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cheersmate

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  1. cheersmate
    Safe Harbor 401k Profit Sharing Plan provides: 401k+Catch-up for all 3%SHNEC for all NHCEs only Discretionary PS, each Participant own rate group 25 HCEs, 2 are owners 100+ NHCEs Employer would like to contribute the following: 2 owners 9% PS Remaining HCEs 1% PS (Plan is NOT TH) NHCES only the 3% SHNEC, 0% PS -- this satisfies the G/W minimum Can this be done or must the NHCEs receive "some amount of" PS?
  2. cheersmate
    Facts: Employer has a 6/30 fiscal year and would like to install a SH 401k for the coming 6/30/2019 Fiscal Year end. In order to be a Safe Harbor plan for this year, it must be in place no later than 3/31. For 2018 the employer provided a SIMPLE plan. The 2018 employer contributions are to be deducted on the 6/30/2019 fiscal year return (as is required by SIMPLE plan rules of deduction -- cal year ending within the fiscal year provided contributed by due date of Fed return (incl exts)). Questions: Is this employer permitted to establish a new Safe Harbor 401k Plan (incl PS provisions) for its FY ending 6/30/2019 with a Plan Effective Date of 7/1/2018, thus full dollar limitations? Or, must it delay the effective date to 1/1/2019 since it had a SIMPLE thru 12/31/2018 (pro-rated limitations)? Thank you
  3. cheersmate
    The pink was for cancer awareness, support as I understand it. Must admit day glow pink and orange was a bit of a dazzler to watch!
  4. cheersmate
    In this situation the plan requires only 60 days for eligibility bc the employer needs to capture certain level of talent and feels the rapid entry is necessary. Generally v little turnover, but those who have left were vested at some level. It is fully expected the new hire, who is full time and salary is near 6 figures is expected to work indef into the future. Having said that if he terminates before a 1000 hrs in 2019 he would not vest in the PS allocation portion of his acct. Given this and my original concern that Tom Poje references it seems it would be best to "cherry pick" the next participant who is vested partially already. Or have I missed anything? Finally I am not clear why an -11g amendment is needed - what am I missing, please if you wouldn't mind? Many thanks to everyone!
  5. cheersmate
    Plan facts: 3%SH to all discretionary PS to all 3 HCES, 3NHCEs, young owner, mixed age staff each participant is in own allocation rate for PS Can the employer "cherry pick" a particular participant - who happens to be youngest and new ppt mid-year w lowest eligible pay - such that his own RG passes (a)(4)? The remaining NHCEs will receive at least GW minimum. Doing this passes all (a)(4) testing, 410b easily. My hesitation is because of perceived bottom up allocation... would it be better to "cherry pick" an existing but younger ppt who earns $100k (obviously more expensive to do so)? FYI, the other 2 HCEs are receiving the 3% SH plus 1% PS, their indiv RGs pass easily. Thank you.
  6. cheersmate
    HOKIES! HOKIES! HOKIES! ... sorry, just a bit of fun! ;)
  7. cheersmate
    When is a participant permitted to resume his/her 401k deferral contributions following his/her 2018 Hardship distribution 6 month suspension period? Is it immediately, or, must he/she wait until the Plan's next permitted "change", e.g. if Plan permits Quarterly changes, must he/she wait until the 1st of the next quarter following expiration of the suspension period? Plan provides 6 mo suspension Plan is SH401k Plan provides the Participant must complete a new election following the 6 mo suspension bc the election is deemed to be zero at the point of Hardship distribution. Generally speaking Participants may commence or change their deferral elections Quarterly (jan 1, apr 1, jul 1, oct 1). Thank you!
  8. cheersmate
    Kevin C, thank you for clarifying this... Very much appreciated!
  9. cheersmate
    assets left to make the RMD. If that happens, the distributing plan is still treated as having satisfied its minimum distribution requirements, but the the recipient plan will have received an invalid rollover amount. RatherBeGolfing - With respect to the quoted EOB... 3.a.1. ...Plan administrators should be careful particularly in two types of situations: (1) when a participant is electing a lump sum distribution in the calendar year in which the participant has attained age 70½ or in a later calendar year, and (2) when a participant is taking a nonperiodic withdrawal of a portion of his/her accrued benefit in the calendar year in which he/she has attained age 70½ or in a later calendar year. MY RELATED QUESTION: The active non-5% owner participant is age 75, requesting a partial withdrawal at this time but wants the remaining plan account balance to stay in the plan indefinitely. The Plan does permit this. In this situation: 1. I assume the first dollars withdrawn currently must satisfy the participant RMD based on age 75 factor, the balance may be rolled over to IRA. Correct? 2. Since this participant is taking a partial this year and triggering the RMD for this year, will the participant now be required to receive RMD for all subsequent tax years from the Plan, even if the participant would prefer not to? Thank you
  10. cheersmate
    I do not believe Larry agreed ... yet
  11. cheersmate
    Hello Kevin - I read thru the "spirited discussion" you linked above. Has Larry ever gotten back to you or anyone after he finished his side-bar discussion with Derrin and his intended further investigation of Derrin's citations? I ask bc at this point, given Sal says its is grey matter, and the various points made by you and Larry, now Derrin, it seems one side suggests the safe bet is to credit the service (even where temp was temp less than 1 year before being hired), the other strongly believes it is incorrect to credit the service (where temp was tem less than 1 year before being hired)... what's a girl to do?!
