doombuggy

Plan was set up in 2014 with an age 21 and 6 mo of service entry requirement, monthly entry dates. I found out this week that the census I was provided was not all employees, just those who participate, even though our form requests all info. 1 part timer apparently went full time this month and the client asked me if she has to wait 6 months to get in since she was hired in January 2014. This is how I discovered this problem. The annual val and 5500 is complete and filed. We are waiting for a corrected census from the client. Isn't the correction for the ER to fund a 3% deferral for those ees that were not offered the plan timely? This is a deferral only plan.

3 person PSP where the owner has a life insurance policy within the plan. She paid the premium of $6500 by moving assets out of the profit sharing pooled account. The life insurance policy is titled under the plan. Would you put this $6500 on line 8d - benefits paid including direct rollover and insurance premiums to provide benefits, or maybe on line 8g - other expenses?

Plan is new - started 1/1/14. It has almost $71,000 in profit sharing receivables as of 12/31/14. No other type of receivables. Would you include the PS rec'bles in the top heavy test? There were also rollovers into this plan of a significant amount. I have them marked as a regular/outside rollover. They came from a terminated plan but from a different plan sponsor - company name and EIN entirely different. Because of this, I did not mark them are related. I assume that all participants were given an option to roll the money from the old MPP under the other company to this new plan or put it into an IRA. Thanks for your thoughts.

if they need new 1099-rs, then I assume John Hancock needs to get involved, as they held the assets....

I am working on a plan that failed the ADP test for 2014. 2 HCEs need refunds. They terminated in October and took their assets out in December 2014. Both rolled their assets over to IRAs. So what do we do to "correct" the test failure? let these former participants know that they need to take $x out of their IRA as an ADP refund?

So I guess my only need for the PTIN is if I need to file/complete a 5330 for a plan? every time I sign up for an IRS phone forum/webinar, it asks me for my PTIN.

When I became an ERPA in 2010, I got a PTIN. Notice 2011-91 states that Section 10.4b of Circular 230 requires individuals who want to become an ERPA to have a valid PTIN and Section 10.6d3 requires ERPA to have a valid PTIN to be eligible to renew their status as an ERPA. someone told me yesterday that it isn't mandatory. have "the rules" changed since this Notice was issued?

I have had this issue crop up over 2 plans in 2 days. Both plans allow for in-service w/d and a distribution if you separate from service. GMK makes an interesting point, however. It gave me a thought that in that example would I end up 100% vested if I left my money in that plan until I was age 65, even though I don't work there? Making the assumption that I am less than 60 YO and the plan 100% vests a participant upon retirement....

We are having a "discussion" about the wording of the Normal Retirement age in a couple of new documents I have been asked to review. Do you think the following choices are the same or different - and why do you think that? Choice #1: Attainment of Age 65 and 5 Years of Participation. Choice #2: The participant's 65th birthday or the 1st day of the plan year containing the participant's 5th anniversary of joining the plan, if later.

Yes, sorry, the father is the one who needs the RMD. Like I said, I am not quite back on east coast time, lol!

New plan for me and the father of one of the owners was born in 1940. Since the son's ownership is attributed to father, I am assuming he needs an RMD for 2014 (calendar year plan). I just got back from Hawaii, so my brain isn't firing on work mode yet...

Thanks for the responses! I have been on vacation so I haven't heard what this plan sponsor decided yet. We filed his 5500 on a cash basis. There are 3 people in the plan (owner included) and he indicated he would't have the actual funds to deposit until the end of this month.

One of the plans that I have is a sole prop and his extension is tomorrow. the plan is a 401k Profit Sharing plan with a SHNEC feature also. Today he is asking me the following: Is there a big penalty if the [profit sharing] money goes in a bit late? We have a big chunk of change coming in at the end of the month. I had told him that if he's going to deduct the PS on his 2013 return, then it needs to be deposited by tomorrow. I did find something in the EOB that talks about mailing the deposit and having it postmarked tomorrow. I don't think he is going to go this route, but what are the penalties if he makes this deposit late? I am assuming that this would come to light in an audit. The plan consists of himself and 2 staff members.

I have a new plan (new to us) that we have just gone through a conversion from Met Life to Nationwide. The plan apparently has some loans. There were two loans as of 12/31/13, yet three more loans were taken out from MetLife just prior to the black out period. The plan sponsor has stated that the loans were collateral loans made between the participant and MetLife and that the ER was not involved or aware that they were being granted. The participants paid the loans back to Met Life on a quarterly basis. The loan application that was provided to us (the TPA) by MetLife has the amount initially borrowed and length of loan, but not amort sch, no interest rate and no end date. Nationwide has been asking for this data so that the loans can be set up on their site so that they can be tracked. Have I mentioned that their plan document states loans are to be repayed via payroll, etc. I have pretty much had it with these people (toss in the broker) and I don't know what else to do about this fiasco. Anyone have a similiar situation in the past? It's like trying to put the puzzle together when you are missing a few pieces....

