Message Boards Digest

February 13, 2018

Here are the most recently added topics on the BenefitsLink Message Boards:

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TPA2015 created a topic in 401(k) Plans

Allocate 401(k) Safe Harbor Match Among Participating Controlled Group Members?

Company A and Company B form a controlled group. Company A sponsors a safe harbor match 401(k) Plan, which Company B has adopted as a participating employer. One employee receives compensation from both entities, but all of the deferrals have been made through Company A. For purposes of calculating the safe harbor match, should I aggregate the compensation from both companies? For deduction purposes, should the safe harbor match contribution for this person be divided pro rata based on compensation, or should the entire deduction be taken by Company A, since the deferrals were made by the employee from his Company A compensation?
Number of replies posted  2 replies      Number of times viewed  37 views      Add Reply

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Mr Bagwell created a topic in 401(k) Plans

Roth Buy-Back to Restore Forfeitures; What is Roth 'Start Year'?

An employee deferred Roth to a 401k. He also had pre-tax monies. Terminated employment and rolled Roth dollars to a Roth IRA. Rolled pretax dollars to IRA. $15k in forfeitures at time of distributions. Employee wants to restore his account to get the forfeitures back. What are your thoughts on Roth buy-back? Specifically, the Roth start year. I see how one can't roll a Roth IRA to a 401k. But we aren't talking about a rolling back. The Roth start year starts over when Roth from 401k goes to Roth IRA, which probably is why one can't roll Roth IRA to 401k. How would you handle the Roth start year situation?
Number of replies posted  1 reply      Number of times viewed  30 views      Add Reply
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lcollins300 created a topic in 401(k) Plans

Must Include LLC Partner Taking Draw from Plan Sponsor (No W-2 Comp) When Doing ADP Testing?

We have a 401(k) plan sponsored by a Limited Partnership (Hotel) where one of the 5%+ owners is a working manager taking draws but no W-2 wages. Would she be included in ADP testing? Her daughter also works for the hotel but does receive W-2 wages (she owns 2.5%). Definition of compensation in the plan document is W-2 compensation (no exclusions).
Number of replies posted  10 replies      Number of times viewed  76 views      Add Reply
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AKconsult created a topic in SEP, SARSEP and SIMPLE Plans

SEP and 401(k) 'Maintained' in Same Year

There seems to be a consensus, based on various Q&As on this forum, that an employer cannot maintain a 5305-SEP and a 401k in the same year. I'm not sure I agree. I see on the IRS website that an employer may not use a Form 5305-SEP if it maintains any other qualified plan, where "maintained" status occurs even when no contributions are made, but if an employer terminated the SEP as of 2/28/18 and then started up a 401(k) plan on 3/1/18, wouldn't that be OK? In such a case, the employer is not "maintaining" both plans. Yes, it would have had both plans in 2018, but they weren't maintained at the same time.
Number of replies posted  2 replies      Number of times viewed  40 views      Add Reply
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Madison71 created a topic in 401(k) Plans

Correcting an Impermissible Mid-Year Change to a Safe Harbor Plan

Last year, Plan Sponsor amended their document mid-year to change from a safe harbor non-elective to a safe harbor match. A new notice was issued and safe harbor matching contributions have been made ever since. Previously, the plan provided for a discretionary match as well. I understand that this was an impermissible change mid-year re-Notice 2016-16 and needs to be corrected. How to fix? I'm also struggling on handling of the match, because participants likely signed up once changed to the safe harbor match in expectation that they would receive 4%.
Number of replies posted  8 replies      Number of times viewed  60 views      Add Reply
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khidalgo created a topic in 401(k) Plans

Excise Tax Deductibility on Federal and Calif. Returns

I paid excise tax for an LLC (Form 5330) relating to employee benefit plans and just wondering if this is a deductible expense for the federal and CA state income tax returns.
Number of replies posted  0 replies      Number of times viewed  15 views      Add Reply
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Belgarath created a topic in 403(b) Plans, Accounts or Annuities

HCE Status Affected by Post-Severance Compensation?

403(b) plan for a 501(c)(3) organization. An HCE terminates on, say, 12/31/2015. Receives a last paycheck in early January of 2016. A deferral is withheld from that final paycheck in 2016. Plan has a last-day requirement for match, so no match received on that 2016 deferral. When testing for coverage/nondiscrimination, is he counted as a HCE for 2016? Or because he formally terminated employment on 12/31/2015, is he not considered an HCE for 2016?
Number of replies posted  0 replies      Number of times viewed  17 views      Add Reply
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Derry Ex created a topic in Qualified Domestic Relations Orders (QDROs)

QDRO Assistance Please

My ex-husband and I were divorced 3 years ago. I completed the QDRO paperwork, paid for the processing and received a response back from the administrator stating there were no funds in his account. Any suggestions on what or how to proceed collecting from my Ex the funds that were in the decree? FYI, my attorney took another job and doesn't return my calls so I'm really in limbo at this point.
Number of replies posted  5 replies      Number of times viewed  40 views      Add Reply, Inc.
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