  12. cheersmate
    The employer occasionally uses the services of a temporary agency to find new talent. Occasionally after 90 days the "temp" is offered a permanent position with the employer. Does the employer have to count service while a "temp" for the Plan's eligibility waiting period, vesting credits and accruals? In other words, does the employer have to bridge that service while working "temp" now that they are hired to a permanent position with the employer? Thank you
  13. cheersmate
    Umm... so I believe not everyone has caught up to 2018, or left the stone age. I was astonished to be honest when that was told to me today. The participant is a professional but will not go against her parents wishes. Sad really. I suggested she name whomever she wanted as her beneficiary. If not the boyfriend, she could always ask him to sign the spousal waiver.
  14. cheersmate
    Hello David - Based on what the above posters have shared with me, it seems the joint tax return filings (or married filing separately)... hopefully one of them will comment to you.
  15. cheersmate
    Hello MoJo and JPod - I do have an update... the Participant is a resident of Washington state and has been living with her boyfriend for 7 years, currently looking into establishing themselves as "common law" spouses. They would like to get married however one of the party's families is prohibiting it -- so looking into alternatives. Do either of you know if WA recognizes "common law" unions and if so the parameters beyond tax filings, holding each other out in the public as spouses, cohabitation? Again, much appreciated.
  16. cheersmate
    Thank you MoJo and JPod for all of your insight with this matter. It is very much appreciated. If I learn of any additional information, I will be sure to share it here. Many thanks, again!
  17. cheersmate
    MoJo - do you know if California still recognizes "common law" marriage? The plan is a Relius document and it defines Spouse as per federal law. Either way... My concern is your final sentence, of course. To be honest, I do not yet have the details in support of "present intention" or duration (it is my understanding duration is only 1 of the several factors to be considered). But assuming they meet these requirements, is the significant other a "Spouse" for Plan beneficiary purposes, have legal standing upon death of Participant? MoJo, would you agree with JPod that if the 2 parties are filing "single" tax returns (not married filing jointly or married) that should be sufficient grounds for the Plan to rely on and deem the significant other not a "Spouse"? My only other thought is to have the Participant designate whomever they choose and if it is not the significant other, have the significant other sign the "Spousal Consent" portion on the Beneficiary Designation Form. thank you!
  18. cheersmate
    Does the primary beneficiary requirement that a spouse must be named unless spousal consent is provided also apply to "common law marriage" or common law spouse? The particular participant resides in CA as does the Plan. Thank you
  19. cheersmate
    Mike, can you please send me the spreadsheet? I would appreciate it very much.
  20. cheersmate
    Thank you, chc93.
  21. cheersmate
    Thank you for replying. How did you reflect it on the 5500s (transferor and transferee) and did the plans involved receive any subsequent inquiries from IRS? I saw your previous posts on this a few years ago... what happened w that audit or IRS review? Thank you again!
  22. cheersmate
    Terminated DB distributed all participant benefits, satisfying all benefit liabilities. Rather than pay surplus excise tax, the surplus will be transferred to a qualified replacement plan. Then allocated to participants (same as DBP participants). Is Form 5310-A necessary?
  23. cheersmate
    ABC initiated the sale, asking Z, his employee, if she would like to purchase it. ABC offered Z a proposal. Z never went to ABC and asked about a possible purchase. There were approximately 7 employees at the location. It is my understanding only Z was eligible (others were part time or short service). Upon the asset sale to Z, ABC continued with his other 2 locations however did not offer any positions to any of the now terminated employees of the "sold" location. Z at her discretion hired some (not clear to me if all) of those individuals. This was in 2017. As per 2016 5500 there are 3 participants. Z plus ABC owner and allegedly his wife. I can not surmise the 2017 headcount, but based on info wrt to the "sold" location census I do know of, it seems the 2017 headcount would remain unchanged. That being said, the participation would have decreased 33.33% as a result of the sale of the location. At this time (2018) Z is at the beginning stages of establishing her own retirement plan. When I asked about possible rollover funds, the matter of her previous employer's plan came to light. She was recently provided her 2017 statement, and, it shows 60% vesting in the PS portion of her account. Given the above , do you believe the IRS would consider this a partial plan termination? Based on what I understand your comments to mean, I believe yes. I would appreciate your thoughts given the above details. Thank you everyone.
  24. cheersmate
    Exactly part of my concern, along with the fact Z purchased the business location that was sold.
  25. cheersmate
    Tom, It is my understanding the 20% is part along with the facts and circumstances. And the 20% is a rule of thumb, as it may be a PPT with less than 20% or ot may not be a PPT with more than 20%, all depending on the F&C. Purely numbers-wise, Z is 1 of 3 ppts in the ABC plan, so 33.33%. ABC the employer initiated the sale of the practice and location and Z happens to be the purchaser. ABC retained its 401k plan and continues to do business in another location, and, Z's account balance currently remains in the ABC plan. I believe it could be argued there has been a partial plan term based on the ppt headcount and the fact the employer initiated the sale of the location where Z was employed, hence Z's eventual termination. BUT where I believe this may be questionable and therefore seeking benefitslink's insight is the fact that Z purchased the portion of the business.
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