ratherbereading

I have a plan that is terminating as of 8/31/2017. It's a 12/31 PYE. It was top heavy for the 12/31/2016 determination date so they have to make a top heavy contribution based on comp as of 8/31/2017, correct? However, do I need to do a top heavy test for the 8/3/2017 short plan year determination date since the company and plan will no longer exist in 2018? Thank you in advance

I see no problem with faxing. I have lots of clients who request faxes, it's not 1980s! And as someone pointed out the chances of misdialing and getting another fax number are slim. Just fax a few pages at a time.

The 2 owners in a plan over-contributed to their 401k accounts by $465 each for plan year ending 12/31/2016 even though their W2s state they contributed $18,000. There were 53 payrolls in 2016. The refund is being made after 4/15. Is the Distribution Code a P for Prior Year, or 8 for Current Year? They are not 50 or older. Thanks is advance!

Looking forward to responses to your post, Peter! Thanks for laying it out that way.

That's it!

Thanks Belgarath. Not going to lose sleep over it!

hr for me - No, the accountant is not an employee of the business. Not sure who signs the federal payroll tax reports.

Ahh. Sorry, My 2 cents. I usually get humor... I agree, but as the TPA, not sure if we should step in and address.

I'm not socializing with my client and he's not in prison.

ESOP Guy - I've been doing this plan since 2005 and deal with the accountant a lot. He is the one who told me they don't work there. At all. They both have other full-time jobs. That's why they cannot make 401k contributions at their other jobs. Yes, they know it's false! Yes, not sure what my obligation is, if anything.

My 2 cents -- they report 1000 hours for his 2 daughters. Their compensation is over $60,000 so no issue with going over any limits re. contributions.

Thanks!

Thanks Belgarath!

After coming across some posts about fraud, was wondering about this scenario: A company's owner gives his 2 daughters a salary, maxes out their 401k contribution, and gives them a safe harbor and profit sharing contribution every year. They get a W2. We have tracked their vesting since they are on the census each year with hours listed. They do not work for the company. Ever. Not even for 5 minutes. Could this be an issue? Is it illegal?

I wonder if my scenario fits this. I have a plan whose owner puts his 2 daughters on his payroll and maxes out their 401k contribution each year. They get the PS and the safe harbor contributions They don't work there ever. Not even for 5 minutes...

I have a plan who uses their accountant to do all payroll functions, including the 401k deposits. In 2014, he reduced a participant's deferral amount so he wouldn't go over the limit. In 2015, he forgot to raise it. In 2016, the participant noticed that he had only deferred $2,400 in 2015 instead of $18,000. The participant never checked his paystub, his investment house statements, or his bank account. Is this a situation where the participant is owed a QNEC? The argument could be made it was on him to notice that the deferrals were never raised.The accountant never notified the participant he was going to do this in the first place. It also affected his Safe Harbor match amount, of course. Thanks in advance!

I have a DC plan that allows terminated participant account balances between $1000-$5000 to be rolled over into an IRA without participant consent. The PPA doc does not address balances under $1000. Can these be cashed out without participant consent?

Thanks so much!

Yes, they are eligible employees.

Thanks, Mr. Bagwell. Heated as in some people do not believe they should be on the test, or listed as keys for 2015.

A plan has 2 new owners as of 2015. Each owns 50%. They were not owners at any time previous to 2015. Do they go on the top heavy test run in 2015, which is for determination date 12/31/16? Our office is having a heated discussion about this.

That's what I thought! Thanks so much!

I have a 401k plan. The owners do not contribute. Is their profit sharing amount for the owners who are 50 and over limited to $53,000 or can they add the catch up amount to that?

On the Form 5500-- I have a DC plan. What is the difference between Line 6(b) Retired or separated participants receiving benefits and Line 6© Other retired or separated participants entitled to future benefits? Thank you in advance!

Good morning. I have a plan with 45 HCEs. The plan has immediate entry for 401k. When I test the Otherwise Excludable employees (includes 4 HCEs) separately the test fails. I have 2 questions: 1. Can an HCE be an Otherwise Excludable employee? The McKay Hochman website seems to say No. 2. If HCEs can be an Excludable Employee, do they take a refund, or do I just go with the Non-excludable test, which passes? Thanks in advance!!