What are the top heavy rules? In general, a defined contribution plan (i.e. 401(k), profit sharing, money purchase, etc.) is considered to be top heavy when more than 60% of plan assets are attributable to "key employees" as of the "determination date". Top heavy plans are subject to certain minimum contribution and vesting requirements. Who
Plan Compensation – Not So Simple! At face value, it seems like "compensation" would be one of the simplest issues to deal with in a retirement plan, but it is actually one of the most complex. Understanding what compensation is "plan eligible" is one of the biggest headaches for plan sponsors and an area in
IRS Provides Welcome Relief for Plan Sponsors! Mistakes happen! It is inevitable because the rules governing retirement plans are complex and always changing. The IRS Employee Plans Correction Resolution System (EPCRS) has done wonders in allowing plan sponsors to correct mistakes, often without seeking approval from the IRS, and avoid costly sanctions and fines. On
What fees and expenses can be paid for by a plan? In general, fees and expenses associated with the on-going administration of a retirement plan may be paid from plan assets provided they are necessary and reasonable. Certain expenses known as "settlor" expenses, however, cannot be paid for from plan assets. What is considered reasonable?
Deposit Rules for 401(k) Plans One of the most common mistakes made by 401(k) plan sponsors is failure to deposit participant contributions (i.e. 401(k) deferrals/Roth contributions) and loan payments in a timely manner. Having said that, it is worthwhile reviewing the rules and consequences of making late deposits. What are the rules? In general, the
On August 24, 2016 the IRS released Rev. Proc. 2016-47 providing a new “self-correction” program for taxpayers who miss the 60-day window for rolling over a distribution from an IRA or qualified retirement plan. Prior to this guidance, a taxpayer who was unable to complete a rollover within the required time frame could only qualify