Tom Poje

since the instructions say 'in general' I interpret that to mean a little leeway on the circumstances. under the instructions when not to report someone is the line 'before the date the form is required to be filed' (or put another way "If you have some knowledge about someone before the form is required to be filed take it into consideration when filing the form. so you have someone who was paid out in 2016 but before the 2015 form was required to be filed. I would read that to mean you could report that person as a D on the 2015 form. Granted the person in this case was already reported as an A, the whole purpose of reporting someone as a D is to get him 'Deleted' from the SSA system. in the great scheme of things it shouldn't matter whether you report that person as such in 2015 or 2016. In general, for a plan to which only one employer contributes, a participant must be reported on Form 8955-SSA if: 1. The participant separates from service covered by the plan in a plan year, and 2. The participant is entitled to a deferred vested benefit under the plan. When Not To Report a Participant A participant who has not been previously reported is not required to be reported on Form 8955-SSA if, before the date the Form 8955-SSA is required to be filed (including any extension of time for filing), the participant: 1. Is paid some or all of the deferred vested retirement benefit 2. Returns to service covered by the plan and/or accrues additional retirement benefits under the plan, or 3. Forfeits all the deferred vested retirement benefit

if it involves a distribution of an HCE then it just smells bad, especially if you have paid out some NHCEs earlier in the year

my understanding you look at total account balance and determine the min distribution if taken all from Roth, no taxes (assuming 5 year rule) if you had a profit sharing balance as well, you wouldn't say I get a min distr from deferral, one from roth and one from the profit sharing,, but I could see how the idea might pop into the head if you only had deferral and roth. or as I recall if you had after tax (not Roth) then there is a rule about taken things pro rate, but that info is buried so deep in the skull I don't remember. by the way, if it was a Roth IRA there is no min distribution (at least at this time)

then why does it say 'deemed' to have been made and 'to the extent a distribution would otherwise be required'? this appears to be different than in the case of an on going plan in which a terminated HCE was paid out. there is no special language for that situation.

The IRS Q and A had the following 'advice' https://www.irs.gov/Retirement-Plans/Frequently-Asked-Questions-Regarding-the-IRS-Compliance-Questions-on-the-2015-Form-5500-Series-Returns 6. Am I allowed to use the plan sponsor's EIN in place of getting a trust EIN to answer the question on trust information? No. You should use the trust EIN to report the information on the Form 5500-series returns. If there is no trust EIN, the EIN used on Form 1099-R and Form 945 may be used for this purpose. We encourage trustees to get a trust EIN from the IRS. If a trust’s EIN has been deactivated, the trustee can fax a request to the EP Entity Control Unit in Ogden, Utah at (801) 620-7116 to reactivate it.

At the 2009 ASPPA Conference, Q and A #62 (of course the caveat is such answers do not necessarily reflect an actual Treasury position) Question: The final QACA regulations require a QACA to use a safe harbor definition of compensation for deferrals and employer contributions as of plan years beginning on or after 1/1/2010. Does this also apply to SBJPA (i.e., 401(k)(12)) safe harbor plans? If a plan uses unsafe definition of compensation and then fails the 414(s) compensation test, what is the remedy? IRS Response: Under Treas. Reg. §1.401(k)-3(b), the safe harbor contribution under the "old style" (i.e., 401(k)(12)) safe harbor must be based on "safe harbor" compensation, which requires a definition of compensation that meets IRC §414(s) (with some limitations). If the compensation used for the employer contributions does not meet these rules, the safe harbor contributions are likely insufficient and the CODA (and likely the plan) won't meet qualification requirements. The correction would be to make up the difference in contributions using a §414(s) definition of compensation plus earnings for all affected years. By the way, the compensation eligible for deferral in a 401(k)(12) safe harbor plan does not need to be nondiscriminatory under §414(s), but only reasonable. On the other hand, deferrable compensation for QACA purposes must meet the §414(s) definition. See Treas. Reg. §1.401(k)-3(j)(1)(i), last sentence. (And you might want to change the definition of deferrable compensation in the future.)

