pmacduff

The Plan is a Schedule H filer. We did validate the form through the software vendor prior to filing. I'm attaching the answers to Schedule H, question 3, and I've redacted the Accountant's name and EIN for privacy purposes. These questions are answered the same way that they have been for at least 10 years, maybe longer. The plan has been in effect since 1992. Schedule H line 3.pdf

Client received an EBSA letter today that the Plan's 2017 5500 form filing was rejected for lack of the Accountant's opinion. I went on the EBSA website and the filing is there and contains the correct forms and Accountant's report. The letter tells the cient to file an amended filing including the report and then notify them that the amended filing has been posted. Anyone else hear of such a thing?! (edited for detail)

Hi Tom - We are processing a refund to the participant - I was referring to whether or not to leave the deferrals in the ADP test, not leaving them actually in the Plan , sorry I wasn't clear! I'm also trying to figure out that if it IS ok to leave them in the 2018 ADP testing, then is the participant entitled to the 2018 Employer match on those contributions and if so, are the match contributions then forfeited because the participant in essence won't have deferred anything for 2018?

It is a NHCE participant and two completely separate Employers/Plans. Our client would have no knowledge of the excess if participant had not come to them for the refund. The plan we administer fails ADP miserably every year. Of course taking out the contributions for this NCHE causes an increase in already large refund amounts. Kevin C since the participant did not exceed any Plan limits in our client's plan we are free to leave the deferrals in the Plan and test them there? In addition, the plan has an annual discretionary match contribution which has not yet been deposited for 2018. If the deferrals are in the ADP for 2018 shouldn't this participant still receive 2018 matching contributions on the 2018 deferral contributions that the participant made? Are those match contributions then forfeited once the deferral contribution refund is processed? thank you for all replies!

Participant has informed my client that they are over the 2018 402(g) limit because they did the maximum deferral at their other job. Participant entered my client's plan as of 10/01/2018 and deferred a small amount. The participant has requested this small amount of contributions be refunded as excess. As far as the 2018 ADP testing in my client's plan, do I need to remove the deferrals for this person from the testing? I know that I would have to remove them if the overage was all in my client's plan, but am unsure of the process when there was no excess, only the request of the participant. Thanks in advance!

35 - can't even remember when we last saw 35 - right now it is 6 but feels like -15 with the wind chill --------------------------- Yes - I'm hopeful that change to the RMD rules goes through because we have a lot of small employers where that change will be beneficial.

Yes - my thoughts exactly - just didn't know if it was spelled out anywhere. BTW - how is the weather in Fla? We're expecting below zero temps with the wind chill here in NY later today and through Thursday ☹️. Must admit it makes the Spring that much sweeter!!

Thanks Tom. Now the other question would be does that have to be the same year-to-year? In other words, can you use an accrued balance once year and cash balance the next?

Pooled funds balance forward Profit sharing plan has an active owner who took his RMD for 2018 and then rolled the rest of his balance to his IRA account. He still takes a small salary so there will be a new balance in 2019 due to the 2018 profit share allocation/deposit done in 2019 (some time between now and 03/15). I believe that RMDs can be computed on a cash basis and his balance as of 12/31/2018 was $0.00, so in theory the 2019 RMD would be $0.00. He will have a balance as of 12/31/2019, however, so RMD would again be required for 2020 anyway. OR - because the plan is reported on an accrued basis including the 2018 profit share allocation is the RMD required for 2019 as he has an accrued balance as of 12/31/2018? I assume if he rolls his 2019 balance once the ps deposit is made, then the RMD would have to come out prior to the rollover?

Thanks Tom. I usually clear overrides when I update and create a new plan year because that seems to be cleaner and I don't end up with unexpected things ? I did check and under the "otherwise excludable" option in the census for these people and it shows as "No". I reviewed their hours/history and at no time did they exceed 1000 hours in a plan year. I figured I could override the option in the census but didn't want to do that if I was missing something and they could only be otherwise excludable for the first 18 mos after hire.

