Nic Pospiech

Thanks for the discussion. I think the client is just going to make the $1.31 deposit and report the failure on the 2024 5500. It will just be removed on the 2025 5500 (the first one that my company is preparing). We of course did not provide any specific advise to client. We just provided some options they could take.

The Plan Administrator never made up the earnings, they dispute that this was their responsibility as the TPA just simply forgot to do an ACH pull for the funding. They just didn't review the 2023 5500 well enough and questioned why the late payment was showing up on the 2024 5500 draft. So...what they want to do is amend the 2023 filing to remove the late deposit, as they believe it shouldn't have been there in the first place. I was more just wondering about whether it should have been reported at all. I would have said it should not have been, but I find that I am not always correct, so I wanted to see what other folks would have done when completing this 2023 5500.

I have a client whose previous TPA reported a late deposit on their 2023 Form 5500. The deposit was for a payroll dated 1/4/2023. The client provided the detail to the TPA on 1/11/2023 - the funds were not actually deposited until 1/17/2023. The TPA - when preparing the Form 5500 reported this as a late deposit. Should they have? I know it is past the Small plan Safe Harbor 7 business day rule. But the rule I thought needed be followed about "late deposits you would place on a 5500" is the "soon as administratively feasible, but no later than the 15th business day of the next month". Now...I know if there was an audit the IRS is going to only consider the "soon as administratively feasible" part of this. But...should this have been reported as a late deposit on Form 5500 (question 10a). The missed earnings was $1.31. Just want to make sure i am understanding the reporting requirements correctly. I would have said no.

We have a two member LLC husband, wife. She does not share in the profits. We keep getting different answers on what they can as members contribute to the company 401K. Best I can come up with is the wife would be limited to her guaranteed payments and her elective deferral and the husband would have his elective deferrals and limited by his compensation which is should be the profit. So for him it would be up to 76500. Any assistance with this would be appreciated. Thanks!

Yes...that is it. Thanks all! We don't deal with a ton of After Tax plans....so I knew that this was to simple...but just wasn't thinking the process through.

I have a client who is the owner of a business - who also provides consulting service as a separate company to said business. He is owner of both businesses. Business number 1 is set up as a Safe Harbor Non-Elective plan with 10 employees. The client wants to contribute his max deferral (comp $350k) of $23,500.00 plus receive his 3% NE SH of $ 10,500.00. So for business 1 - he would have contributed (or received from the company a total of $34,000.00. In business 2 - the client is the only employee - he wants to set up an After Tax contribution in the amount of $36,000.00 so he can max his total contributions at $70,000.00 for the year. He also earns a separate $350k in this business. So...After Tax contributions are tested in the ACP test of business 2 - but since the plans do not have to be aggregated for ACP Testing - what is to stop him from doing this? It seems like he could just skip providing any Employer Contributions to business 1 (outside of the SH NE 3%) without failing any testing. What am I failing to see? Thanks!

So, I finally have some more details...I think. The plan in question does the following: Makes deposits of a certain amount per employee per payroll (Employer Money) Employees can Invest the funds and withdraw for Medical Expenses. If the Employer is a Library - do they need to file a 5500? What if it was a regular employer? I think the plan was originally set up as a VEBA HRA upon inception - but with the company that established this...I really can't be sure. any help would be appreciated. Thanks!

It is a brand new plan. No existing anything. I was thinking we could probably set it up the way he wanted, but ADP was indicating he couldn't use this Safe Harbor Formula...so I just wanted to make sure I was correct, Thanks!

I have a client who wants to do a Safe Harbor plan with the following formula: For each 1% contributed, the Employer will contribute 2% (maximum 5%) So - if a participant contributes 5% - they would receive a 10% match (2 for 1) the max comp for Safe harbor is 6% - the max allowed in the plan is 5% Does this mean that this is a valid Safe Harbor Match Formula? or would i have to separate this between SH Match and Discretionary Match? Thanks!

I wish I knew about the VEBA - the company that set it up doesn't exist anymore. So I don't know exactly what they did. The company that sponsors the HRA funds each participant as they go.

My company is being asked to take over an HRA (section 105) plan. The plan has never filed a form 5500. I am assuming they should be. Secondly, if there are over 120 participants - would they need an audit? I again am assuming yes. I would be thankful for any assistance on this. Thanks!

Haha. Yeah...all the answers I came up with. We can definitely accounting trick the last year. But I think they are a little SOL on the rest. Thanks!

I am taking over a plan that was previously a Solo K. The plan was making deposits after their tax deadline with extensions for a few years. For example. They would fund their 2022 contribution after their tax deadline with extensions - but, not actually extend their taxes. They were provided bad advice by the previous administrator that they had until 9/15 - of any given year to make the previous years contribution. I am not exactly sure how to fix this or what the ramifications might be - as it is all owners money - Solo K. Any thoughts?

I have a client who has a 401(k) in a PEP plan. They want to leave the PEP and transfer their existing employee balances to their new 401(k). Can they do this without triggering a distributable event? In short...they just want to escape the PEP and have their own standalone plan without allowing their employees to withdraw their existing funds. I was assuming they can...but wanted some thoughts on this. Thanks!

Does anyone utilize the Schwab Savings Bank asset and also produce their own quarterly statements using the Statements provided in Report Writer? We currently are trying to add this as an option, but are running into issues as I am not great at Crystal reports. Just looking for some advice from someone who is doing this. Thanks!

This may seem like a dumb question, but I am just wanting to make sure I understand something. I have a Safe Harbor Non Elective plan (3%) who is not going to provide any Profit Sharing or Match this year, just the 3% contribution. Will this plan automatically pass 401(a)(4) testing?

Probably a bit late to the party. But this would definitely be something my firm could help with. Nic Journey Retirement Plan Services 616-558-9491

I am fairly inexperienced when it comes to Control Groups. I have a company (A) who has been bought by a bigger company (B). The bigger company is Belgium owned company who has two subsidiaries here in Michigan. Company A currently offers a Safe Harbor Non Elective 3% contribution as well as an additional match of up to 4% of compensation dependant on the employees contribution rate. They have 10 Employees. Company B currently offers a Safe Harbor Non Elective 3% contribution with no additional ER contributions. They have 80 Employees. I am under the understanding that I will need to test these plans together. 1. Are the plans allowed to offer different ER contributions or do they need to be the same. 2. Will these plans pass testing when combined? I am assuming as long as 70% of the employees are covered the answer is yes. What am I missing? Thank you! nic