck. It keeps telling me that the site is having "connection" problems and to try again in a few minutes. I know I can call but thought I'd first see if anyone else was having an issue.... Thx in advance!

my thought was also the fact that this employee was from an affiliate. Is it possible that coming from the affiliate the employee should have been in immediately? Without seeing your actual Plan Doc, it's difficult to diagnose... As others have mentioned I would also check the definition of compensation in the Plan Doc as it relates to match and if it is defined as "participation compensation" or plan year compensation or some other definition. Your 401k provider certainly should give more information than simply that they are telling you this is required. If not - once this issue is resolved you might want to seriously considering changing providers. good luck and let us know how it turns out!

We had one where the participant agreed through the court to turn 100% of her 401(k) balance over to the Employer which did reduce her sentence. As many have already mentioned, since the plan did not allow for assignment of benefits under any circumstances, the check was actuallly issued to the participant. It was mailed to the attorney's office where the check was endorsed by the participant back to the Employer. Seems like things could still go bad with that scenario i.e. if the vendor mistakenly mailed the check to the participant's home address or something! On a side note - we had a plan with a participant killed by her spouse (who was listed beneficiary). Spouse was convicted (life sentence) and jailed. Trustees of the plan split the account balance between the 2 surviving children and decided that if someone wanted to create an issue in the future they would cross that bridge if they had to. My thought is that you would think qualified plans could have some way to address these types of cases. I believe wholeheartedly that the Employer should be entitled to the $$, especially since a civil case might drag on forever and there's a good chance the Employer may never see any of the stolen funds. (can't get blood from a stone as they say) On the other hand if an Employer were to falsely accuse someone just to avoid paying out the Plan funds, I can see that nightmare as well.

Since the OP doesn't say what industry - I would caution that "alittle knowledge is a dangerous thing" and would want to know who is researching the "retirement plan administration questions"? Are you a TPA firm or are you a Company looking for retirement plan reference materials for an HR Department or something along those lines? I do agree that Sal's book is invaluable, but think that unless you are in the retirement plan industry you may not know what you really need to ask to get the answer you need. my cautionary 2 cents!

ok - please help me out with a brain freeze...safe harbor nonelective 3% plan with only 401(k) deferrals and safe habor NE. Plan gets the top heavy "pass" because it consists "soley of employee deferral contributions and safe harbor contributions". Top heavy is determined at the end of the year for the next year; would have been TH in 2011 but for the free pass. The owners retired and the son has taken over. The plan year is calendar but the Company fiscal is off calendar. The son has decided he may want to utilize the discretionary profit share option in the Plan. I know that if he does that will eliminate the top heavy free ride. We already know that 2012 is safe harbor but if he decides to put a PS contribution in for 2012, the plan will be considered top heavy because the top heavy calc at the end of 2011 for 2012 was 62.98% ...agreed?

I actually had a problem with this issue on one of my large clients. I receive monthly census data and import that all year long and then compare totals to the annual payroll data (W-2) at the end of the PY for a double check. At that time I go through and recode the retirees and early retirees so that I can be sure they get an allocation (from termed" to "retired". Anyway - for 2011 the client had an issue with the monthly files they were sending, so when I went to reconcile at PYE with the annual data it was all off. A nightmare needless to say, but I ended up having to do a lot of reimports of data. This overrode the status on 6 of my retirees and early retirees back to "terminated" and the system did not give them an allocation. Thankfully this was discovered quickly and rectified and this is a tax exempt entity - no issues with the deduction (or missed deduction for those 6!). We are switching to FT William for Admin and I hope these types of things aren't a problem for them!

But what happens if the rehired persons terms a few years down the road and gets paid out right away this time? Rather than have to track and remember that they need to be removed on the SSA, I think it makes more sense to remove them upon rehire and then add them again later if necessary. Again - that's just my opinion and I only work with DC Plans and have no frozen plans.

FWIW my interpretation is that the Code A is for those "entitled to a benefit". When someone is rehired they are no longer eligible for that benefit per the Plan until they reterm. I code the rehires with a "D". (I'll add that I only do DC work!)

I would go back to the plan loan provisions. Are there any restrictions in the plan loan policy? If there are none and the loan fits all of the loan criteria as specified in the Plan. And - if the participant makes all of the repays per the plan provisions and regs, I don't see a problem. my 2 cents.

Under 1563(e)(5)(B) - Mom IS an employee and officer which does create the attribution, B is part of the CG.

We had a similar situation about 9 years ago. The balance reported by SSA was about $600 if I recall. (and by the way - the letter from the SSA to the participant says " you MAY have a benefit in XYZ Plan"). (emphasis mine). It does not state that there is definately a balance due. That being said in our situation we did try to find records but to no avail. We asked the participant to check his own personal tax records & we never heard from him again. (Lucky - I know). Can you check with the investment provider or with the IRS for the 1099-R as mbozek suggests?

ok - 1099-R question on this child support payout...The the 1099-R form will be issed to the participant - is it coded with a "2" so that the participant does not have to pay the 10% exicse tax for under 59 1/2? I know the when the payment goes directly to the Alternate payee that code can be used, but this $$ is going to the State.

Well ERISAToolkit may have hit the nail on the head. The auditor said he wanted to talk to the client about elapsed time. I'll let you know the outcome when I find out.