It's been proposed that a participant loan be granted, with payroll deduction repayments, but with a twist. Let's say loan is granted on January 15. But the (equal) payroll deduction repayments are not scheduled to begin until March 15. The repayment schedule would be 4 years (well under the 5 year limit). To me, this violates the "substantially level payments made at least quarterly" requirement of 72(p)(2)(C). During quarter 1 of the loan, the repayment is far less than during subsequent quarters. Agree?

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Review considerations for structuring a 401(k) plan. Topics include salary deferral limits and catch-up contributions, matching and profit-sharing contributions, nondiscrimination testing and safe harbors.

If an employee filled out a form to go from 5% to 2% but payroll misses it for 3 payroll periods, how to fix?

When someone is rehired, they have immediate entry upon reemployment if any portion of their employer contribution account had become vested. I know pre-tax and Roth contributions are considered an employer contribution account for this purpose, and that a rollover account would not be. What about voluntary after-tax employee contributions? Or participation in the employer's other qualified plan (the employer's defined benefit plan)?

Our client is the sponsor of a 401(k) plan. The client is now 100% owned by an ESOP. Code Section 318 states that the constructive stock ownership rules don't apply to shares owned by a section 401(a) tax-qualified retirement plan's trust. Here, the ESOP is the owner of the company, so it seems that the 401(k) plan no longer has any owners for purposes of the HCE and key employee definitions. Further, all shares of the company previously owned by family members of the owners now are owned by the ESOP, so those shares wouldn't be attributed to the former owners. The 401(k) plan is subject to ADP testing but perhaps that will be a non-issue if no attribution exists. I also have to question whether any officers exist for top heavy testing purposes (even though the plan is a long way from being top heavy). Comments, anyone?

A client wants to terminate a phantom stock plan. No shares have vested. The value of shares is minimal. There would be no distributions on termination, therefore no acceleration on distributions. Are we subject to the rules on terminations under 409A? In other words, can we only terminate if one of the three tests in 409A is met? Does it matter if there is no acceleration on distributions here because no distributions would be made?

We administer a traditional defined benefit plan that is offset by each particular participant's vested balance in a profit sharing plan. Our understanding is that the 415 limit applies to the gross benefit and not the net benefit under the floor offset plan. This doesn't seem right, but apparently an IRS examination guide indicates that the 'current approach is that the limit applies to the gross benefit (i.e. prior to offset).' I remember there was a discussion between an actuary and Jim Holland a few years back on this issue, in which Rev. Rul. 76-259 was cited. cited in the discussion. The actuary made some good points as to why the 415 limit should apply to the net benefit. In my client's case, the pre-approved document makes no reference to the 415 dollar limit applying to the benefit prior to offset. Comments?

I worked for a company from Sept. 2010 to Feb. 2013. I had a chronic illness. I haven't worked full-time since then. Social Security determined that I had become totally and permanently disabled as of July 2014. I received my ESOP distribution late in 2014. I was only 20% vested when I separated from service, but should I have become 100% vested upon the date of my disability? I managed to get the plan documents but they are not clear.

Client started a DB plan in 2016. They bought a stock that increased 4,000% so now the plan is way overfunded. Benefits will never catch up. I'm thinking of suggesting they take out the money and intentionally disqualify the plan. They can go ahead and pay at the capital gains tax rate. The taxes and penalties on the disallowed deductions would be better than a reversion tax on an overfunded DB. Agree?