heygents

An annual large plan 5500 audit done by a CPA.

During a recent audit, it was found that one of the randomly selected participants was only having 2% deferred from their pay when they had indicated in their enrollment forms that they wanted to contribute 4%. This form was filled out in 2005 so it has been quite some time that the participant was not getting the correct amount taken from his pay. Obviously the employer is going to have to correct this mess. Some questions: 1. I know the correction method is 1/2 of missed deferrals, 100% of missed match, plus any gains. Is there an easy (or easier) way of calculating this other than going back and looking at when each additional amount would have been invested? 2. Is there any sort of onus on the participant to bring it to the employers attention? It is hard to believe that 10 years went by and the participant never said anything. 3. Any statute of limitations, etc? Thanks

I have a client that is considering purchasing a business which currently offers a SIMPLE IRA to their employees. Our client would like to offer the new business' employees the match they are currently receiving in the SIMPLE IRA which is different than what their current plan offers. Is it possible to have employees receiving two different matching formulas? If the new business is bought in the middle of the plan year, does the SIMPLE IRA immediately terminate? Anything else I need to consider? Thanks

Has anyone with a large plan ever had an auditor ask for the cost basis of all the mutual funds? We are going through this with a new auditor this year and have never been asked this before. Does this make sense to anyone?

We have a plan that allows loans but they are restricted to the usual items: Medical bills, tuition, purchase or maintenance of a home. Should the plan sponsor have written proof about a need (i.e. estimate, etc.) before approving the loan or is the signed statement of the participant good enough? Thanks

We have a client that reinstated their match in the middle of the plan year. The employer would like to add an additional discretionary match now that their plan year has completed. Is it possible to only include the period of the plan year in which the employer reinstated in calculating the discretionary match amount? Thanks

This must be the month of problems for me Long story short.... A rather large deferral for the owner of a plan sponsor for December 2012 was never deposited in the trust account due to a perfect storm of miscommunication between the payroll company, recordkeeper, and plan sponsor. Deferrals for all other participants were deposited and invested in a timely manner for the month. The deposit still hasn't been made. What is the best course of action to correct this issue? Thanks

A plan sponsor decided to reinstate their company match in 2013 after a period of a few years without the company match. Today the plan sponsor asked me to run the non discrimination testing to see if the HCE's were projected to have any excess contributions. Since the plan document currently states to use prior year NHCE ADP/ACP values the ACP test fails because the NHCE for 2012 was 0 since there was no match. Because of this, all the HCE's would need to receive a corrective distribution. Are there any special rules about ACP testing when a match is reinstated that would allow the HCE's to receive a match for the year? Thanks

A company who's plan we administer just bought (asset acquisition) 100% of another company who has a 401k plan. The owner of the business would like the acquired employees to be immediately eligible to participate and to receive matching contributions and for the acquired business's plan to be merged into the existing company plan. Is this appropriate and allowed? Thanks

Is there a specific IRS, ERISA, DOL rule you can point me to that explicitly says this. Not that I don't believe you but I just want to make sure before I begin shredding tons of statements. Thanks

We are a financial advising and 401k recordkeeping firm and have been holding on to and filing away the piles of custodian statements we receive each month from our 401k plan custodians. We never use the paper statements because they are available for download online at any time and it is much easier to go online to get them then dig through files. Is there any law that states we must keep paper copies of statements if they are made available online? Thanks