Have a client paying two employees on 1099's for cleaning services in addition to their W-2 wages. The employer has a SIMPLE plan. The employees are participating in the SIMPLE plan for their w-2 wages. The work is different than their normal jobs but they use the facilities of the employer, and the cleaning is in the same office they work in during the day. My concern is that the work cleaning after hours should be included with regular wages and thus they should be able to defer on that money as well.

[Advert.]

The DOL is coming ... Pension plan audits are on the rise with a specific focus on the Term-Vested population and RMD. Contact the pros at PBI to learn more about our new Term-Vested Audit & Remediation Service.

We have a takeover DB plan for 2017. We're working on 2017 now. The client made a $220K contribution in September 2017, for 2016. $20K was needed for minimum funding purposes for 2016. The previous actuary prepared a Schedule SB detailing this contribution. While balancing the trust, we discover that the client contributed shares of stock to the plan -- not cash. Now what? I believe the client has a prohibited transaction that needs to be fixed (by selling the shares that were contributed in September 2017) and excise taxes to be paid for 2017 and 2018. Does the client still get a deduction for 2016? Does our actuary need to amend the 2016 SB? Any other issues that I'm missing?

My employer is supposed to make an end of year match of 1.5%. After not seeing it this month, I checked with payroll and they stated: "You won't see that until a later date. For 2017's match, you should see it in your account by March. You'll receive a notice ahead of time from *COMPANY NAME* advising of the exact date of the match and how much it will be." Our posted benefit notice says: Company Match *COMPANY NAME* will match up to 3% on the first 6% you contribute to the plan (on a pre-tax or Roth basis). The first 1.5% will be reflected on your bi-weekly paystub. The additional 1.5% is contributed for eligible employees* by the company following the close of the plan year. You are always 100% vested in any contributions you make, and any company match that is contributed on your behalf. *Regular salaried employees who are active as of December 31 of the plan year. However, I read that as the end of the 401k plan year is December 31... So I'm basically losing out on 3-4 months of interest for a benefit that I earned last year. Is this normal? Legal? Ethical?

A Safe Harbor Plan is amending eligibility from elapsed time to hours of service to trim out the part-timers. Anyone who has already met the elapsed time requirement must be permitted to enter the plan, but anyone who has not yet met the elapsed time requirement by the time the amendment goes into effect will be required to meet the 1000 hr/12 month rule. My understanding is that, unless the employee moves into a class of employees that is defined by the plan as excludible by definition, once you're in, you're in. As an employee who has met eligibility requirements under prior eligibility rules, you may continue to participate in the plan, and you are therefore eligible to continue receiving the Safe Harbor contribution. This is being questioned, and I can't find any information that confirms or denies my understanding.

Takeover plan excludes HCES from the safe harbor match as it has non-physician professionals who are high paid and the owner physician does not want to give them the match. One of them made just less than $120,000 in 2017 and so we started up the pay period SH match for 2018 and the owner is not happy about it. Of course the plan cannot be amended at this point for 2018. Looking ahead though, if the plan were amended for 2019 to exclude this class of employees from the SH match (instead of excluding HCEs), my concern would be testing. There would be an exclusion of, say, 4 HCEs including the owner and maybe one NHCE professional. How would ADP testing be done on this excluded/disaggregated part of the plan? The plan is not top-heavy at this time -- thankfully!

If a plan uses 3401(a) for the definition of Compensation, then that excludes the value of group term life insurance on the life of the employee, correct? The plan does not use the W-2 def of compensation, which would include it under 6052. The plan's definition does not exclude the value of fringe benefits.

[1] Can the owner of a company and all of his employees be considered a common law employee of the PEO organization which is then a leased employee of the company? [2] Can the company adopt its own retirement plan? If so, are there any issues with this? I assume it would depend on whether the PEO organization currently sponsors a retirement plan and the provisions of the agreement between that company and the PEO.