ratherbereading

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!!

Good point. I actually found proof that ERISA plans are exempt from CIP as someone mentioned earlier. I have imparted this wisdom to Matson Money.

That's what I think to, but they insist they are correct ... I asked them to provide me with the language in the Patriot Act that applies to 401k plans. No response.

Yes, I am actually telling you everything. The Trustee (also the Plan Administrator) agreed that this participant should not have contributed without an ID and did not prevent Matson from distributing his money. I had no knowledge about it until after the fact.

The participant is not terminated, however, so he shouldn't have gotten his money.

In the continuing saga of this story ---- the plan paid him out, which is a prohibited transaction. How is this fixed? It's a small amount $160 (401k) and $40 (match). It's already been done, so it can't be undone. My instinct is to tell them to let him start participating and hope the plan doesn't get audited. Now the investment company says he can contribute without a picture ID, but he cannot withdraw his money. He refuses to get an ID....

The issue is this participant has NO ID at all from anywhere, and doesn't seem in a hurry to get one. The financial advisor works closely with the financial institution in question, and the my contact (not the Trustee or Plan Sponsor) believes everything he says. He discourages the client from going anywhere else. I'm not sure, however, the Trustee knows what's going on.

I have a client whose participants all have individual accounts at Matson Money/Trust Company of America. They receive statements that say "xxxx 401k Retirement Plan FBO Participant Name." The plan does not exclude ANYONE from participating. One participant has no ID (he moved from another state and has not gotten a current state ID). The company hired him based on his social security card and previous ID. Trust Company of America refuses to open an account for him citing The Patriot Act. They returned his deferral money and matching contribtuions. Now the plan is in violation of the plan document. Anyone ever come across this? Thanks in advance.

Hi. I have a participant that was paid out in error. Luckily, she never cashed the check, so the distribution was reversed, and her account made whole. How do I figure any gain/loss associated with her account while her money was gone? She was paid out 9/28/15 and the money went back into her account 1/22/2016. Luckily, she has only 1 fund and I have the unit values for said fund for each day from 9/28/15 - 1/22/2016. Thanks in advance!

Thanks ETA Consulting. They are basing it on the fact that they don't want to pay $350 for the amendment...!

One of my client's changed the name of their business. We advised them to change the business name in the Plan document and they refused. Does it matter?