CuseFan

Yes, but any potential corrections, additional contributions, etc. that may be required as a result of the audit findings would still need to happen through the plan/trust and what gets adjusted in a prior year could change something in a current year. However, if you terminate effective 12/31/2018 but don't distribute until sometime later in 2019, hopefully the audit will have been resolved and necessary adjustments made to be able to do that.

First, check your document language for when a person goes from an ineligible class to an eligible class (or vice versa). Yes, service from 1/1/2018 counts and by 12/1 eligibility has been satisfied. Assuming under plan terms (s)he enters 12/1, the next step is to look at definition of compensation and whether or not pre-participation comp is included/excluded. If excluded (and plan is not top heavy), use comp from 12/1 for all purposes. If top heavy or pre-participation comp is not excluded, then I think you use full year. I'm not aware of any prohibition on non-US source income.

The plan document should state the basis on which compensation is determined and upon which allocations are made, including the applicable time period. Unless the document says something different, you allocate 2018 calendar limitation year/plan year contributions on the basis of 2018 compensation. The fact that there is a different fiscal year does not impact the allocation, it only impacts the tax-year of deduction. It appears the prior TPA was allocating as if the plan year was the same as the fiscal year, which as you surmise, is wrong.

or don't pay it and let the participant know what it feels like when he has to pay a $.15 excise tax!

IRS would look at all the facts and circumstances. Use of the words "called back" indicates to me that this was a layoff that could have been expected to be temporary and not a termination of employment. Also, I would look at how long the person was "terminated" and what the plan language says. If there was no break in service then upon rehire, the plan likely says it was as if the employee never terminated. But this really looks through the context of an employee quitting to get their retirement funds and then showing up to get their job back afterwards. If the separation was employer initiated then I'm more comfortable with the payout - but again, I think the F&C have to support this. Were all employment related benefits terminated, COBRA offered, etc. I also tend to be more conservative in this area.

Wow, that's funny. So are you a long suffering bitter and pessimistic Lions "fan" or just a Lions hater? Must be the former because there's no way a fan of another team - even the Bears, Vikings or Packers - could be so ambivalent toward the almost always irrelevant Lions.

I thought there was limit to doing this either once per calendar year (in which case you may be OK) or once per 12-month period (in which case you're not OK). I don't deal with IRAs much, but I think it may be the latter and the reasoning is to prevent exactly what your client is doing (whether intentional or not) - essentially maintaining an ongoing interest free loan from her IRA through a series of withdrawals and redeposits/rollovers.

He should also know that solo plans with loans are an IRS audit magnet (if the plan has assets sufficient to file).

The golden age of pensions only existed in the large industrial employer and unionized space, so it's not like the majority of American workers had one. Now, the only active (unfrozen) pensions seem to be in financial services and the small tax-deferral type cash balance, but those almost never provide lifetime annuity income. And the large active financial services industry pensions are mostly cash balance as well, so those with lump sums don't necessarily provide lifetime income in practice. As you note, the old rules could be harsh - and even the post ERISA rules (which the aforementioned class-year vesting was still around until TRA-87 I believe) were no bargains. I came in post-ERISA but I remember 15-year vesting schedules (but they were graded starting at 5 years). Forfeiture upon pre-retirement death, no spousal protections, etc. - all those were improved post-ERISA. But, back then, most employees usually stayed with an employer for their career, or maybe changed jobs once or twice during their 40-45 year career. Then the corporate raiders and over funded plan terminations took over in the mid to late 80's and the loyalty/social contract between employer and employee was broken forever as cost-shifting ushered in the 401(k) plan as a replacement benefit instead of a supplemental benefit. Hence the need for more protections and shorter vesting schedules and the plethora of employee notices and disclosures. Sometimes you need a good soap box rant and a stroll down memory lane - but as Billy Joel sang in Keepin' the Faith, the good ole days weren't always good and tomorrow ain't as bad as it seems. peace out!

