RatherBeGolfing

Yes. Certain non citizens working in the US do not have to pay SS and Medicare taxes. You can be a non-resident for immigration purposes but a resident for federal tax purposes though, in that case, you are not exempt from SS and Medicare taxes.

If it is a recent hire, chances are good that she is a non-resident. However, she gets W-2 comp so she probably has US source of income. The exceptions for US income in §861(a)(3) are very narrow and on a J-Visa I Im very confident that it will not qualify for an exception. She is not excluded. Remember, the exclusion only applies if: “an employee who is not a U.S. citizen, and who is a nonresident alien for federal tax purposes and who receives no U.S. source income (as defined in IRC §§861(a)(3) and 911(d)(2)) from the employer.” (Source: EOB Ch 8, Part B, Section 3, #4) The non-resident alien exclusion is really only an issue that should come up in a company with foreign operations. Hope that helps. J

Unfortunately, the person being unpaid now (who is supposed to be forced out) probably means that they are missing. When the person is missing, it can easily happen that they are not paid out before filing for Social Security. If, after this year, they are found/forced out, they are just reported again with a "D". I know that is the way it's supposed to work. But I've found that reporting the distribution does not necessarily prevent the SSA from telling the participant they still have money in the plan. You are correct, the SSA is a mess when it comes to telling people that they have assets in an old plan, even when you report them as distributed. But government shortcomings doesn't change our duty to report. It is just a risky position for a TPA to take when it is clearly not supported by rules or regs. In theory, each client they do this for could be on the hook for $5,000 in penalties per return.

Good luck Tom! We got through it with mostly heavy winds here in Tampa, still strong gusts and some rain down here. I hope you get to keep power, I lost it for over 4 weeks when I lived in Jax and the storms went through in 2004. Stay safe Jim

Dang it, no hills here in Florida to run to :/ Luckily, we are not supposed to get the worst of it here in Tampa but you never know with these things,.

Yes, and you can add a fixed match to that (still not matching deferrals in excess of 6%), max out your HCEs, and still be exempt from top heavy

Great, now I have to wipe coffee off my monitor...

You are absolutely correct, you cannot rely on the 80-120 rule for a first year plan because the rule allows you to CONTINUE to file as a small plan. It may be time to reconsider the "auditor" in this case...

If it is a non-EZ plan and you have participants, there is no exemption to the filing requirement simply because you had no contributions / no assets. File the 5500 and move on.

Options are treated as ownership Not sure about RSUs. When you say unvested, is it just a time thing or other restrictions on the option?

If the QDRO is silent on fees, follow your service agreement. In my opinion, it would be improper to charge the the alternate payee unless authorized in the QDRO. As a side note, my service agreement takes this a step further. Even if the QDRO stipulates that the fee should be split, I can collect from the plan sponsor in the event of non-payment from the third party.

I agree, there is nothing to support an exemption from the 8955-SSA based on account balance. Id love to hear their justification though.

Personally, I would be aggressive and use a plan year of 1/1/16. As far as I know, there is nothing that expressly prohibits the practice, and there are at least informal comments made by the IRS to indicate that it would be ok (the aforementioned 1997 comments) . Draft your plan document to use a limitation year of 12 months ending on the last day of the plan year rather than using the plan year as the limitation year if the initial plan year is short. This way you have a 1/1/16-12/31/16 limitation year, and no proration is needed. From Sal's ERISA Outline Book:

So much for a relaxing weekend...

I understand not wanting to use revenue sharing, but do they have a problem with keeping the fees set by using basis points? I just set up a plan last week though a major RK with all non-revenue sharing funds. The still state their fee as a matter of basis points, and are paid by plan funds, just not via revenue sharing.

I would think so. Most documents I have read include some type of language giving the plan discretion. So as a matter of plan policy you should be able to refuse 60-day rollovers as long as you are consistent. for example, my document states:

I see your point, but in this case it is simply impossible for the PA to know all surrounding facts and circumstances. For that reason alone, I would never advise a PA to make this type of call on behalf of the participants. I just don't see how making this type of decision based on some partial facts known to the PA can be prudent.

The ER shouldn't make this decision, period. I'm not going to get on my soap box in regards to auto- enrollment in general, but if you are going to do it, you need to treat everyone as equals. Income & tax rates are not the only factors when it comes to Roth, so it does not make ANY sense for the ER to make this decision for the EE.

1/1/16. The second computation period ends 12/31/15 and he hasn't met eligibility until it is completed.

What right does the plan have to suspend his right to a distribution? No DRO at this point right? And the plan has not been notified of a pending DRO? A divorce does not mean that there will be a QDRO.

Processing times differ from company to company, and sometimes processing gets delayed for whatever reason. Lets look at the literal interpretation of "account balance at death" that ignores the fact that the participant signed and submitted a distribution request. It leaves zero room for interpretation. The argument is that because it wasn't processed, it is included in the account balance and therefore belongs to the QP beneficiary and not the IRA beneficiary. Lets say that for whatever reason processing was delayed and took longer than normal, and during this time, the participant died. lets go as far as saying it was 3 weeks after the participant submitted the request. I doubt anyone's document says account balance at death unless there is an unreasonable delay. Would you advise the PA to cancel the distribution request (properly executed and submitted by participant) and pay the QP beneficiary and sleep soundly?

Can I have their contact info, I might need them after this October 15 since the IRS decided to audit two clients with less than month before the October 15 deadline.... As far as the loan is concerned, I don't see a problem either. The loan was repaid, where the money came from doesn't matter for plan purposes. May have tax implications for the payee/payor but the plan is fine.

I agree. It is simply unreasonable for the beneficiary to change depending on how long the it takes to process the form. Once the Participant has made his/her wishes clear by submitting the request, that shouldn't change just because the provider took three days to process rather than two. From the providers side, it would mean possible litigation for every distribution request they process since the party snubbed due to the extra day or two would claim they were injured due to the providers failure to timely process. Possible litigation would not necessarily translate into any liability. Can you imagine someone winning a lawsuit based on failure to process a claim on a timely basis when the claimant died after only three days, rendering the election invalid? Industry standards are surely not so fast as to render a three-day turnaround insufficient. No litigation automatically translates to liability, but if processing time is the determining factor between two different beneficiaries, the processing provider would always be open to litigation. Fault or liability is not the only factor in litigation, it is also costly and time consuming. Provider issues aside, I can't think of a reason why "industry standards" should interfere with the participants executed and submitted request for a distribution.

I agree. It is simply unreasonable for the beneficiary to change depending on how long the it takes to process the form. Once the Participant has made his/her wishes clear by submitting the request, that shouldn't change just because the provider took three days to process rather than two. From the providers side, it would mean possible litigation for every distribution request they process since the party snubbed due to the extra day or two would claim they were injured due to the providers failure to timely process.

This made my day. Probably shouldn't have laughed as hard as I did since it is a serious problem, but damn that was funny! Now quick, somebody make a meme with kittens asking "can I haz 401k?"