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Contact John Hancock for a source correction. It's not that complicated and they might even be able to do it as of the deposit date so the earnings work out right. Talk to your account rep, they can probably walk you through it.

I have encountered similar issues before. My position has been that the employer mandate obligations for the buyer (with respect to Z's full-time employees in this example) trigger only as of first of the month following the close. That's not clear in the rules, but nothing else seems viable/reasonable. B can't offer coverage for the full month when the employee onboards mid-month. I therefore treat the first partial month of employment with the buyer in the same manner as a new hire. In other words, you get a limited non-assessment period (2D in Line 16). As for the seller, I treat this in the same manner as where an employee terminates mid-month. So the seller (A in this example) gets to use Code 2B in Line 16 to avoid any potential ACA employer mandate penalty liability for the 1H in line 14. IRS Form 1094-C and 1095-C Instructions: https://www.irs.gov/instructions/i109495c 2B. Employee not a full-time employee. Enter code 2B if the employee is not a full-time employee for the month and did not enroll in minimum essential coverage, if offered for the month. Enter code 2B also if the employee is a full-time employee for the month and whose offer of coverage (or coverage if the employee was enrolled) ended before the last day of the month solely because the employee terminated employment during the month (so that the offer of coverage or coverage would have continued if the employee had not terminated employment during the month). ... Limited Non-Assessment Period. ... First calendar month of employment. If the employee’s first day of employment is a day other than the first day of the calendar month, then the employee’s first calendar month of employment is a Limited Non-Assessment Period.

I look at it as, you're not failing coverage, but rather you're failing nondiscrimination (or, at least, there's still work to be done), if you have less than 70% benefiting with a non-uniform formula but over 70% getting "at least something".

This may have already been shared - but I didn't see if offhand, so thought I would pass it along. Exclusion from electronic filing requirement for Form 5330 is available now | Internal Revenue Service (irs.gov) The IRS has decided paper filing is okay, just document that the reason for the paper filing is lack of authorized vendors. " Treas. Reg. 54.6011-3(a) requires a taxpayer to file Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, electronically for taxable years ending on or after December 31, 2023, if the filer is required to file at least 10 returns of any type during the calendar year that the Form 5330 is due. Treas. Reg. 54.6011-3 (b) and Instructions for Form 5330 also provide, on an annual basis, exclusions from electronic filing requirements in cases of undue hardship. Form 5330 can be filed electronically using the IRS Modernized e-File (MeF) System through an IRS authorized Form 5330 e-file provider. Currently, IRS has only one authorized e-filing provider for the Form 5330. As a result of the lack of authorized e-file providers for the Form 5330, the IRS has determined that a filer is permitted to file a paper Form 5330 for the 2024 taxable year. The filer should document that the reason for not filing electronically and filing a paper Form 5330 is the lack of authorized vendors."

https://www.irs.gov/retirement-plans/simple-ira-plan-fix-it-guide-your-business-sponsors-another-qualified-plan I believe you are correct unless you want to try to go through VCP for the SIMPLE IRA since it's the SIMPLE-IRA that has problems if you also maintain a qualified retirement plan in the same year. There might be some threads here on benefits link if you do a search, I think this has come up a few times in threads.

Hi Everyone, I have an update for you. I spoke to the Office of Regulations and Interpretations of the DOL. They model notice has the Paperwork Reduction Act because this information needs to be seen by the Plan Sponsor/ the Employer. However it does not need to be in place for the participants. The employer can remove if they choose.

The OP says "If you defer something other that 2,4,6...then match is 100% of deferrals." If literally true, that would mean if you defer 3% or 5% you get 100%. Is that true? If so, then I think you would have an issue of the match rate increasing when going from 3% to 4% (100% to 150%).

There is a larger issue here. When creating ANY plan, the sponsor (and by extension, anyone who thinks/acts as a consultant) should ask him/herself if there is ANY need for an Early Retirement definition. If you don't understand my point, note that E.R. came into vogue many decades ago when there was a need to "clear out" the workforce to make room for the post-WW2 workers (the parents of the baby boomers and then the baby boomers themselves). If there is no similar demographic "bubble", there is likely very little need for any set E.R. provision. Alternatively, an E.R. definition should (probably) include a significant minimum service requirement (e.g., 20+ years). (Yes, this could vary by industry and/or geographic location.) Do not fall into the habit of including E.R. provisions just because "it's always been that way".

