Pammie57

I had a client send me the following message: I am just wondering what the general rule is/consensus on how they have to get the information to participants. "Has there been any changes to 401K regulations that would allow us to upload our 401K documents (attached) to our eSELFSERVE site for access instead of providing hard copies? Summary Plan Descriptions QDIA Notice Enrollment Form eSELFSERVE is accessible on mobile phones. We use for all our benefits (medical, etc). In the past we were told that unless the associate had a work email, we should print (27 pages +). Please advise" Any help or cites would be great! Thanks!

Does anyone know of a reason that we cannot mail several 5558 forms in one envelope? we mail them certified. WE have about 10 clients who need an extension of their 5500-SF and 5500.

Took over a client - whose 5500-SFfor 2017 was filed using an incorrect EIN. They have terminated the plan after only two years... (no money) and I assume I need to amend 2017 before I file the FINAL 5500 for 2018 using the correct EIN. I am just wondering if I only fix 2018 and mark as FINAL if that will be confusing to the DOL/IRS. Opinions?

A restaurant client had a safe harbor 401k. They terminated the plan in 2017. However, they were supposed to fund the 2017 safe harbor contributions prior to distributing all of the plan assets. They only funded about $5000 of the $15,000 that was due participants. However, during 2018 they paid out all current account balances and the platform show zero for the plan balance. What is the procedure for making the participants whole at this point. They are anxious to file the final return, but there are still contributions due participants. I don't think they have the funds to put into the plan.

Client set up a Safe harbor 401 (k) Plan effective 3/1/2019. They initially wanted a 3 month eligibility with entry dates monthly-following. Now we are in June, and they are wanting to amend their document to say only 60 days wait - (to agree with the wait for health benefits with their company). No one so far has been made to wait 3 months to start deferring. Thoughts?? Any IRS problems that they could run into?

During 2017 a Plan Sponsor bought another company. The other company had a 401k Plan separate from his original plan. During 2018, company 2 rolled all account balances into the original 401k Plan (& plans were amended to be merged) . However, on 12/08/2018 he sold the 2nd company. The participants' account balances are still in the plan. The two companies operated separately (in different states)during 2018. I hope I am making sense - my question is - do I report this as a controlled group for 2018 or a multi-employe plan? If multi-employer, does anybody have a sample of the "listing" that is required to be attached to the 5500? They were separate companies again by 12/31/2018.... Comments or experience with this type of situation??

So do you all see the fees taken pro-rata from participant accounts also? Or just from forfeitures if available?

I am trying to determine if the fees charged by the CPA firm to audit the large plan can be charged to participant accounts or taken from forfeitures. The plan document (SPD) says the following: The Plan will pay some or all Plan related expenses except for a limited category of expenses, known as "settlor expenses," which the law requires the employer to pay. Generally, settlor expenses relate to the design, establishment or termination of the Plan. See the Plan Administrator for more details. The expenses charged to the Plan may be charged pro rata to each Participant in relation to the size of each Participant's account balance or may be charged equally to each Participant. In addition, some types of expenses may be charged only to some Participants based upon their use of a Plan feature or receipt of a plan distribution. Finally, the Plan may charge expenses in a different manner as to Participants who have terminated employment with the Employer versus those Participants who remain employed with the Employer. Is this an allowable administrative expense or a prohibited transaction?

So a partnership and an LLC are testing for coverage. The partnership has a huge profit. As long as the crosstested formula passes coverage, can the owners choose to deduct their own contributions form the partnership or the LLC? The partnership has no other employees; all employees are part of the LLC. I can't find anything on this....Need some input.

A partnership with 3 related partners normally funded their contribution separate from another business owned by them with several other people. Until 2018 they were not controlled group. This year, the same 3 people (family members) own both companies. So the question is not If they have to pass coverage as a controlled group of employees/participants, but whether the Owners can fund their $55,000 max contribution through either plan? or do they have to fund it through the 2nd company with all of the employees/participants? It's confusing and I've never run into that before where they wanted to fund it to manipulate profit in one company. Help!

Thanks!

OH and match is calculated per pay period per the document.

I have a plan (client) with a safe harbor match. Their HCE made 166400 before bonus. They only deferred on the base salary even though plan allows deferrals on "irregular compensation." The divided the $18500 between each pay period, and applied the SH Match formula each pay period. Therefore they only matched them $6656 They had bonuses that made their compensation exceed $275,000. They did NOT defer on the bonuses.... I am trying to figure out if they can have the max SH match for 2018 or if they are stuck with the $6656

My client has three owners, and one of them who owns more than 5% has a son-in-law working there. I don't think he (SIL) is attributed the FIL"s ownership, but wasn't 100% sure. The daughter is not an employee.

I had a client call me with a participant wanting a hardship withdrawal. All of his money is in ROTH deferrals. Does he need to request a hardship, or can he just take his ROTH out ? He has not been in the plan 5 years however - only 3. I am not sure of hardship rules as they apply to ROTH.... I can't seem to find anything definitive either. Anybody know for sure? He's only 32 and their inservice rules are age 59 1/2. He does have a true hardship.

Thanks - Currently he is the ONLY employee....

We have a client who makes a ton of money - well over $1,000,000 each year. He wants to put in more than the DC limit of $56,000. He is an S Corp with a W-2. I know very little about how DB plans work. Could he possibly put an additional $225,000 into a DB plan. What about a cash balance plan? Would love some guidance on this. Thanks!

What is the actual deadline for funding their deferrals for 2018? Is it 12/31 or the due date of the tax return. They have only partially funded their deferrals throughout the year? Thanks!

so then his max Safe Harbor 3% NE would be $8100? - somebody calculated it as $8250 (apparently based on $275,000 instead of $270,000. Thanks!

I inherited a plan that runs 10/1/2017 through 9/30/2018. Which year determines max compensation? 2017 or 2018?

Thank you.

A client's employee has submitted a hardship withdrawal request. (plan does allow hardship withdrawals for safe harbor reasons) The employee/participant attached some medical bills, a notice of collection on a student loan for his son , and an estimate to install a new seer heat pump at his residence. He lives in Portland, TN. I assume the only allowable amounts are the medical bills not paid by insurance. I just want to know what you think about the student loan (approx $11,000).... I don't think the heat pump would qualify...not a casualty loss or disaster area. Am I missing something? Input appreciated...

The new owners will own the business 50/50 so yes they are greater than 5% owners... We did highly suggest a safe harbor plan for 2019, but these guys didn't see the big picture and only heard that the safe harbor contribution would be Required each year and be 100% vested. ..... We suggested the match since so few participate and got a No. I don't think they realize they are limiting themselves so much......

A small business client has a 401k Plan that has to pass the ADP test for 2018. They are not Safe harbor. As of 10/1 the 100% owner is selling the stock to two previously rank and file employees . The plan has always passed the ADP test in prior years because the owner only deferred 2 percent more than these employees did. So my question is this - as of the end of the year - who is considered an HCE for the ADP test??. Do the two new owners join the former owner in the HCE group?? - or does the previous owner become part of the NHCE group for ADP testing? There are 3 other eligible NHCE"s who defer nothing. Any way around this for the year of sale? It looks like a possibility of the plan failing ADP. There is no match to consider.

For a 401k plan that begins 10/1/2017 and ends 9/30/2018 - are they limited to $54,000 or $55,000 in contributions (exclusive of the catch-up)? Compensation - 270,000 or 275000? I always get confused on this. Thanks