I have a question again on "otherwise excludable" but this time in relation to cross-testing. 3 month wait for deferrals, 12 months 1000 hours for match and ps. There are people who have never worked over 1000 hours but have received top heavy contributions over a few years. They are receiving the top heavy for 2018. Are these people still otherwise excludable? The system is only excluding those who haven't yet met the 1 YOS, 1000 hour requirement. Those who have been there a few years are not showing as otherwise excludable even thought they have never met the 1 YOS/1000 hours allocation conditions for employer match or regular ps. Since they are receiving a top heavy allocaiton do those folks need to get the extra 2% to bump them up to the gateway?

ok - I did not mention that the eligibility in the plan is 12 months, 1 year of service (defined as 1000 hours in the 12 month period). Entry dates are normally quarterly. If I understand what ETA is saying, then because those with the prior practice who already had 12 month over 1000 hours are being allowed into the Plan as eligible, then they are considered nonexcludable? However I see Tom's point as well because if the plan did not recognize the prior service then these folks would have had to wait 12 months and work over 1000 hours before they entered the plan. In essence, they did enter the plan earlier than they needed to due to the acquisition.

Firm acquires another practice location and recognizes prior service for purposes of plan eligibility and employer match allocations. (The Plan has 1000 hour/last day rule for match.) Plan uses acquistion date for other purposes in the Plan (i.e. vesting). The hire date in the client's census records is the acquistion date. Plan entry dates have been overridden for these folks so that the vesting will track properly. For purposes of the ADP/ACP testing the system is putting these participants in the otherwise excludable group due to the overridden hire dates. I'm not sure they should be in the otherwise excludable group. Should I override that as well and have them in with the nonexcludables? Thoughts? Thank you in advance.

I know what you're after...I've had the same problem when the client asks where the forfeitures came from and where they went (in detail). Looking for just the forfeiture account activity even on many of the large vendor platforms can be discouraging. Since the Relius detailed Summary of Accounts by participant contains the "forfeiture out" data for those who got paid out, there probably is a way to pull that information. I'm sorry that doesn't help you much right now, but perhaps could be a starting point for an adventurous Relius/Crystal user. I haven't had the time recently to work on any Custom reports but maybe some day can take a look.

If late contributions were already corrected is there still a required 5330 filing? Looking at Section 4975, those excise taxes are for those contributions that have not been corrected. Plan Administrator is trying to answer the question in the VFCP application relating to the exemption from the excise tax but the wording seems to be contradictory. addendum: excise tax was way under $100 so PA prepared the 5330 to keep on file and the $$ is going in to the Plan.

ok - so I'm having an issue and while I thought it would/should be an easy question, Relius support has not yet gotten back to me.... As I'm running administration on plans for 2017, the system is not calculating the Normal and/or early retirement dates when I run eligibility. I've never had this issue before. I doubled checked the Plan Specs with regard to the Retirement information and all seems to be in order. Oddly even the dates for existing employees (who were not previously eligibile in the prior year) are "wiping out" to 0 when eligibility is run! The retirement dates ARE in there for those who were and remain participants. Any ideas appreciated!

We all know you can't have a SIMPLE and 401(k) in the same plan year. However it's possible to have a year-end receivable contribution for the SIMPLE that would be made after the PYE, which I believe is ok. But here's this situation: Employees are paid bi-weekly. The period covered is 12/16/2017 - 12/30/2017; check date 01/07/2018 (I'm aware that was a Sunday!) Anyway - the payroll company report indicates "Week 1" and will report that as 2018 W-2 wages on a cash basis. SIMPLE Withholdings were done. Accountants just discovered this now. (SIMPLE accounts have already transferred to the new 401(k) accounts for each person.) What's the fix here?

One more thought about the medical bills...if they are, in fact, still open we find that most medical facilities/practices, etc. in our area are more than happy to provide a current statement reflecting the outstanding amount(s) owed. Their goal is to get paid however possible

wanted to post an update...the vendor had me complete a hard copy request because the online withdrawal system was not able to handle this request. The hard copy form isn't much better and I thought I completed it as they indicated but now they are coming back to me saying I did not complete the form properly, Yet they will not advise me on the amounts to use to accomplish what the participant needs. Hopefully I can get it resolved soon.....