Can a Charter School have its own 401(k) plan? or should it have something else? Would it depend on the state they are in?

Yes, the total was $11,000. The $5500 x2 has been earning interest in the brokerage account of the owner's 401k assets and the wife's since August 2012. The pooled account where everyone's ER assets are supposed to be (that is a whole other story...) has been short that $11,000. My thought was to do the lost earnings on that money back to the dates I indicated because the hCES have been earning interest on money that technically isn't theirs (they don't get SHNEC or PS) and all the rank & file are getting are fees...

I found out that one of my plans did not fund their 2012 ER (P/S and SHNEC) by 9/15/13. the owner had deposited $5500 out of the corporate account into his and his spouse's 401k brokerage account in August 2012 and in July 2013 they were told this wasn't allowed (not deferrals from salary). he was fine with that and we instructed the broker to move that money out and into the pooled account (plan only allows individual accts for 401k deferrals, trustee directed pooled account for ER $). Earlier this month I requested copies of all the brokerage statements for 2013 and found that this money was never moved. The client did deposit a check last August for the difference still due for the 2012 P/S and SHNEC, but I am short $11,000. The tax return was extended. Where can I find the cite to correct this? I have told the broker that she needs to move that money asap (she was told to move it 3 times last year) and that Lost Earnings need to be made up on that money. From 9/15/13 for the P/S and 12/31/13 for the SHNEC? Does anyone know where on the DOL or IRS sites I can find info to forward to the broker on the correction? The bottom line is that she didn't do what she was supposed to do.

I just got off the phone with the client as we are trying to sort out the "group" (its medical). I want to say that of the 3 K-1s, only 1 of them would be mentioned in the plan doc done in 2009. I am going to guess that the 1 group was created later and then in late 2013, the 3rd group was created, hence the 3 K-1s. the group that was "interim" is the one with the negative. All the clinics in the group are under LLC "A." LLC "B" - what I believe to be the group created after the doc was drafted - has no employees but is owned by the 3 owner of LLC "A" plus 2 others (who are less than 5% owners) LLC "C" is the new entity that is owned by LLC "B" plus 2 others - 1 of which is an individual who is a less than 5% owner, the other is an LLC. Can I make it any more complicated?

What about the K-1s that have a positive number on line 4 and 14?

I have a client that has 5 owners. They each have multiple K-1s. Owner #1 has 1 positive line 14, 1 negative line 14 and a W-2. Owner #2, #3 & #4 has 2 positive line 14 and 1 negative line 14. Owner #5 has a negative K-1, plus a W-2 and 1099. Owners #1 and 5 are less than 5% owners. They all made salary deferrals. Owners 2, 3 & 4 have negative net comp. The negative K-1s have a positive number on line 4 guaranteed payments, but a negative number on line 1 ordinary business income (loss). so my question is what do I report as compensation? This plan has SHM. I assume that they can defer on the "positive" or guaranteed payments off those K-1s?

it won't let me edit my last post as I forgot to ask: Where it says paid preparer, I assume that I am putting my info in there, along with my PTIN?

So I am filling out the 5329 (still waiting on data for the RMDs but want to get ahead) and it asked for the name of the individual subject to additional tax. Since there are 4 benes for each of the 2 dec'd participants, does that mean I have to fill out 8 of these forms?

Are there any penalties for having the 2013 RMD issued in 2014?

OK a plan that we just acquired called me on Monday to tell me that 2 RMDs should have been done in 2013 and was not. Why didn't I catch this? This was a recent acquisition to our TPa firm, and we rec'd a copy of the 410b and ASC 401k report (asset data only, no census or plan specs). These 2 participants were not on the proposal data we rec'd since they no longer work there. It also turns out that they have died (not recently, in 2010 and 2011). So we need to get these issued right away, but what else do we need to do to "correct?" Apparently 4 of the siblings are the benes. These two were owners as some point in the past. I have done many RMDs since 1995, but I don't ever recall doing one for a bene, let alone 4. Do we calc the RMD on the dec'd's age then divvy it up, or on the age of the youngest bene? I am still waiting on a copy of each beneficiary form for the dec'd participants. I forgot to ask this at the ERPA Workshop and APC that SunGard had here in Orlando this week (and I went to). So I am turning to y'all for help!

If they were allocated in 2007 and again in 2009 (in theory, as that is what I would have done), of the 5 participants who would have gotten an allocation, 1 was an owner, 2 were owner's sons/hces, and the other two were NHCEs (sister of owner and another employee). Allocation now would be either 2 newly elig NHCEs and possibly owner. Will research further, but I can't see how we can increase our fee to research an error like this. My frustration is showing because I have found lots of errors that I have had to clean up in the last year....thanks for listening and adding your 2 cents!