pjb1835

Well owner just didn't realize when he hired employees it affected his plans compliance.

Sorry. Solo k doc is a pre-approved doc where plan only covers owners or partners. Employer has employees, 2 of whom met age 21, 1 year of service, 6 months in 2018. Looking for a way around vcp.

Discovered Solo K excluding nonowners had statutory employees during 2018. We are now past October 15th 11(g) amendment deadline. Does latest EPCRS Rev Proc regarding self correcting retroactive discretionary amendments help us without having to go through VCP?

I guess Im asking what is the definition of a subsidiary that is described in GCM 39824 that allows severance? Would a stock sale of a co in controlled group related due to common owners be considered a subsidiary spinoff?

One of 2 brother/sister companies covered under one 401k was purchased. Buyer already has a plan and doesn't wish to merge or transfer and only wants one plan post acquisition. Does entire brother/sister plan have to be terminated before acquisition to avoid the successor plan rule issues? Should they separate into 2 plans and then terminate the soon to be acquired company's 401k before acquisition?

Ok, I think I understand. So, as long as an employer says they set aside an amount for a tax year, it doesn't really matter that it was physically deposited into an account during that year. That would mean there is no deadline agree? They can say $15,000 was set aside October 2018 but even if never deposited into an account, it doesn't matter. What matters is when the amount was FICa taxed...

What is the deadline for a nonprofit organization to make an employer match or nonelective contribution to a 457(b) plan for a plan year?

So, i can amend to add designated roth accounts for one day to allow for the rollover and then amend it out (all in one amendment)?

Can a 401(k) plan allow for Roth rollover contributions but not Roth elective deferrals? If not, why not?

Does anyone have any experience with Open MEPs? Employer was spun from a Open MEP mid way through 2017. Through 2016, the Employer filed their audited 5500 every year. Instructions do not seem to allow for the separate filing per participating employer. The only thing we can come up with is the AICPA guideline below. Does anyone know why they would advise separate 5500's per employer with separate audits? Secondly, if assets were physically under the MEP the first part of the year wouldn't there be a need for a final "short" year of assets under the MEP and short start up plan year for the stand alone plan? Would it matter if the start up document was effective 1/1/17? CPA is confused as to how to audit 2017 when the assets were under the MEP. If the common interest criteria is not met (as is usually the case with open MEPs and many MEWAs), each adopting employer is considered to be maintaining a separate plan for the benefit of its own employees. Consequently, each adopting employer would have a Form 5500 filing requirement and potentially an audit requirement (depending on the number of plan participants). However, there is a special exception for a MEWA that qualifies as a group insurance arrangement (GIA). A GIA exists if the MEWA’s welfare benefits are fully insured, the insurance contracts are held by a trust or other entity, and a trust is used as the conduit for payment of the premiums to the insurance company. If a MEWA that meets these requirements files one Form 5500 with audited financial statements as a GIA, then the adopting employers do not need to file Form 5500. https://www.aicpa.org/content/dam/aicpa/interestareas/employeebenefitplanauditquality/resources/ebpaqcprimers/downloadabledocuments/ebpaqc-multiple-employer-plans-primer.pdf

Belgarath and Tom, Do you believe there is some risk upon an audit based on the IRS publication? If so would the IRS have a leg to stand on? What could they say to correct...allocate something to the rest of the plan's eligibles and if so, how much? Could it snowball into multiple year corrections?

Thanks Tom!

I'm sure this topic has been beaten to death here, but this is an extreme case to ask how much flexibility do plan sponsors have with individual class based. Profit sharing only plan has the provision that each participant is in their own class for allocations. Plan has immediate eligibility. There are no compensation exclusions and no annual hours or last day condition. The plan is not top heavy. Client identifies the following who gets an allocations: . Owner employee (single HCE) maxes out . Owner identifies lowest paid individuals only statutory group and allocates just enough % of them to pass a4 including average benefits and gateway - yes, kind of like a bottom up qnec. Gateway is only given to these individuals. . A couple of those lower paid individuals were excluded because they didn't work at least 1,500 hours and employed on last day. If individual class based has this much flexibility, why does any plan's profit sharing provision have an age/service, annual condition, compensation exclusions and employee class exclusions? All you need is for the employer to fill out a formula questionnaire each year to instruct the plan administrator who gets an allocation and how much.

Thanks, would it matter if the plan was a balanced forward plan operating on an accrual basis? are we to back out receivables?

Formula for determining earnings on refunds is earnings * excess/(Beginning balance plus contributions for the plan year). What does contributions for the plan year mean? Does it have to recognize all contributions including receivables? If not, why not?

Client wishes to terminate their prevailing wage only plan and allow immediate distributions to everyone (roll, cash, etc.) but amend their 401(k) to permit prevailing wage contributions going forward. Any problems with this?

Participant had an accident and out on unpaid medical leave. He wants a 5 year loan. Plan doesn't allow hardships and employer is only willing to allow payroll loan repayments. Can he take out a loan now with no repayments until returning (before a year) and then have the loan "reamortized?" In other words, do you have to already have a loan in place before you can take advantage of loan repayment forgiveness for leave of absences?

I know this may sound ignorant, but we'd like to import financial activity into admin software on a cash basis for top heavy, refunds, RMD's, 5500's, etc, but still want to run coverage and nondiscrimination tests only on census and calculated annual additions. How do the various softwares handle cash basis accounting?

Kevin C. Just to clarify, if the plan in question also removed a class exclusion with the amendment, would an employee previously in the excluded class with more than a year also have the 100% protected vesting? This wouldn't be covered under the 1.410(a)-3(e)(1) concern, correct?

Ok, I can see the 1.410(a)-3(e)(1) argument. Thanks

This is the language in the code. Correct me if I'm wrong, but it is different than the regulations requiring 100% vesting if made to wait longer than the 1 year statutory. 100% required vesting applies to participants who have accrued benefits after 2 YOS AND have been made to wait 2 years. "In the case of any plan which provides that after not more than 2 years of service each participant has a right to 100 percent of his accrued benefit under the plan which is nonforfeitable (within the meaning of section 411) at the time such benefit accrues, clause (ii) of subparagraph (A) shall be applied by substituting “2 years of service” for “1 year of service”."

This is from the Erisa outline book (to avoid complexities of elections, etc.): A third approach would be to apply the amendment to the vesting schedule only to employees who become participants after the adoption of the amendment, and keep all current participants on the old schedule. That approach also eliminates the need for vesting elections and avoids the bifurcation issue, but it also means that the plan administrator would have to maintain two vesting schedules. There is no exception to this even if the eligibility provisions were liberalized. I'm not seeing the concern even if it is clever.

For a cross tested profit sharing safe harbor non-elective 3% plan, how are imputed EBAR's calculated? Are we adding a calculated EBAR for the safe harbor and a separate imputed EBAR for the profit sharing?