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Towanda created a topic in Correction of Plan Defects
We're taking on a new client that adopted an individually designed plan in 2009. It has not been updated since then. Further, the existing document is questionable; it has no determination letter. The client isn't interested in going through VCP because of the cost of the new fee structure and the fee we need to charge to make the corrections. At the very least, I believe we should go through all of the steps one would go through if the the document were being submitted through VCP, and then leave it up to the client to decide whether to submit it. What's our culpability if the client fails to submit? What have others done in this situation?
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401(k)athryn created a topic in 401(k) Plans
Five companies have adopted a plan. There are three owners. Company A & B are owned 100% by owner [1] He also owns 33% of company C. Company A and C have negative self-employment earnings on the K-1. Company B is positive income. When combined, the net income is negative. Can he defer from the positive compensation earned through Company B? I think the other way to ask is, do I consider the compensation from Companies A & C to be ZERO or do I actually use the negative number when determining 415 compensation?
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Denise created a topic in Form 5500
We need guidance to determine if we need to provide more information than we have in the past and determine how to identify experience rated groups per the definition by the DOL.
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Towanda created a topic in 401(k) Plans
An owner-participant who has W-2 income defers $18,000 in 2017. He wants to max his contributions for the year. Is it permissible to recharacterize $6,000 of the $18,000 as catch-up so the owner-employee can receive $60,000 in the aggregate, or is he limited to $54,000 because he failed to make an additional $6,000 in catch-up? I have read Code section 414(v) and I don't see anything that discusses recharacterization except in the event of ADP test failure. I don't see anything that says a portion of the deferrals can be recharacterized as a catch-up so that one can get more profit sharing.
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pjb1835 created a topic in 401(k) Plans
An Employer was spun from an Open MEP midway through 2017. Through 2016, the Employer filed its own audited 5500 every year, but I am seeing that the 5500 Instructions don't seem allow separate filings by each participating employer. Does anyone know why the Employer was advised to file a separate 5500 with its own audit? The only reason I can find for their having done so is this AICPA guideline: https://www.aicpa.org/content/dam/aicpa/interestareas/employeebenefitplanauditquality/resources/ebpaqcprimers/downloadabledocuments/ebpaqc-multiple-employer-plans-primer.pdf Also, if assets were physically under the MEP the first part of the year, wouldn't there be a need for a final "short" year of assets under the MEP and a short plan year for the standalone plan? Would it matter if the startup document was effective 1/1/17?
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TPApril created a topic in 401(k) Plans
Company was changing recordkeepers for 401k plan. They got locked out of the outgoing custodian and the new one could not get everything set up on time, so the company missed timely deposits for one month. The company has been advised as to the late amount that will show up on their Form 5500, and the deposit due for the lost earnings (less than $100). The company is resisting, because it says it's not at fault. How to handle?
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Rainethe created a topic in 457 Plans
So there's a nonprofit that has an individual who has worked there for eight years (and founded the nonprofit). Over the years this individual took no money but there was an oral agreement with the board that she was owed a deferred salary of $20K per year, which will be paid the year after the individual's departure (at a rate of no less than $20K per year). This individual is about to depart and now wants this promise in writing. Obviously, because this is a nonprofit and it involves deferred compensation, it should be 457 plan. Would it be a top hat plan (covering only a member of a select group of management employees)? Would it be 457(b) or 457(f)?
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MarZDoates created a topic in 401(k) Plans
If plan excludes bonuses from the definition of compensation for matching allocations, isn't it correct that ADP and ACP testing can still be done using total gross comp?
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