I don't think about it often, but there is the last few sentences of [Treas. Reg. § 1.401(k)-2(b)(2)(v)] If I read it correctly it seems to say in the case of termination of a plan you can 'get out' of actually making a corrective distribution. seems strange, but just why the heck is this even in the regs otherwise. In the event of a complete termination of the plan during the plan year in which an excess contribution arose, the corrective distribution must be made as soon as administratively feasible after the date of termination of the plan, but in no event later than 12 months after the date of termination. If the entire account balance of an HCE is distributed prior to when the plan makes a distribution of excess contributions in accordance with this paragraph (b)(2), the distribution is deemed to have been a corrective distribution of excess contributions (and income) to the extent that a corrective distribution would otherwise have been required. [Treas. Reg. § 1.401(k)-2(b)(2)(v)]

The IRS website had the following Q / A for GUST https://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Plan-Language-Issues-for-GUST-and-EGTRRA Are most GUST plan restatements written to be effective in 1994, 1997, or in the plan year of adoption? Does it matter as long as the specific provisions relate back to the appropriate effective dates? In our experience, the most frequently occurring plan restatement effective date has been the beginning of the 1997 plan year. Assuming there are no other relevant issues involved, the general effective date of the restatement does not matter as long as the correct effective date of each GUST provision is clearly defined in the document

at the 2010 ASPPA Conference, Q and A #3 the following was asked: DC plan is top heavy and has a plan year ending 12/31. The plan terminates on September 15, 2010. Normally, TH minimums are provided only if the employee is employed on the last day of the plan year. (Assume that there are salary deferrals during the year so that, if a top heavy minimum is required, it needs to be made.) Questions: (1) For the 2010 plan year, is 9/15/2010 treated as if it were the last day of the plan year, so that only non-key employees who are employed on that date are entitled to a TH minimum? (2) If (1) is Yes, is the 3% minimum calculated for compensation from 1/1/2010-9/15/2010? IRS response: (1) Of course, if there is no employer contribution, there would not be an obligation to provide top heavy minimum contribution. But, if there were contributions to keys during the year, including elective deferrals, there is a top heavy minimum based on compensation and employment through 9/15/10. Plan must liquidate within a reasonable time under Rev. Rul. 89-87 or else 9/15 date may not be reasonable. There is effectively a short plan year for top heavy purposes. (2) yes ............ of course, the response provided do not necessarily reflect an actual Treasury position, but I would hold this makes sense. it is the plan's term date and not the payout date that counts (unless as noted by the IRS , the payout does not take place within a reasonable time, my understanding 'a year' is deemed reasonable.

years ago 'chicken little' got hit in the head with the following. I thought the sky was falling but when I woke up the following file was lying next to me. maybe it will help. not sure where it originated from but what the heck. controlledgroup.xls

prior year testing makes little sense with a discretionary match precisely because of the situation you are in. some documents permit you to limit the match to HCE to prevent failure. possibly if you have some 'extra' ADP for the NHCEs you could shift some to the ACP test. haven't heard that being done in a situation like this, but last year people were eligible for a match though none was made. this is different than if people weren't even eligible for a match, so I believe you can do that

As for who the amendment has to cover, EPCRS is clear: Appendix B section 2 .07(3) Early Inclusion of Otherwise Eligible Employee Failure. (a) Plan Amendment Correction Method. The Operational Failure of including an otherwise eligible employee in the plan who either (i) has not completed the plan’s minimum age or service requirements, or (ii) has completed the plan’s minimum age or service requirements but became a participant in the plan on a date earlier than the applicable plan entry date, may be corrected by using the plan amendment correction method set forth in this paragraph. The plan is amended retroactively to change the eligibility or entry date provisions to provide for the inclusion of the ineligible employee to reflect the plan’s actual operations. The amendment may change the eligibility or entry date provisions with respect to only those ineligible employees that were wrongly included, and only to those ineligible employees, provided (i) the amendment satisfies § 401(a) at the time it is adopted, (ii) the amendment would have satisfied § 401(a) had the amendment been adopted at the earlier time when it is effective, and (iii) the employees affected by the amendment are predominantly nonhighly compensated employees. as to whether a determination letter is required...I think it's clear as mud. in light of the fact they are no longer taking determination letters for individually designed plans, they probably don't really want to bothered with them in regards to this type of correction under EPCRS, but I don't believe they have ever really made that "official", but I could have missed that.

Agree there is no reason a plan couldn't have both SHMAC and SHNEC, and exclude the HCEs from the SHNEC. if the NHCEs are not deferring then they don't get the match, but that is different then saying a plan provides a safe harbor match to the HCEs and a 3% SHNEC to the NHCEs.

