cdavis25

A participant has a Simple IRA, a Traditional IRA, and a non-deductible IRA. All three are separate IRAs. Their employer started a new 401(k) plan that accepts rollovers from IRA and qualified plans. They want to rollover the Simple IRA and Traditional IRA into their 401(k) plan. Do they have to account for the non-deductible IRA and the after tax money, even if they do not rollover that non-deductible IRA? Also, say the 401(k) allows for after tax contributions and in-plan Roth rollovers. Rollover money can be distributed at any time in the 401(k) plan. Can you rollover the non-deductible IRA into the plan too and then, do the in-plan Roth rollover?

Could you write a 457(f) document for a non-profit to provide installments for the distribution and make each installment subject to a risk of FF? i.e. John Doe gets 50k per year say for 5 years. He is 60 now. He has to be employed at age 65 to get 1/5 of the balance of his account. Next, he has to be employed at 66 to get 1/4 of his balance. etc... I am thinking no, but??

A 403(b) plan has a discretionary match. The match goes to all. They want to write the formula for the match to give 3% to anyone that defers and works over 25 hours per week only. Is that ok assuming it passes 410(b) coverage via the ratio test? I was thinking the 25 hours per week would not be allowed because it would require someone to work over 1,000 hours per year to receive a match.

Can a 403(b) plan exclude adjunct professors as a job class? Most of those employees are under 1,000 hours per year. Some might have been a full time employee that went to adjunct status. They are paid by the number of courses/classes they teach. They do not have hours works tracked. Would they have to pass the ratio percentage test or could they use the ABT for coverage? What if they allow them to defer and just exclude them from the match based on their job classification?

Can a non-profit have a non-qualified plan other than a 457(f) or 457(b)?

That was my vote too. Inherited problem...you have to love them like your own.

A participant was paid out in 2012. It was a lump sum cash payment from a 401(k) plan. The taxes were withheld and a 1099R was completed. The check was not cashed. The participant passed away in 2013. Are the funds technically in the participant's hands with the check and belong to his estate or should the funds go to the participant's beneficiaries from the plan?

That was my thought QDRO. My concern it treating everyone equally. I think if the paycheck after taxes is not going to be higher than the repayment, the loan should be refused and that goes for any participant. It would be hard for them to dig deeper into the "well he could make a pre-payment to payoff the loan before the cure period is over".

A participant goes from full time to part time due to the company reduction in hours. He needs to take a loan to pay bills. He is not at the point of hardship and does not have any distributable event. The problem will be his pay will not cover his loan repayment. The loan repayments are payroll deduction or a check for pre-payment only. Does the fiduciary refuse the loan on this basis or do they have to approve it? If the pay does not cover the loan repayment, will the company just not take anything and default at the end of the cure period? Could this really be considered an unqualified in-service distribution?

"The methods for correcting the failures described in this section .05(2) do not apply until after the correction of other qualification failures. Thus, for example, if, in addition to the failure of excluding an eligible employee, the plan also failed the ADP or ACP test, the correction methods described in section .05(2)(b) through (f) cannot be used until after correction of the ADP or ACP test failures. For purposes of this section .05(2), in order to determine whether the plan passed the ADP or ACP test, the plan may rely on a test performed with respect to those eligible employees who were provided with the opportunity to make elective deferrals or after-tax employee contributions and receive an allocation of employer matching contributions, in accordance with the terms of the plan, and may disregard the employees who were improperly excluded." It appears in EPCRS that we do not have to re-run the ADP test to include the improperly excluded. So, no NHCEs means free pass on ADP and thus no failure. This is why I am unsure how the IRS would address this. The client could be aggressive and say zero b/c that is the NHCE rate. My thought was anonymous VCP saying a deferral rate equal to what would have been needed to pass the ADP test. To compound the issue, the improperly excluded NHCE for 2014 is a HCE for 2015. i.e. He made over the comp limit for the half year in 2014. I would not call him a NHCE in reality, but he is by definition for 2014. I guess we could run the ADP test correctly and say it failed. Then, make the QNEC to pass plus earning. However, would that really address the missed deferral opportunity? If you did that, would you consider SCP instead of VCP? Red Solo cup - Toby Keith...come on

So, a "sole" 401(k) plan hired an employee in 2014. He did not realize his plan's eligibility requirements were no service or age requirement per his AA. The employee became a participant on the hire date. That is what you get for cheap. Anyway, the PS portion with earnings is a costly and easy fix. What about the missed deferral opportunity? There are no other NHCEs and no ADP rate to use. Would you assume zero, assume the same deferral rate as the only HCE, or assume a rate to pass the ADP test? This seemed like an easy SCP; however, I am now leaning toward VCP and maybe even anonymous VCP.

We have a spouse that wants to rollover the assets of his deceased wife. They are both participants in the plan. He will simple roll her balance into his balance inside the plan. Is this considered a rollover or transfer? Would you do a 1099R? I am assuming this is allowed. The dark matter in my brain is saying their was a Q/A at an ASPPA conference in years past, but I can't find it.

Ok, I am pretty sure it is SBJPA which most probably know as step two of the refund calcs.

I haven't had to do this in quite a while. The ADP test failed. The related match will be FF, if applicable. Do you use the ADP Excess Amount or the SBJPA Distribution Amount to calculate the related match?

My research is telling me it has to be for A only. The fact that company B spun off of A, A owns a small part of B, and all the participants were in the DB plan while they were with A might make this a gray question. It is not everyday that this situation comes up. Maybe there is an exception and I am not looking in the right area of the code, regs, or guidance, which is the point of posting messages right?

This might be a gray question...anyone interested in commenting?? Company A has a 401(k) plan with excess assets from their DB plan termination that occurred in 2014. They also have another company B that spun off in 2012 and adopted the 401(k) plan in 2012. That made the 401(k) plan a multiple employer plan in 2012. A has a small ownership interest in B. The companies are not a control group or ASG. Company B spun off, but never adopted the DB plan b/c it was frozen in 2012. The participants from company B were in the DB plan when they worked for company A. Can the excess assets be used as Profit Sharing contributions for both company A and B? Or, are they only allowed for A?

The plan uses the SH definition.

Would removal of asbestos qualify as a casualty loss for a hardship withdrawal?

My gut was saying why not too...but I don't want to overlook anything.

Can a participant name a non-for-profit company as their beneficiary?

Loan repayments are not contributions. I guess I would ask the opposite question, why would you accrue it? What if the repayment was by a check instead of payroll deduction. How do you know you are going to get the loan repayment?

How do you report a 12/30/14 loan repayment that was deposited on 1/2/15? I always thought you do not show loan repayments as a Receivable on the schedule H. This plan does use accrual accounting for employee and employer contributions.

Could a Limited Liability Partnership have w-2 and k-1 comp for the partners that counts as Plan compensation? I was thinking it they were taxed as a corp it would be w-2 and if they were not taxed as a corp it would be k-1.

Ok, I think I found my answer and you do not count missed deferrals or match until the ADP and ACP tests are run.

A Participant had a missed deferral and match corrected in 2013. It was for December of 2012 and January of 2013. The deferral went in as a QNEC for the correction and the match went in as a match. Does the match count in the ACP test for the corresponding year?