MarZDoates

Thanks for the input. The client was using us to do the admin on their 401(k) and another firm for their other plan. I have not seen the other plan document, but according to the source codes on the 5500 it is a P/S plan. The plan name indicates "prevailing wage plan". They are moving their 401(k) away from us to the other firm and transferring the assets to the other plan. I say good luck with that, because I know there are some gnarly issues with the 401(k) that the client would not correct....against our recommendations. I just want to make sure I do the right thing on my end to cma.

Currently my client sponors two plans: a prevailing wage plan and a 401(k) Plan. Can the 401(k) plan be merged into the prevailing wage plan? If so, can the plan have different eligibility requirements for the 401(k) portion and prevailing wage portion? (It is my understanding that the prevailing wage plan must provide for immediate eligibility and 100% immediate vesting.) If they terminate the 401(k), is the prevailing wage plan considered a successor plan? Thanks, m

Can a plan that currently allows for immediate distribution (upon termination of employment) be amended to allow distributions only in the plan year following termination of employment without violating the anti-cutback?

Agreed! Thanks.

I have a situation where a 401(k) Plan participant will no longer be "on the company's payroll" and will be working as "contract labor". For plan puposes, would this be considered a severance from employment?

Thank you for the feedback!

The Alternate Payee's Social Security Number and Date of Birth were referenced in a QDRO. However, the SSN was one digit off and the DOB was one year off. Since only the A/P's name and address must be specified, does a new DRO need to be drafted?

THANK YOU!!

Has anyone ever heard of first filing a late 5500 thru DFVC and then going back to the DOL to ask that the penalty be refunded if we can demonstrate reasonable cause for the late filing? 5500s were timely extended to 10/15; however due to some technical problems, 5500 was not filed until several days after the 15th. Without considering a reasonable cause letter, we filed thru DFVC. (Small plan) Thanks!

Thanks for the input everyone!! Much appreciated.

That makes sense (and makes my stomach hurt).

I would like to receive some feedback as to what would be considered a reasonable "client load" per administrator. CPA firms and non-CPA firms if possible. Anyone care to share? Thanks!

ALL of these "asides" are cracking me up. I love it!!!! Thanks again.

NOT! I LIKE THIS ONE HAHAHAHA Thanks everyone!

Does anyone know where I can find some sample language to "disengage" from a client who consistently won't provide requested information or make plan corrections based on our recommendations? Thanks.

Safe Harbor 401(k) plan had 401(a)(17) failure in 2011. Employer deposited too much matching contribution. Can't use the account balance reduction method, because 100% of the account participant's was paid out in accordance with a QDRO. We know that a safe harbor plan can't be amended mid-year. Is there any exception to this in order to correct with a retro amendment and making an additional contribution for the other participants?

I would like to revisit this.....I was reading further into EPCRS and see where the excess match may be corrected using the plan amendment correction method and increasing the allocation to the other participants by the amount of the excess match/401(a)(17) limit for the year. Does this sound reasonable? What money source would this additional contribution need to be deposited into. Would this HAVE to go thru VCP or would self correcting be sufficient. Would this eliminate the QDRO issue? Or am I interpreting this all wrong? thanks!

401(a)(17) was in my head but typed the wrong thing...sorry...thanks for the input

Employer submitted a matching contribution on compensation in excess of $245,000 in 2011. The match is a fixed formula: 125% of deferral up to 4% of comp. Participant deferred $16,500 (NOT catch up elig). Correct match should have been $12,250 ( $245,000 * .04 * 1.25) Actual match was something like $15,000 ($300,000 * .04 * 1.25). As I understand it, this is a 401(a)(9) failure creating an excess allocation of employer match. According to EPCRS, the correction is to forfeit the excess along with earnings. Due to a subsquent QDRO distribution, the amount left in the er match source is less than the correction. Client did all this directly with the investment provider, without going thru TPA. Any suggestions???? Thank you!

For the participant count on the 5500-SF lines 5a-5c, the instructions on page 11 say to include “retired or separated participants entitled to future benefits. This does not include any individual to whom an insurance company has made an irrevocable commitment to pay all the benefits to which the individual is entitled under the plan”. Would this mean a 403(b) account? Or would this apply when a defined contribution plan has purchased an annuity for a participant as a distribution option? Thank you.

Awesome. Thanks.

We have a two-participant profit sharing plan with discretionary contributions. One participant has a life insurance policy. Is it possible for the plan to pay the premium in a year where they don't make a p/s contribution? Logic tells me no..or at least that the contribution needs to be sufficient to cover the premium. The participant without a premium should receive an allocation also. How would it work if the premium is paid for with "aged" money? For 5500 reporting purposes, would the insurance premium be shown as a transfer from the other investment account to the life insurance policy? I'm not finding any guidance to support my thoughts. Thanks.

We are the TPA for a (takeover) 401(k) plan where a participant terminated employment several years ago (>5 years). She has a very small account balance left in the plan <$100. We notified the employer that they could distribute to her in a lump sum without her consent. It has now come to our attention that this participant is deceased. They can't locate a copy of her beneficiary designation form (and she was not married). What do we do with the money???

We had the same situation for a 2007 5500. The client completed section I of the IRS notice, included a cover letter and a signed/dated copy of the 2007 5500 demonstrating it was filed timely. The IRS kicked it back stating that it needed to be efiled, basically ignoring the cover letter. We efiled with a pdf "other" attachment consisting of cover letter explaining that it was filed timely, a signed copy of the 2007 return and a copy of the IRS notice. Client received penalty assessment letter for late filing. We called the IRS from the client's office and explained the situation. It was finally resolved without penalty, but took at least 6 months. I guess my point is NOT to include a copy of the 5500....just complete part I of the IRS notice.

Thanks for the link. Good info!