I don't think the order matters, because there are lots of plans that make quarterly contributions for the current year but then have a 9/15 contribution for the prior year.

The plan is obligated to make the payment. The unresponsive participant's failure to cash the checks (assuming you know they are being received) does not change that obligation nor the tax liability. Explaining this to the participant may help.

Agreed. The only time you are allowed to remove forfeitures from a DC plan and give back to employer, if my memory serves me correctly, is 415 suspense/forfeitures upon plan termination - not something that happens every day.

Generally you use the first day of the current (or possibly subsequent) plan year, because the document should have embedded effective dates for various PPA provisions.

mandatory disaggregation between union and non-union employees so you essentially treat as separate plans for coverage and nondiscrimination regardless

Correct.

Look at all the stock drop lawsuits. I believe a couple involve a single publicly traded company stock fund that used to be, but then was no longer, an employer security with respect to the plan (because of a spin-off/sale transaction). Not sure if the Deere case was one of those. Basically, if ABC company wants to offer a Facebook only stock fund, then ABC fiduciaries have an ongoing responsibility to monitor and evaluate Facebook as a prudent investment for the plan.

As someone who also was a church treasurer/finance chair for far longer than I wanted to be, my understanding is that clergy are generally considered self employed for some purposes (such as SECA - self employed FICA and Medicare) but are considered employees for other purposes, including retirement plan participation. My wife was a UMC pastor for a number of years, she had to pay SECA but participated in the Conference retirement plans and could not do a solo/self-employed plan. But I think it also depends on the facts and circumstances. A "traveling" pastor who fills in at various churches across denominations for a speaking fee is probably self employed for all purposes. There is a great/extensive IRS publication - which I don't have any more - google it (517) which has all the various tax rules regarding clergy and I highly recommend it if you deal with clergy - saved me many a battle with new clergy coming from churches that did things wrong, but I digress. Good luck.

A hard frozen plan - or any DB plan in which no HCE benefits - satisfies 401(a)(26) automatically, provided you aren't giving any cost of living increases or adjusting benefits for increases in the 415 limit. You shouldn't need to do this.

"deferred" (not referred) - so paid as of the RBD as opposed to the first calendar distribution year (attainment of 70 1/2)

and don't forget, even if there is a last day rule, there may be exceptions to that (and hours) for death, disability and retirement - so if you had any of those occurrences I think you're precluded from amending the formula.

I would say no. This is similar to an old scenario where employers automatically moved terminated participant balances into a MM fund. The IRS deemed this a detriment/impediment (don't remember their exact wording) to an employee's consent which invalidated their "voluntary" election to a distribution. That is, you can't coerce someone to take a distribution by treating them less favorably than current employees. However, if the stock fund is an ESOP, I believe you can limit ownership to employees IF the corporate bylaws restrict ownership to employees of the corporation.

Payments from a 409A plan that are taxable to a participant could be wages, depending on plan definition. Salary deferrals (or other contributions) to a NQDC 409A plan would not be considered compensation unless the plan specifically allowed for their inclusion but that would be custom language, not a safe harbor definition, and could create testing issues because qualified allocations would be based on compensation higher than statutory/testing compensation. The salary deferral add-back does not include 409A NQDC deferrals. Also note that a person's 409A salary deferrals, could take them from HCE to NHCE.

Which territory? Possibly Puerto Rico or US Virgin Islands?

Ditto - but thought you were going in the other direction with your question, because we have a one person plan where the one person is the sole employee of the incorporated business but the business owner is not an employee. That plan is not an EZ filer and it is subject to PBGC coverage and premiums - an odd but interesting situation.

So this is general rate group testing of a non-elective employer contribution, and not ACP testing of a match? Either way, you have no basis to return HCE deferrals. If it's the former, you have to increase contributions for NHCEs to pass. If it's the latter, then correction is a refund of excess/failing HCE match.