pjbaer

I have a plan with a 5% owner that has been taking RMD's each year since turning 70.5. The plan also has ADP/ACP testing. This year the plan failed and the 5% owner had to take an excess distribution from the plan. Would this count as a part of his RMD?

This seems to be a standard when a client moves onto another TPA. We usually hear lack of response or high invoices as the reasoning for finding another firm. The one that we just took over also has a new day-to-day contact. It is a medical practice and the doctors don't pay a lot of attention to detail such as ensuring that they have all of the reports needed before terminating services.

On occasion we take over TPA services from another TPA firm in the area. The prior firm does not cooperate with the transition and in some cases, the plan cannot locate any prior year reports that provides crucial information related to plan assets, census and receivables. Is there any formal organization where the plan can file complaints?

Thanks, this was my thoughts as well. It has been debated around the office on what is correct.

We have a client that has an LLC where the employees are paid and each of the three partners have their own s-corp. The LLC and two partner's have a simple plan. The other partner wants to have his own 401(k) plan. Each partner is a 33% owner of the LLC. Can the one partner have his own 401(k) plan?

My question is related, a plan has nine months of service and then plan entry is monthly. An employee meets the nine months of service on April 1st. Plan entry is then May 1st. Payroll dates are the 1st and 15th of each month. Would the plan use compensation and begin matching based on the payroll date of the 15th since that would then be all of May's compensation? May 1st payroll would be April's compensation and wouldn't be eligible for match?

Our prototype defines compensation either the entire year or just from the plan entry date.

When we set up a 401(k) plan, this is one of the questions that we ask the plan. If you wait and calculate match at year end, then it will be on the full year of compensation regardless if a participant deferred or not. If they calculate match on a per-payroll basis then if a participant doesn't defer they don't get the match. It is usually a cost saving measure for the plan to match on a per-payroll basis. If a participant is deferring the limit on a couple of payrolls each year then they miss out on match compared to deferring over the entire plan year.

We have a safe harbor enhanced 4% match 401(k) plan. The only two participants are a step-mother and a step-son. The step-mother deferred and received a 4% safe harbor match. The step-son did not defer. The step-son made double in W2 wages compared to the step-mother but both wages are below the integrated level. With that in mind, the step-mother can only get 21% maximum in a profit sharing contribution. Can the step-son also only get 21% or can he receive the entire 25% in a profit sharing contribution? If the plan has a prorata profit sharing then the step son can only get the same proportion in profit sharing as the step-mother?

I have two plans that will require a top heavy test: Plan A started October 1, 2014. The key employees are the owner and his wife. The wife was not taking wages prior to the opening of the 401(k) plan on October 1, 2014. Is she included or excluded for the top heavy test? Plan B has an owner, her husband is the office manager and the husband's adult son from another marriage works there as well. He was not adopted by the owner, he is a step son, is he included or excluded from the top heavy test?

I have a doctor client that has six corporate entities. Five of the entities have adopted the 401(k) plan of the main entity. The doctor also has a nanny that is paid through personal funds, not through any of the corporate entities. Does the nanny need to be included in the 401(k) plan?