Does anybody have a good grasp how tax reform may affect our industry? I'd be interested in your thoughts on whether your typical TPA is a "Professional Services Firm." It would be nice to take advantage of the 20% deduction on pass-through income :)

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What software do you use that you wouldn't give up unless they pried your cold, dead fingers from the keyboard? Mine: ClipMate (for Windows). Records every copied item, so I can copy (contol-C) multiple text items in sequence and then go back to fetch any one or more of them (for purposes of pasting into a new text document, for example). The standard Windows clipboard (control-C) only holds one copied item at a time, and overwrites any earlier-copied item. I can even paste the earlier-copied items one by one into an ordered list in a new text document, by hitting control-V repeatedly.

I don't understand how a non-profit could be subject to prevailing wage laws, but it has something to do with their clients working on federal projects under some "put people to work" program. Anyone see any reason why this would be a problem for a 403(b) plan?

Excerpted from DOL Reg. 2520.104-50 (Short plan yeas, deferral of accountant's examination and report.):

(b) Deferral of accountant's report. A plan administrator is not required to include the report of an independent qualified public accountant in the annual report for the first of two consecutive plan years, one of which is a short plan year, provided that the following conditions are satisfied: (1) The annual report for the first of the two consecutive plan years shall include: (i) Financial statements and accompanying schedules prepared in conformity with the requirements of section 103(b) of the Act and regulations promulgated thereunder;

Excerpt from section 103(b) of the Act:

(b) Financial statement. An annual report under this section shall include a financial statement containing the following information: * * * (2) With respect to an employee pension benefit plan: a statement of assets and liabilities, and a statement of changes in net assets available for plan benefits which shall include details of revenues and expenses and other changes aggregated by general source and application. In the notes to financial statements, disclosures concerning the following items shall be considered by the accountant: a description of the plan including any significant changes in the plan made during the period and the impact of such changes on benefits; the funding policy (including policy with respect to prior service cost), and any changes in such policies during the year; a description of any significant changes in plan benefits made during the period; a description of material lease commitments, other commitments, and contingent liabilities; a description of agreements and transactions with persons known to be parties in interest; a general description of priorities upon termination of the plan; information concerning whether or not a tax ruling or determination letter has been obtained; and any other matters necessary to fully and fairly present the financial statements of such pension plan.

So, in the first of the 2 years you need to include full financial statements? I have never done this. My 5500 software has never provided a validation error. But my filings done based on this rule have never been rejected. What's been your experience?

The 2007 415 regs state the 415 dollar limit after age 65 is the lesser of the age 62-65 dollar limit increased by the lesser of the statutory factors or the ratio of the (benefit at the annuity starting date)/(benefit at age 65) * 62-65 dollar limit. The "benefit" used is to be exclusive of post-65 accruals. Suppose someone enters the plan at 65. Then this second ratio at any annuity starting date will be 0/0. If this ratio is 1, there is no adjustment to the dollar limit post-age 65 because 1 is less than the statutory increase. If it is infinite (dividing by zero), we use the statutory (5% & applicable qx) increase because it is clearly the lesser. Alternatively, is the reg just poorly written, because all the reg examples have the participant having an accrual at 65; so just use the lesser of the plan's ae and the statutory basis which is what seems to make sense and what everyone has espoused for years? Note the 10 year reduction would of course apply through age 74 and I am not considering here forms other than a straight life annuity.

Client uses ftwilliam document; it has "New Comparability -- One Group per Participant" selected as the Allocation Method. The are only three participants: owner, owner's daughter and job-cost estimator, all earning roughly $100, this year. Estimator quit after year-end. Owner wants to skew contributions in favor of himself and daughter, if possible. He's also considering no contribution. My research indicates that I could at least limit the estimator to 70% of what owner and daughter (owner by attribution) get -- say 17.5% of pay vs. 25% of pay. But I get the sinking feeling that I have to look at the "reasonable business classification" portion of the Average Benefit Test to do so. So, is Owner/Non-Owner a reasonable business classification? All I find are "great debates" from ASPPA and limited examples in the regs.

Reviewing a takeover plan, and found what seems to me to be a bizarre (and inapplicable) provision. This is a PRIVATE college -- non-governmental in every way. The adoption agreement defines, for faculty only, compensation as including "Employee contributions described in Code Section 414(h)(2) that are treated as Employer contributions." This wasn't a mistakenly checked "box" but was specifically drafted into the compensation definition. As I read 414(h)(2), I don't see how it can possibly be applicable in this situation. Am I missing something?

My husband retired in 2013 as an HCE and rolled his 401k into his IRA. He's now 70-1/2. He took an RMD in 2017. He received a letter in December 2016 notifying him that the plan failed the ADP test for 2013, and that they needed to give him a distribution of the excess, but, because he retired and rolled his 401k into IRA, it says he needs to take a distribution from his IRA. A 2013 corrected 1099R was issued to him by the plan administrator in January 2017. We didn't amend our tax return for 2013 (missed the deadline). In 2016 we withdrew some from IRA and paid tax on it as Normal Distribution. In January 2017 he withdrew the correction amount from the IRA plus he took his RMD for the year. The 2017 1099R from Vanguard shows both as "normal" distributions. But should the correction amount have been coded as "P" on the 2017 1099R? Should this portion of our IRA distribution be broken out as "Other Income" rather than included with "Normal" IRA distribution?

A surviving spouse has submitting a beneficiary distribution request but the plan has a beneficiary designation on file (from 2011) on which the same spouse signed and notarized a waiver to allow their grandchildren to be named as the beneficiaries. Can we provide the spouse with a copy of that form, so he can see how he consented to waive his rights as a surviving spouse?

I'm using Relius. Eligible participant terms with 256 hours during plan year. She does NOT show up in my 401(a)(4) testing, however she shows up in the Average Benefit Testing. Should that be? I thought termination with < 500 hours meant you're excluded from all general testing.