WCC

Yes Yes $54,000 is the max amount you can receive plus the catch up for a total of $60,000, but see my next answer. Your limit is $18,000 plus the catch up for a total of $24,000, the remainder must be funded by your employer with match and/or profit sharing money. Your cap is $54,000 plus the catch up, not 70,800. The profit sharing variable depends on the plan design. You would need to speak with your employer about how the profit sharing allocation works. Yes, that counts towards your $54,000 limit if they are funding it into the profit sharing/401k plan. you need to engage a personal financial adviser for this question. (or be very comfortable with online financial calculators)

All the plans we work on do hire a consultant or have an existing adviser and our average plan size is much smaller. There are a handful of specialty (i.e. qualified plans) regional and national advisory firms that do not have proprietary platforms or ties to record keepers. For an experienced adviser, the project billable is attractive project work because they will have templates built and all the right contacts in place already. Depending on their client base they may have the advantage of historical bids they have received for other clients. This can benefit you in terms of negotiation power for an adviser to say "well you bid this one at $x per head... why the difference...." But of course the adviser will hope to be hired long term.

Not sure, but you can call the DOL regional office and they are usually quite helpful. They can probably tell you the process of how they handle a claim and what procedures they follow. The San Francisco office is helpful with general inquires.

We see many advisers using third party scoring systems that take into account sharpe ratios, stan dev, beta etc. Many third party vendor platforms use feeds from Morningstar. Most plans we deal with have advisers who have access to these scoring systems. The advisers are generally not doing this alone or with their own analysis, it is the major broker dealers and RIA's that have their people building these systems.

Has the ER made the suggestion that he defer his $6500 (or more) to the 401k plan for 2017? I know participants have reasons for not using the 401k (i.e. investment flexibility), but he would get his tax deduction and his free money.

yes, if done correctly. Here is a recent discussion similar to this question:

thank you all for the responses.

Short plan year. I edited my OP to make that clear, thanks for the clarification. It was adopted early December and it took them a pay period to get the deferral elections processed. 5500 instructions say the following. All pension benefit plans covered by ERISA must file an annual return/report except as provided in this section. The return/ report must be filed whether or not the plan is “tax-qualified,” benefits no longer accrue, contributions were not made this plan year, or contributions are no longer made.

I have been in a debate with a TPA firm over whether or not a Form 5500 should be filed in the following scenario. They are telling me a filing is not required. I asked them to show me documentation as to why not and their answer is that it is "industry standard" not to file. I would like to ask the Benefitslink experts if this really is "industry standard". Their argument is no assets therefore no filing since they choose to file on a cash basis. The EOB has an example almost identical to this which says to file. I called the Office of Chief Accountant they say file and they referenced page 2 of the 5500 instructions. Situation: Traditional 401k plan was effective December 1, 2016. Plan year ending December 31, 2016. Document was signed and the first payroll withholding happened on December 31, 2016. Deposit of the funds was made first week in January 2017. File Form 5500 for 2016? Yes or No? If you respond with "no" will you please share documentation as to why? Is it industry standard not to file with $0 assets when you have participants and withholding? We are not changing the effective date of the plan to 2017, deferrals were clearly withheld in 2016 and there were participants on December 1, 2016. Thank you

So the stock sale of a once unrelated group triggers a related group and therefore RMD's forever?

Company A is owned 100% by one individual. Company A is purchased in a stock sale by Company B. Owner of Company A will never be an owner of Company B but will be an employee. Purchase was effective April 1, 2017. Owner of company A turns 70.5 in 2017. Company A terminated their plan prior to the sale. Owner of Company A will take a RMD from Company A's plan for 2017. However, what about going forward regarding assets accrued under Company B's plan? The EOB states (I added the red lettering): under the key employee definition, an individual is a 5% owner if he/she owns more than 5% of the company (or a related group member - see 1.d.3) below) at any time during the relevant plan year. Will Company A be considered a related group under the control group rules? Therefore requiring RMD's for the remainder of this individuals employment?

We have moved a couple plans away from TIAA over the years. There are usually a few issues to watch out for: 1. Money invested in TIAA Traditional generally has a 10 year payout. You may already be aware of that. 2. I have not seen any surrender charges in the share classes you reference - but that may just depend on the contract. 3. Are the assets in individual contracts? Very likely they are if the plan has been with TIAA for a while. If so, each individual will be required to sign a transfer form. Be careful on the transfer forms because they have a bar code unique to each individual (i.e. you can't just copy one form and give it to all the participants to complete). There are ways around the bar code issue.

Yes, you can if the plan document allows for it. Note, if the intern/seasonal/temp employees meet 1 year and 1000 hours, they must enter.

I have not found any free ASPPA CE. However, the Western Pension and Benefits Council hosts webinars which are relatively low cost compared to other webinars I have seen. $50 for non members $35 for members. http://westernpension.org

correction to my last post. Limitation year is defined as: Limitation Year means the Employee’s taxable year. However, if the Employee is in control of an employer (within the meaning of section 1.415(f)-1(f)(2)(ii) of the regulations), that Employee’s Limitation Year is the limitation year of that employer. Looks like the TPA is correct. Penalizes terminated employees in this case.

I checked the limitation year and it is the same as the plan year. I have asked why they are doing this and am waiting to hear back. Thank you all!

