katdmin

Luke, it is crazy! I used to have several large restaurant chains at a prior TPA I worked at (it could be one where they wear tight orange shorts) and I don't recall this coming up. But I think maybe because those employees never met the YOS eligibility or they just didn't want to defer. I appreciate everybody's responses.

Thank you! I tried to search, but I don't know if I am technologically challenged or what, ok I admit it, I am , but I couldn't find anything.

Thank you! The welfare benefits were brought up in a call last week. They said those that are on their health/dental actually receive an invoice and pay the employer outside of their checks. Our ERISA attorney told them that would not work with 401(k) deductions. One thing they mentioned was that they take the tips the employee receives (he didn't specify cash or credit card tips) and pay them out at the end of the shift on a debit card (after they've tipped out the support staff (bussers, etc).

We have a restaurant client that is having an issue with their tipped employees that are deferring into their plan. I have had large restaurant chain clients in the past and this was never a problem, so I am trying to see if anyone has run into this and if so, how did you handle? If their tips are paid in cash, some of the employees, after taxes and deductions have $0 paychecks, so there is nothing to take the deferral from. They discussed requiring the employees to give the cash back to the employer to make the deposits, but is that the best solution? Another thought was to exclude tips but then I am not sure they would pass 414(s). Any thoughts, guidance is appreciated.

Hello, I am working on a profit sharing plan with partners paid on K-1s. They are both Canadian citizens. The CPA stated that because of that, they aren't subject to self employment income tax. Normally I would take line 14a and do all the required calculations/deductions. But if they aren't subject to taxation, do I simply use line 14a for my calcs and testing? Someone in my firm indicated that, but it seems a little too easy Thanks! Kat

I believe the difference between the two approaches is the timing of the deposits. If you have pay period allocation, the deposits are considered late if they are not made by the end of the quarter following the quarter allocated. But if the document states year-end/annual, then you have until the company's tax return deadline to fund. And as you said, you can "pre-fund" and then true-up at the end.

I have become the admin on a high school 403(b) plan and I don't work on that many 403(b)s. In conversations, they have indicated that they are letting people defer once they reach 1,000 hours. I explained the universal availability rule and so they put in the exclusion of Employees who normally work less than 20 hours a week. My thinking is they can't possibly have everyone fall under this exclusion. I thought they could exclude only if they expected them to work 20 hours a week or less. What if they know they are hired as full time, can they use this exclusion and then once they reach 1,000 hours, let them in. My company is so terrified to tell the client that they can't do something, so they try to come up with these clever ways to get around the rules. They have a discretionary match and I told them they can have the 1,000 hours requirement on that source but not the deferrals. Any input is greatly appreciated. Thanks!

Thanks Lou. I had another one a few weeks ago and I mentioned that there weren't any deferrals and he went back to the CPA and had it corrected. I just didn't want to sound dumb if there was another way or something I wasn't aware of!

Hello, I am working on a new plan for 2020 that has 4 employees, husband and wife and 2 NHCEs. I received the census and there were no deferrals in Box 12 and Boxes 1, 3 and 5 are the same (telling me that no deferrals were deducted). Roth is not permitted in the plan. When I received the brokerage statements, I noticed a large deposits and when I questioned the employer, he said that was $19,500 for both he and his wife. I am going to call the CPA and discuss with him. I think I remember something about that even if it's not on the W-2, they can report it on their 1040 and still deduct it? I want to make sure before I tell the CPA that they have to file corrected W-2s. Thanks!

Bird, I don't even want to go there (screaming). I just started at this new company 2 months ago. My husband is tired of me sighing constantly (everytime I find something wrong). I truly think the people here just haven't been trained properly. Everytime I find something, I research it to death thinking I've been doing it wrong all along (almost 20 years in admin!). I was told when I started and kept finding document errors "The documents may not be correct. We can't go back to the client and tell them it's wrong or they'll get mad."

thanks, you guys are the best! I had a feeling it was not correct, but of course i couldn't find the exact wording i needed to have that conversation with the client.

Thanks Bill! Well, the doc says this: 3.1.3 Allocation of Earnings Gains and Losses. As of each Valuation Date, the net income of the Trust Fund recognized since the prior Valuation Date will be allocated among Participant Accounts in a nondiscriminatory manner according to policies established by the Trustee. Net income is the interest, dividends, net gains or losses from the sale of investments, and unrealized appreciation (depreciation) in Trust Fund assets, less investment expenses of the Trust Fund. The portion of a Participant's Account held in a Controlled Account shall not participate in the allocation of earnings of this Section, but instead shall be credited with the actual earnings of such Controlled Account. In the event that the Participant's Accounts (or portion thereof) are invested in assets that are valued on a daily basis, his Account balance shall reflect the daily activity of such assets and the method of allocating earnings described in this paragraph shall not apply. Then it also says this, which makes me think this is my answer because "Participants Accounts" would include terminated until they take a distribution: 2.1.4 Termination of Participation. An Eligible Employee who becomes a Participant shall remain a Participant until his entire vested and non-forfeitable Account balance is distributed to him, or his Beneficiary, in the event of his death. The only reason why I hesitate is because of the wording "in a nondiscriminatory manner according to policies established by the Trustee" thinking they could have a policy that states they won't allocate to terms but to me that would be discriminatory.

I recently took over the admin of a pooled profit sharing only plan. And as it seems with every plan I start to work on, there's an issue. It looks like once a participant terminates, they stop sharing in the gain/loss. For an example, there's a term whose balance hasn't changed since the PYE 6/30/2014. I looked through the doc (it's the lovely Datair IDP) and I couldn't find any language confirming either right or wrong. If the plan sponsor is consistent, is it ok to NOT allocate earnings to terms with balances? Thanks!

Thanks so much! This is definitely not my expertise!

Hello, a colleague asked me a question and I just don't know the answer. Client wants to purchase real estate in the plan but they don't have enough of a cash balance in their account. They are asking if they can take out a bank loan to purchase the RE (apparently, he wants to use current property in the plan as collateral to borrow the money.). We both don't believe it's possible (PT?) - the plan would be basically taking out a loan? Thank you!