I don't see a BRF issue unless there is some benefit, right or feature that is available to HCEs but not to NHCEs. Getting rid of the ERA for everyone shouldn't be a problem. There might be a 411(d)(6) issue but again, what is actually being removed if you eliminate the ERA in the DC plan? Not the availability of distributions, since you can still have that at age 59½. Not full vesting, since the definition of ERA already requires 6 years of vesting service. Is there something else that is granted by the attainment of ERA in the DC plan that could be a cutback if eliminated? Read the document to see, but I can't think of what that might be.

I would just eliminate the ERA in the DC plan. What is it even doing there? Since you can already have distributions at age 59½ without needing an early retirement feature, you should be able to remove it without it actually being a cutback. No need to add an ERA in the DB plan. Your testing age will still be NRA. I don't think I've ever seen a DB plan with an ERA that is combo-tested with a DC plan. I believe that in that case, you would need to test the MVAR at every early retirement age to see if it is more valuable. So my recommendation is, don't do it.

I agree that it could be done, but I would recommend against it. A better approach is to exclude all HCEs from the safe harbor, and rely on the plan's individual-groups allocation formula for nonelective employer contributions to make an allocation to some or all HCEs, if desired. This is a little bit more complicated (but only a little bit) and it gives the employer much greater flexibility.

If the document says that HCEs get the safe harbor then HCEs have to get the safe harbor. If they want to change that, it will need a plan amendment. Whether you can do that mid-year for the current year or whether it will have to wait to take effect until the next plan year is circumstance-specific. Did the safe harbor notice say that the employer may reduce or eliminate the contribution mid-year? Is the employer operating at an economic loss? Regardless, you can't eliminate benefits that have already been accrued. The anti-cutback rules protect both HCEs and non-HCEs alike.

No. Wife cannot roll the funds to her own IRA, because she is not a "spouse" beneficiary No. She must use her husband's life expectancy. No. She is not a designated beneficiary. She must continue distributions over her husband's life expectancy . And, she must fully distribute the inherited IRA no later than 10-years after her husband's death.

If it is only one participant and he is over 59.5, then yes getting any kind of evidence that the first ROTH contribution was 5 or more years ago should be sufficient to process as a qualified ROTH distribution and you can breath a huge sigh of relief. And old W-2 should ROTH 401(k) or a statement such as Paul suggests should do the trick. If you have other participants with ROTH, you have bigger issues with determining the ROTH basis and first year of ROTH contribution for all similarly situated participants I'd suggest a retainer billed in advance if you have to do a massive project to reconstruct that because the prior TPA/Custodian/record keeper, either didn't track it or didn't transmit it and the Plan Sponsor who is also probably the Plan Administrator seems negligent in it's duties with respect to service provides some how.

The conversion data had to have included a separate accounting for the Roth contributions (or you have to deal with an even bigger problem.) Ask the client for any plan reports from 4 or 5 plan years ago that show a participant's account balance by source (e.g., individual statements, registers, trial balances, vested balances...) If a Roth account existed as of the beginning of the 4 year ago, then it is reasonable to assume that Roth deferrals were made before then to create a balance in the account and it has been at least 5 years since the start of the plan year in which the first Roth contribution was made. Applying this method to the plan years since then will allow the plan to determine year in which the first Roth contribution was made. Yes, we can come up with some combination of circumstances where this is not perfect, but those circumstances likely will be very rare.

It's a sticky situation.

How about a 20-pound vat of glue for your portion?

Request copies of his W-2 from 5 and 6 years ago?

There's a lot that could come into play in trying to do this. It's been many moons since I've actually handled a situation like this so, the rules may have changed. I will just add, a lot depends on whether it's an ERISA 403(b) and the language of the contracts with the other custodians/recordkeepers. Some of these insurance contracts may allow the Plan Sponsor the ability to move the assets on behalf of the participant, but if they are individual annuity contracts, you may need the participant to sign off approving the transfer of their assets. I'd also suggest confirming if there are any early surrender charges or market value adjustments that would be charged to the plan participant. If the contract is greater than 10 years old, they have likely met the requirements to be able to transfer the account without penalty. I have also seen the insurance company try to "push" back and find a reason that the contract cannot be cancelled to move the accounts. I've had to engage ERISA council in the past and get ALL ORIGINAL signed contracts/documents. Hopefully, an easier process now exists and you don't have to jump through these hoops with the client.

I wonder if divying up the horse when time comes for a distribution is where the term "quarter horse" comes from.

And not that it matters for the answer, C's position is likely that it did not want any of the compliance liability for B's portion of A's plan that would have followed any direct transfer or merger. However, B employees now in C's plan can rollover their A plan distributions to C's plan if so desired.

