coleboy

I have never used in either, Larry, until I started working for this company.

It's Monday and my brain isn't working today. Basic admin 101 question. Plan compensation is is based on when participant enters plan. For the purposes of allocating a profit share contribution, does one use compensation based on the entire plan year or the one from when the participant enters the plan?

A potential client has a DB plan in place with another TPA. They now want to start a 401k using my company as the TPA. My understanding is that the 401k plan will be for employees who were formerly contract(1099) employees and are now W-2 employees. None were ever in the DB plan. What do I have to be careful of in setting this plan up? Also. what are the testing issues involved?

Employer has SIMPLE IRA with the 3% match. The 3 owners have maxed out their contributions in July. The match is made each pay period. The question is should the 3 owners continue getting the 3% match even though their contributions have maxed out? I realize that the match is made on the whole year's compensation but what if their own contributions ended up being less than 3% when their total year's compensation is used. Should the employer wait to true-up at year-end? Or is it like a 401k plan where if the match is made each payroll period, it stops when the contribution stops and no true up is needed.

We are a TPA firm who does some COBRA administration. Received a call from a distraught person because his COBRA was stopped due to non-payment. He sent a partial payment to cover May then sent nothing for June & July. He was then notified that coverage was stopped due to lack of payments. His argument was that he never received any payment coupons nor did he receive any "warnings" that coverage was going to end. He had signed off on all of the initial COBRA paperwork which stated the costs, payment of premiums, etc. My question is whether he has any push back. Thanks!

Thank you!

e have a SARSEP that has always passed the testing in previous years. It did not pass. The 2 HCE's are over 50. Can the excess be re-characterized as catch up contributions as in a 401k plan?

Plan year runs 1/1/17- 12/31/17. HRA is terminated 4/30/17. Must a Form 720 be done? Are fees based on the period 1/1/17-4/30/17?

Sorry, I missed this. There is a mother as well as a father.

As a follow up to my original question. The father is definitely the beneficiary. I have asked that the money from the son's account be taken out of the father's 401k and restored to the son's 401k. So how should the benefit be processed? Ordinarily a sparate beneficiary account would've been established under the plan in the name of the beneficiary.

There was no beneficiary on file for the 401k plan. His father, I believe, is the beneficiary.

A death distribution needs to be done for a young participant. His father, who is handling his son's estate, is also in the the same 401k plan. When the death benefit was processed, the deceased participant's balance was simply rolled over into his father's 401k account. I believe this is incorrect. How should the processing of the death benefit be done?

Wow, I am totally confused now! Are you saying that we should have the K-1's for the year that we are working on prior to what they have deferred or what they want to defer? We should be asking not only for their K-1's but also for unreimbursed partnership expenses claimed? For many years, we rarely have the plans we had just involved regular ol' W-2 income for both the owners and the employees. This past year, we have taken on many new plans where the owners will be taking draws, etc. This may be too much for my old tired brain! Maybe you should do a mini webinar on this, Larry.

Thank you for the clarification!

Sorry, I wrote it incorrectly in my haste! Below is the actual excerpt from the Ft William adoption agreement: [ X ] Completion of 6 consecutive months of continuous service (not to exceed 12 - hours of service failsafe applies) An FT Williams person said that this election is an hours requirement not an elapsed time. They said a person must work at least 1 hour a month. An employee worked a few months then was gone 3 months due to a broken wrist and has now come back. I am trying to determine if she is eligible or not.

Client has 6 month continuous service for eligibility. The FT Williams adoption agreement says 6 consecutive months of continuous service( not to exceed 12 hours of service fail safe applies.). I've never seen this before. Would the service spanning rule apply in this case?

The match is capped at $2,000. Sorry I wasn't clear about that. The part-time employees would end up working 1000 hours during the year. Thank you!

Client has a plan with age 21 and 6 months of continuous service. They have a discretionary match which has been typically $2,000 per participant. They will be hiring some employees on a part-time basis( 24 hours a week) and want to know if they can "pro-rate'' that $2,000 match for these part-time employees. That is, they feel someone who only works 24 hours a week should not receive the same match as those who work 40 hours a week. I'm thinking that maybe they should just go to a certain percentage of pay instead. Any other suggestions?

Thank you ACK!

The company that is being bought is changing their EIN. Their accountant's have told them that because of the change in the EIN, the Simple Plan is automatically terminated. Is there any truth to this? I haven't found out whether it's a stock or asset sale yet.

Client currently has a 401k plan. It has just acquired a company with a SIMPLE IRA. It is my understanding that SIMPLE IRA's cannot be terminated during the year. However, is this still the case if the company is sold? Does the new company have to allow the employees to continue their contributions to the SIMPLE IRA? And so they continue the acquired company's employer contribution? Current 401k plan has a 1 year eligibility requirement.Not sure if original hire dates are being kept so employees under the acquired company may or may not be eligible for the 401k yet.

Thanks Larry. We were originally told that there were only 2 employees. It was discovered at the enrollment meetings that there were other (10 or so) employees who were union. You are so right about never getting enough information! Our salespeople only seem to care about getting the sale. (Oops! That was my inside voice talking!)

A safe harbor 401k plan was set up believing that it was for just the owner and his employee. The enrollment meeting was done by the broker. We now find out that it was the intention of the owner to set up the plan as part of the Union contract. The owner apparently is the only non-union employee. It's been many years since I've worked on a plan with union employees. Are they able to have a safe harbor plan with a the basic match? Does the union's contract specify the eligibility requirements, match,etc.? How should I proceed?

Can a small business employer with less than 20 employees, who offers group health insurance, sponsor a section 105 Health Reimbursement Plan to reimburse employees who opt out of the group offering and enroll in Medicare Part B, D and supplement?

We thought about merging it but the client wants to terminate it instead.