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Posted

I have recently connected to a new financial advisor (sinigle member RIA).  This advisor actually has 2 businesses... lets call them Store-Front Advisors (SFA) and Store-Front Investments (SFI).  I was just told right now that SFA sponsors a Simple.  I already knew SFI sponsored the 401(k).  Since the advisor owns both businesses that means it's a control group.   My question is... is it possible for this advisor to fund the Simple through SFA and fund the 401(k) through SFI for the same year?  If there was only one business I wouild advise that it is not possible to fund both plans.  But there are 2 separate businesses (owned by the same person).  

If so I assume we combine both plan contributions to ensure 415 limits are not exceeded.

Thanks for any insight.

Posted

Probably not. Was one of the businesses the result of a recent transaction that would fall under 410(b)(6)(C)?

If not, and if they are a controlled group or affiliated service group, then you don’t combine for 415. Instead, all the SIMPLE contributions are all treated as excess IRA contributions for the years in which both plans are in effect.

Posted

ummmm.. I thought to be eligible to sponsor a SIMPLE it had to be the exclusive plan of the employer.  That means the controlled group employer can only have a SIMPLE and no other qualified plan.  Am I missing something?  So, they can't contribute to both in the same year... the contributions to the SIMPLE should have stopped when the 401(k) was adopted by the other controlled group member.  Covered under EPCRS VCP.

Just my thoughts so DO NOT take my ramblings as advice.

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