Fact pattern: Plan allows in-service withdrawals after age 59 1/2 from any (all) fully vested accouts. Active participant is over 59 1/2 with 401(k) , roth and match balances in her account. Her roth contributions started in January of 2014 so she has not yet met the 5-year rule. She has made ~$21,700 in roth contributions and the earnings on that are ~$8,178. She would like to take $20,000 from her roth account only. The participant basically wants to "net" $20k. It is my understanding from reviewing the regs that there will be a prorata portion of the withdrawal that will be considered earnings and will be taxable to her because she has not met the 5-year rule. ( I came up with the "earnings ratio" and based on that it appears that ~$5,474 of her withdrawal will be taxable to her.) I understand the 10% excise will not apply, however because she is over 59 1/2. The plan is with a large 401(k) vendor and I'm checking with them to see how they would apply taxation as well as how they do the calculation. In the mean time, anyone agree or disagree with my thought process on the calculation? "FYI" - Edited to add the following, which is from the IRS website: What happens if I take a distribution from my designated Roth account before the end of the 5-taxable-year period? If you take a distribution from your designated Roth account before the end of the 5-taxable-year period, it is a nonqualified distribution. You must include the earnings portion of the nonqualified distribution in gross income. However, the basis (or contributions) portion of the nonqualified distribution is not included in gross income. The basis portion of the distribution is determined by multiplying the amount of the nonqualified distribution by the ratio of designated Roth contributions to the total designated Roth account balance. For example, if a nonqualified distribution of $5,000 is made from your designated Roth account when the account consists of $9,400 of designated Roth contributions and $600 of earnings, the distribution consists of $4,700 of designated Roth contributions (that are not includible in your gross income) and $300 of earnings (that are includible in your gross income). Since I make designated Roth contributions from after-tax income, can I make tax-free withdrawals from my designated Roth account at any time? No, the same restrictions on withdrawals that apply to pre-tax elective contributions also apply to designated Roth contributions. If your plan permits distributions from accounts because of hardship, you may choose to receive a hardship distribution from your designated Roth account. The hardship distribution will consist of a pro-rata share of earnings and basis and the earnings portion will be included in gross income unless you have had the designated Roth account for 5 years and are either disabled or over age 59 ½.

Hey Relius users using the financial interface - I was looking today and see in my software that American Funds (both Premier and Recordkeeper) show as available under the vendor list. I use the import function for Premier plans because you can use the Empower (Great West) option since those systems are the same. I had not noticed the American Funds option before. Has anyone used them? If so, how do you generate a file in Recordkeeper that works with the import? FWIW - I did look on the Relius "help" information and did not find anything there....

That's what I thought Lou but the vendor only offers 1B or 2B as options. I think I can send in a paper copy (gasp!) and use the 7B code.

Participant over 59 1/2 requested an allowable in-service of 100% of his vested account balance. He began contributing roth in January of this year. How is the 1099-R coded for the roth portion 1B or 2B? These are the Code options provided by the vendor's online system. I'm thinking that because the roth contributions were not in the Plan for 5 years he will have to pay tax on the roth earnings and it should be the 1B Code. Because he is over 59 1/2 - that gets him the waiver for the 10% premature withdrawal penalty on the earnings so perhaps the 2B Code? I know I'm overthinking this but am burned out!!

Thank you Lou. Plan doc does have fail safe gateway language. so that was my thought as well the the 0.11% was ok. The plan does have a 1000 hour rule for ps allocation.

I have a rehired participant, no BIS, worked ~ 825 hours in 2017, top heavy cross tested safe harbor match plan. She did not contribute so no safe harbor match but receives a top heavy allocation. Participants who receive a nonelective contibution must then be bumped up to the gateway. My question is this...the owner's profit share percentage is 9.33%, which means the staff group can get 3.11% and gateway test passes. However I have to increase the staff contribution in order to pass other non discrim testing. Eligible staff is getting approx. 5.5% for profit share. Can the rehired participant receive 0.11% in addition to her top heavy or is she required to receive 2.0% to get her to 5%? I can't seem to sort this out in my addled mind.....