We have a 403b plan that has 2 individual annuity contracts that were grandfathered from an older arrangement. The current plan does not offer the annuities as an investment, but the company has been handling the remittance of their contributions.
The plan is converting to another rk so we want to stop this manual process. Are there any formal notification requirements other than telling the 2 participants we won't be remitting the contributions on their behalf anymore? I can't seem to find anything on this type of situation and would love to hear people's thoughts.
If a plan document states employees can contribute up to 100% of salary and doesn't specify capping HCE's, but HR typically limits HCE contributions to 8% each year due to testing issues, are there any formal notification requirements for this limit? For example, does a notice need to be sent 30 days before plan year end, etc? I can't find any info on this but it seems like notification would be fair in order to allow HCEs to plan accordingly.
Please tell me if this is reasonable. A certain (well-known ) recordkeeper has told a client that based on their history of not failing ADP/ACP testing, the testing, which they pay an extra fee for, cannot be scheduled for completion within the first 2 1/2 months of the plan year end. If they do end up needing refunds, the Plan will be responsible for the risk and responsibilities of any failure.
Am I wrong for thinking this is totally unacceptable?
Exactly...the person is 63 and included a percentage that would get her to the desired catchup for the first time, but our vendor requires a separate catchup election form be completed. Because she didn't complete it, she was capped at $18k. Seems illogical to me.
This is a case of someone who is already participating adjusting their deferrals to allow for catchup contributions; according to our plan document we only allow deferral changes to be made on the quarterly enrollment dates. I think step one is we need to revise our procedures so participants are more clear on the process. Thank you for your response.
Our plan has quarterly enrollments. A participant wanted to begin catch-ups with the quarterly enrollment. She adjusted her deferral to accommodate for the amount, but due to some miscommunication did not realize she had to also fill out a separate form to elect that she wanted to sign up for catchups.
I feel that we can self correct this and begin her catch ups now since it only a single situation and caught right away, rather than wait until the next enrollment period in January. Is my thinking correct?
We've been capping HCE's at 8% to avoid testing failures and refunds. A participant has been deferring 5% all year but now wants to maximize her contribution for the rest of the year. We have quarterly changes so she can increase her deferral to 8% on 10/1, and is over 50 so will also elect catch up contributions as well.
My question is how can we help her have the maximum withholding possible? Is there a way to set up her catch up contribution to take advantage of the full $6,000 between now and year end? Any ideas would be appreciated.
Sorry, i should have been more clear with my question. This is what's on the IRS webstite: April 30, 2017, is the extended deadline for any defined contribution pre-approved plan adopted on or after January 1, 2016, other than a plan that is adopted as a modification and restatement of a defined contribution pre-approved plan that had been maintained by the employer prior to January 1, 2016. This extension is to facilitate a plan sponsor’s ability to convert an existing individually designed plan into a current defined contribution pre-approved plan. See Notice 2016-3.
Hence my confusion..
Thanks for your reply. I'm specifically wondering about IRS Announcement 2014-16 that says this extension is to facilitate a plan sponsor's ability to convert an existing individually designed plan into a current defined contribution pre-approved plan.
Say an individually designed plan document was last restated effective January 1, 2011. They are supposed to restate every 5 years, which would have been January 1, 2016, but if they haven't they still have the option to move to a pre-approved document as long as they do it by April 30, 2017 - is that correct?
A company has a board resolution saying a plan will be merged as of April 1st, with contributions into the plan ceasing before that, at the prior year end.
If administratively the actual conversion of assets cannot happen until April 30th, is that an issue? Does a new resolution need to be enacted?
A university has several small plans they are merging into their main plan. The recordkeeper that is receiving the funds says the accounts can be merged in as a rollover. We argue that records should come over as in a normal conversion (i.e., ee and er money broken out by source). Thoughts?