Plan year runs from July 1, 2015 - June 30, 2016. Plan has a profit sharing allocation of 5% to all participants, no allocation conditions. Participant earns $30,000 from July 1, 2015 - December 31, 2015. Participant earns $1,000 from January 1, 2016 - June 30, 2016. Participant terminated employment January 30, 2016. Profit sharing allocation is $1,550 (5% of 31,000). Participant makes no deferrals. The profit sharing allocation is deposited in September 2016. How does the 415 limit work in fiscal plan years? TPA is processing a 415 failure of $550 and I am trying to understand how this works in conjunction with a pro-rata profit sharing formula. Thank you

missed deferral is funded as a QNEC. match is funded as a match. See IRS notice 2015-28.

Plan uses a discretionary match formula based on the plan year. Plan fails ADP test and refunds have been processed. TPA calculated the match excluding the ADP refund amounts, therefore reducing the HCE's rate of match on their entire deferral. This seems odd to me so I questioned the TPA as to why the match is being calculated after reducing the total deferral by the refunded amount. They told me the match can be calculate either way (before refunds or after refunds). Is that accurate? The plan document does not specify before or after. Thanks

Participant dies with no beneficiary form on file. The document establishes payment of benefit to: 1. Spouse (no spouse in this case) 2. per stirpes (4 children) 3. surviving parents 4. estate An attorney for the estate is trying to tell the plan sponsor they must distribute benefits directly to the estate due to the estate documents. My response is "no" we must follow the plan document. Is there an instance where the attorney could do something to override the form of payment in the plan document? One thought is all four children and parents disclaim their benefits under IRC 2518. The funds then are paid to the estate. Thank you

See point #6 from IRS publication 560. Our document allows to write in an increase beyond year 5. Qualified automatic contribution arrangement. A qualified automatic contribution arrangement (QACA) is a type of safe harbor plan. It contains an automatic enrollment feature, and mandatory employer contributions are required. If your plan includes a QACA, it won't be subject to the ADP test (discussed later) nor the top-heavy requirements (discussed earlier). Additionally, your plan won't be subject to the actual contribution percentage test if certain additional requirements are met. Under a QACA, each employee who is eligible to participate in the plan will be treated as having elected to make elective deferral contributions equal to a certain default percentage of compensation. In order to not have default elective deferrals made, an employee must make an affirmative election specifying a deferral percentage (including zero, if desired). If an employee doesn't make an affirmative election, the default deferral percentage must meet the following conditions. It must be applied uniformly. It must not exceed 10%. It must be at least 3% in the first plan year it applies to an employee and through the end of the following year. It must increase to at least 4% in the following plan year. It must increase to at least 5% in the following plan year. It must increase to at least 6% in subsequent plan years. We see this often with the record keepers we use. One of the pricing variables is cash flow. Higher the cash flow the better some vendors price (i.e. lower asset charge). The down side to pricing is the number of small balances auto enrollment creates. Some vendors weigh average account balance more than cash flow when they look at pricing.

From the EOB: All service with the employer must be credited, even service before the plan is established, unless disregarded under the break in service rules See IRC §410(a)(5)(A) service for eligibility purposes cannot be excluded unless under the above referenced break in service rules

No, unless one of the exceptions listed below applies. Notice 2016-16 states this in section II B (copied below). Section 1.401(k)-3(e)(1) provides that a plan will fail to satisfy the requirements of §§ 401(k)(12) and 401(k)(13) and § 1.401(k)-3 unless plan provisions that satisfy the safe harbor plan rules of § 1.401(k)-3 are adopted before the first day of the plan year and remain in effect for an entire 12-month plan year. It also provides that a safe harbor plan that includes provisions that satisfy the safe harbor plan rules of § 1.401(k)-3 will not satisfy the nondiscrimination requirements for § 401(k) plans for a plan year if the safe harbor plan is amended to change those provisions during the plan year. Section 1.401(m)-3(f) includes similar provisions for matching safe harbor plans. The safe harbor plan regulations set out several exceptions to the requirement that plan provisions satisfying the rules of §§ 1.401(k)-3 and 1.401(m)-3 be adopted before the first day of the plan year and continue for an entire 12-month plan year. These include exceptions for (i) a short first plan year, (ii) a change in the plan year, (iii) a short final plan year, (iv) a delayed adoption of safe harbor plan nonelective contributions (if notice of this possibility is provided before the beginning of the plan year), and (v) a mid-year reduction or suspension of safe harbor contributions (which results in loss of safe harbor plan status). See §§ 1.401(k)-3(e), (f), and (g) and 1.401(m)-3(f), (g), and (h).1 In addition, exceptions to the prohibition against mid-year amendments may be provided in guidance of general applicability published in the Internal Revenue Bulletin. See §§ 1.401(k)-3(e) and 1.401(m)-3(f).

Participant provides a valid and timely deferral change form to HR. Deferral form says "I want to defer 100% of eligible income on the December 31, 2016 payroll" HR does not process the request. Participant is upset and plan sponsor wants to fix the problem. We can follow Rev Proc 2015-28, but are there any other possibilities? The payroll funds are sitting in the employee's checking account. What would happen from a compliance point of view if the plan sponsor retrieves the funds and corrects the December 31, 2016 payroll and withholds 100%? Thank you

Below is a quote from an IRS phone forum from September 7, 2012. My thought is you now have to follow Rev Proc 2015-28 to correct a failure to implement a deferral election. Note: A Plan Sponsor cannot avoid liability to make corrective contributions for the missed deferral opportunity by making its employees responsible for checking pay records to ensure deferral election has been implemented.