And as we often say is this forum, just because you CAN do something doesn't mean you SHOULD.

401(a)(26) is good assuming prior structure was compliant. If no one benefits in 2024 then no 410(b) or 401(a)(4) concerns. If the plan was "soft" frozen (just participation) then you would need to include this person in your testing population as (s)he would not be a statutory exclusion.

How is it that basic plan records from only 5 years ago have not been retained in any fashion by either the client or TPA (or a third-party RK)? Isn't that gross negligence?

The 5500-EZ is included in the DFVC filing. The DFVC steps for an EZ are, for example: To complete the filing: • Form 5500-EZ - prepared, and signed and dated. • Put the Form 14704 - Transmittal Schedule - Form 5500-EZ on top of the Form5500-EZ. • Attach a check for fees payable to the "United States Treasury". The forms and check should be mailed by first class mail to: Internal Revenue Service 1973 Rulon White Blvd. Ogden, UT 84201 The instructions have a slightly different if the filing is sent by a delivery service. It actually is a very simple process.

If an ERISA-governed plan’s trustee even considers holding the shares of the limited-liability company that owns a horse, pays the expenses of keeping the horse, and collects prizes and fees of the horse’s work: The plan’s administrator might warn the participant that incremental expenses the plan would not have incurred but for the nonqualifying asset—for example, premiums for extra fidelity-bond insurance or fees for an independent qualified public accountant’s audits, and lawyers’ fees (see next paragraph) are charged to the individual account of the participant who directs investment in the nonqualifying asset. The participant must engage her lawyer at her personal expense. And at least for the initial sets of transactions—forming the company and its LLC operating agreement, the company’s purchase of the horse, and the plan trustee’s purchase of its member interest in the LLC, the participant’s individual account is charged the fees and expenses of the plan’s trustee’s and administrator’s lawyers. (Other individuals should not bear expenses made necessary because of one participant’s directed investment.) Likewise, the plan trustee’s extra fees and expenses for reading the LLC’s financial statements and otherwise monitoring the plan’s investment are charged to the directing participant’s individual account. The plan’s administrator might require that the participant’s account always hold enough daily-redeemable investments so the administrator perpetually can pay all incremental plan-administration expenses without invading any other account. In my experience, a person who thinks about using her retirement plan account to buy an unusual investment considers that way because she lacks money. But many of those also lack an account balance that’s enough to both buy the nonqualifying asset and reserve for the plan’s incremental expenses. This is not advice to anyone.

How is it going to be valued as of valuation date as it needs to be done so by an independent appraiser? 100% value has to be covered by a fidelity bond which is very expensive. This is an unqualified plan asset. What is going to happen when the plan is closed as the participant cannot own it? What are you going to do, roll over part of the horse into an IRA? How about the earnings from any kind races, stud fees, if at all, going to be allocated to the plan? Just a few thoughts on dealing with intangible assets. this is even tougher as it is partial. Do get an attorney for this, so many booboos can happen.

not only recordkeeping fees but assets valuation fees as well, the value has to be reported on Form 5500, right? In addition, the same type of investment has to be offered to other participants to avoid potential BRF issues. Let me throw another wrinkle while we are at it - how are you planning on rolling over the horse into the IRA in case the plan MUST be terminated? I would not touch it either; it has "ain't worth the trouble" 40 feet high neon sign on it.

I don't believe it is impermissible under the Internal Revenue Code, at least I've never found anything that says you can't, but it might be prohibited by the Plan's Trust documents, Investment Policy and/or the Plan Trustee who oversees the investments. If it is allowed by the Plan document and the Trustee will allow it, they you do have all the pitfalls you mentioned and possibly several more which can be quite easy to run a foul of and while I'm not an accountant I think you might lose some of the advantages allowed in the code, like depreciation of the asset which oddly I think applies to race horses for tax purposes. It is not something I'd be interesting in touching, even if it was technically allowed, but you might find someone out there who would, though it might come with additional record keeping fees.

As long as Company C is not in the A/B controlled group before buying the stock of Company B, and no assets/liabilities/sponsorship are transferred to Companies B or C at or after closing, employees of Company B will have a severance from employment for Company A 401(k) distribution purposes once Company B leaves the A/B controlled group (the pre-closing "employer") and joins the new C/B controlled group (the post-closing "employer"). I think 1.401(k)-1(d)(6)(ii) is on point.

it is EZ even if one of the spouses did not have any ownership