I don't think you can do that 1.401(k)-3(a) says if arrangement satisfies (b)[3% nonelective or © safe harbor match (b) requires all eligible NHCEs to receive but what you suggest does not provide it to those who are deferring

as far as what? I know VOYA imports into a Roth Rollover account and for the rollover account you indicate it accepts roth contributions

hurray, they have concluded you can use the 'greatest' of exclusions e.g. a full time employee hired 4/3/2015 is an otherwise excludable employee until 10/3/2016 (1st day of plan year or 6 months after completion of 1 year) thus if he quit 8/4/2016 he is still otherwise excludable. OE memorandum.pdf

the original safe harbor notice (98-52 IV.H) had the following language, nothing has changed since then (e.g. just because QACAs didn't exist at the time the original notice was issued, there is no "we make an exception to the hardship rule in regards to QACAs" For purposes of this notice, safe harbor matching contributions and safe harbor nonelective contributions are matching and nonelective contributions, respectively, that (1) are nonforfeitable within the meaning of § 1.401(k)-1( c), 2) are subject to the withdrawal restrictions of § 401(k)(2)(B) and § 1.401(k)-1(d), and (3) are used to satisfy the safe harbor contribution requirement of section V.B. Accordingly, pursuant to § 401(k)(2)(B) and § 1.401(k)-1(d), such contributions (and earnings thereon) must not be distributable earlier than separation from service, death, disability, an event described in § 401(k)(10), or, in the case of a profit-sharing or stock bonus plan, the attainment of age 59 ½. Pursuant to § 401(k)(2)(B) and § 1.401(k)-1(d)(2)(ii), hardship is not a distributable event for contributions other than elective contributions.

maybe the same folks who call me at home from "Windows" and "Dell" telling me they noticed my computer has a virus, and they can fix it for a modest fee.

Andy - it was 1998 when I obtained the notes not 1988, and only saved because it pertained to cross testing, though I have never used it. but enough useful info in those notes (at least I think) to get one started

yes, but an awful lot of web sites have come and gone in the last 21 years including, as I recall, one that lasted a few days - BenefitsLink.org - trying to capitalize on your good name before you shut that down,

21 years old this week! you have had to put up with my dry humor for many of them, guess you can officially have a drink now.... all kidding aside I can never say thanks enough for those who have shared their knowledge, inspired me to learn more and kept me updates on the latest pension insight and news. Many, many thanks to those I consider as good friends though I haven't seen or met them, those I know by name only (and those extra little side comments that sometimes appear) It truly does make a difference to me. (plus I even received a free coffee mug a few years ago!)

well, the following might help the first 2 pages from an ASPPA talk by Richard Bednarski (1998) gives a basic explanation and the last 2 pages a worksheet (and a sample) by Larry Deutch which is at least as old and the brain gears in my head squeaking along just enough to remember I even had these notes because the info poured out of the head too many years ago when I rolled over in my sleep. sorry, should have worn ear plugs. poje useless and secret files.pdf

must have been a lot of complaints from certain higher-ups. https://www.irs.gov/pub/irs-drop/a-16-16.pdf the announcement describes things this way: Following publication of the Proposed Regulations, the Treasury Department and the IRS have given additional consideration to the potential effects of the provisions that would modify §§ 1.401(a)(4)-2© and 1.401(a)(4)-3© on the adoption and continued maintenance of qualified retirement plans with a variety of designs and have concluded that further consideration will be needed with respect to issues relating to those provisions. Accordingly, the Treasury Department and the IRS will withdraw the provisions of the Proposed Regulations that would modify §§ 1.401(a)(4)-2© and 1.401(a)(4)-3©. ...... so I guess something is coming eventually, but we don't know what.

the cite is 1.401(k)-3(e)(1) ... the rules of this section are adopted before the first day of the plan year...

I had posted this elsewhere, perhaps the rev ruling (since this says it is only an excerpt) even says, but I would think the return under 402(g) is a tax deadline so it would be extended as well Here is an excerpt from IRS Revenue Ruling 2015-13: “The term ‘legal holiday’ includes a legal holiday observed in the District of Columbia…. Emancipation Day, April 16, is a legal holiday in the District of Columbia [D.C. Code § 28-2701 (2010)]. When April 16 is a Saturday, the preceding day is the observed holiday.” That means Emancipation Day will be observed on Friday, April 15, 2016. Since Emancipation Day is a legal holiday, it gets precedence over the April 15 tax deadline. Here is another excerpt from IRS Revenue Ruling 2015-13: “Section 7503 of the Code provides that, when April 15 falls on a Saturday, Sunday, or legal holiday, a return is considered timely filed if it is filed on the next succeeding day that is not a Saturday, Sunday, or legal holiday.” That means the Federal tax deadline is pushed to the following Monday. Therefore, most individuals will have until Monday, April 18, 2016 to file their income tax return. Note that this also affects the deadline for the first installment payment of estimated income tax (see below).