Leaderboard

Only if the plan covers anyone born in 1974 or earlier with sec. 3121(a) wages of more than $145,000 in 2023.

If you're referring to the requirement that most new 401(k) plans be EACAs starting in 2025, as added by SECURE 2.0 sec. 101, there is no exception for large plans. As I read it, for any plan year in 2025 or later, if any 401(k) or 403(b) plan does not contain EACA provisions, it fails to be a qualified CODA, unless it meets one of the exceptions in 414A(c). The only exceptions are for SIMPLEs, plans established before 12/29/2022, governmental and church plans, plans sponsored by businesses less than 3 years old, and plans sponsored by businesses which normally employ no more than 10 employees.

It's facts and circumstances. The IRS has informally said they are good with Prime +2% but if you can justify Moody Bond Rate as reasonable based on rates commercially available by banks in the Plan Sponsor area then that's might be OK. As far as I know there is no stated safe harbor interest rate but some rates are less likely to be challenged by IRS or DOL than others.

Isn't it up to the Employee to catch and then request from which plan they want the refund? It's not up to the Employer to fix, it's only the Employer's responsibility to distribute the requested excess amount when requested by the Employee.

We posted at the same time Bri... I would agree with 1/1/2022 if term date was 8/25/2021. Here is the language in our document. I would guess other documents are similar. This is one of those sections that you just have to commit to understand and memorize.... just my two cents. It comes up more than I want it to. Rehired Eligible Employee Who Had Satisfied Eligibility. An Eligible Employee who satisfies the Plan's eligibility conditions, but who incurs a Separation from Service prior to becoming a Participant, subject to any Break in Service rule, if applicable, under Section...., will become a Participant on the later of: (1) the Entry Date on which he/she would have entered the Plan had he/she not incurred a Separation from Service; or (2) his/her Re-Employment Commencement Date.

This seems like a lot more trouble than just having the plan issue the refund directly to the participant with the appropriate 1099-R.

I agree with ESOP Guy. She completed a YOS (1,000 hours were completed between 8/2020 and 8/2021). You can't require employment at the beginning or end of a computation period, although employment is needed to start the first computation period. But after the initial computation period, employment at the beginning of the period isn't required. She wasn't employed on the plan's entry date so she didn't enter. Prior service counts (no 1 year hold-out rule and the rule of parity wouldn't apply even if the plan included it). She is rehired in 8/2022, which is after the entry date that would have otherwise applied. Therefore, she enters on the rehire date.

What about the ones that were not filed timely? There is no correction program for a late 8955-SSA. To my knowledge, the IRS has not systematically sent out penalties on late 8955-SSAs before. If this is something they are going to start doing, we need a correction program.

How is that 80% paid to her, via a W2 with taxes withheld or a 1099 as a contractor? Since grant is paid directly to the administrator, it might be self-employment income to her in which case she may be able to do her own retirement plan on that income. Who "owns" the grant, the individual or the school? If she leaves does the grant go with her or does it pay her replacement? It seems like she owns the grant, otherwise why wouldn't it be paid to the school which then uses to fund that 80% portion of her salary? Need to know which rabbit hole we're going down first before we can get to a useful answer - and not just my questions or Peter's, all of them.

I believe the answer is yes. Distribution of excess deferrals under 401(a)(30) and 1.402(g)-1 is one of the listed acts in rev. proc. 2018-58.

This is a very difficult situation that does not lend itself to easy answers. Owning 51% of a subsidiary on its own is not enough to form a controlled group, but the various stock exclusion and other rules can easily change that outcome depending on how the other 49% is owned. Even if not a controlled group, the JV could be covered under the hospital's benefits but would form multiple-employer plans (both retirement and welfare). Medical JVs in my experience are often affiliated service groups, which combines the employers for retirement and some other Code purposes, but not all welfare purposes, so you could have a single-employer retirement plan and a MEWA for medical benefits. Watch out if the hospital is self-insured; running a self-insured MEWA can be a crime depending on the state. If the other 49% owners also have separate medical practices, those could be ASGs as well, expanding the affiliated group to those practices. The hospital is probably tax-exempt, whereas the JV probably is not, so you may need different plan types depending on whether the hospital's plans are only permitted for tax-exempt organizations.

I think it's one of those things where, the year is deemed complete at the end of the 12 months, as long as the hours were hit. The 12 month period has elapsed, the 1000 hours were met. The document language will govern, of course, but I think that's usually how they're phrased.

Is the grantor a § 501(c)(3) charitable organization? Is the grantor a supporting organization of the school? Is the grantor a part of the same § 414(c) employer as the school? For example, the school and the grantor (if both are charities) might be one employer if there is enough overlap between their governing boards. Or, the school and the grantor might be one employer if they coordinate their activities and permissively aggregate. 26 C.F.R. § 1.414(c)-5 https://www.ecfr.gov/current/title-26/section-1.414(c)-5. If the grantor is not a part of the same employer as the school, is the grantor nonetheless a participating employer under the school’s § 403(b) plan? What are the plan’s governing documents’ provisions?