Mike Preston

ETA, are you sure? I'm of the firm belief that nothing can be deferred earlier than the date that the wages would have been paid absent a 401(k) plan. Even though I think of that as the default I recognize that the regs authorize the inclusion in the prior year of that which is paid/payable in the first few days after the end of the period. So I agree that consistency is important. I'm just saying the default is that there is no inclusion in the prior year unless there is a conscious decision to do something which is not standard.

Yes, it is new in the geologic sense. Been this way for a bit over a year.

Isn't this the auditor's domain?

Start at 410(b)(6)©

Not benefiting.

I think they just don't want to process any reversals, which the participant is entitled to.

None whatsoever. Now let's see if others can conjure up a hypothetical that could be problematic.

Yes, it is an issue. The vendor should have a re-hire protocol that leads to proper deferrals in the absence of an affirmative election. However, I suppose the vendor can just arrange their normal protocol to include an expected failure in the case of re-hires. In the absence of a match, the self-correction may be limited to a "Notification of BooBoo Being Corrected" ™. Gets kind of messy, though, if there is a match.

Many? How about 100% of qualified plans that wish to remain so........

What Reed said!

Yes.

You only get absolution with respect to years that are filed.

So much to say, so little time. Please excuse the brevity. Gris, this is an interesting issue. The reg you cited deals more directly with whether the controlled group rules apply. That is, it seems focused on multiple entities. I have never seen that provision extended to create a majority owner of a single entity through 1563 attribution from son to father. In the case at hand I would recommend asking the PBGC. They are usually prompt. My 2 cents: You worry (wonder?) too much. There is at least one case on record where a majority owner waived their benefit so as to create a reversion where the IRS took the position you posit. But I've never seen it applied in the case of an insufficient plan.

And what do they do if after said consideration they decide that it wasn't? Just this just go to the issue of what entity pays the fee?

If nobody sends a QDRO to the plan by the end of the freeze period, the plan should unfreeze your account and you will get everything. If the DRO is sent to the plan and the plan approves it as a QDRO, then the plan will look to the terms of the QDRO to decide what your ex-wife's interest in your 401(k) is and, most importantly, whether that interest survives her death. The plan should have QDRO procedures that will lay out the above. If there is a conflict between what I've said and what the QDRO procedures say, the QDRO procedures prevail.

Not enough facts. Maybe yes, maybe no.

Sign up at www.asppa.org. Study materials are listed there.

This is not without controversy as to the ability to deduct in excess of 25% of $75,000. There are some who argue, such as myself, that the 25% limit is calculated with respect to those who actually benefit under 410(b). What is interesting in this case is that there is an employer contribution (the match) that falls within the 25% calculation such that the total employer contribution between the $53,000 and the match would no doubt be much less than the 25% limitation. So, the question is whether the 410(b) calculation can aggregate between the two plans.

I find your hypothetical to be highly unlikely. Just saying.

Clients typically don't like it when they are told that there are perhaps hundreds of thousands of dollars in improper deductions that have been claimed over multiple years. The client should hire somebody who can peel back the layers on this potential clusterbomb before it gets any worse.

Last I checked, the short year had to be 7 months or less to be combined, so if that hasn't changed I don't think it will help very much. I see nothing wrong with being hyper-technical. So look to the exact language in the plan to determine the first day of the plan year (probably 5/1/2015) and to determine exactly who is eligible on that date. You are probably stuck with an audit, but who knows?

*CAN* do both. But since it is subject to CBA, *CAN'T* do anything unilaterally.

As long as the total for the year satisfies non-discrimination, sure.

I'm not aware of any prohibition as to the creation of a combined DB/DC where the DC constitutes a 414(k) with discretionary contributions. However, I'm not aware of any pre-approved plans that allow same. Accordingly, it would at the least require an individually designed plan. I can't imagine the work required to draft such a plan being efficient when compared to drafting and administering a DB (whether pre-approved or not) along with a separate DC (whether pre-approved or not).

From pre-amble to RP 2013-12: -Revising Appendix A, section .05, and related examples in Appendix B to provide that, in some cases, a matching contribution owed to a participant may be made in the form of a corrective employer matching contribution, instead of a QNEC, so that the corrective employer matching contribution would be subject to the vesting schedule under the plan that applies to employer matching contributions