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We are no longer a service provider to the plan and unable to assist you with the information you are requesting as we have no access to that data and no contractual agreement with that Plan or Sponsor. Please contact the ERISA Plan Administrator and/or Plan Trustee. Our last records which we have previously provided to you indicate they are X and Y. The last known address and phone in our records is _______ and _________. We wish you luck in enforcing the right of the participants with the legally responsible parties but are unable to offer any further assistance. Just repeat that ever time they call.

Since this has already been the subject of the pre-nup, hasn't the subject been broached already? Perhaps he might want to wait to bring it up again until after Valentine's Day... 😁

This is a pet peeve of mine, you can't "fail" the top heavy determination (aka top heavy test). You are just top heavy or not top heavy. In this case you're top heavy. Not a failure. The actual rule is that in a top heavy DC plan, each participant who is a non-key employee must receive an employer allocation equal to at least 3% of their compensation, or a percentage equal to the highest percentage allocated to any key employee if it is less than 3%. This allocation may impose a last day rule, meaning employees who are terminated before the end of the plan year do not need to receive the top heavy minimum. The rule was modified by SECURE 2.0 so that employees with less than 1 year of service or who have not attained age 21 do not need to receive the top heavy minimum contribution. This is effective starting for 2024 plan years. Since your plan is profit sharing only with a pro rata allocation, you shouldn't normally have any issues with the top heavy minimum, as each non-key employee would receive the same percentage of employer contributions as each key employee. However a couple of things to watch out for: If the plan excludes any compensation for allocation purposes (for example, pre-entry compensation), that definition of compensation may not be used for the top heavy minimum allocation, even if it is a 414(s) safe harbor definition. The plan must use full year (415) compensation. If the profit sharing allocation has a service condition, for example, the employee must complete 1000 hours of service in the current year to be eligible for a contribution, then an additional top heavy minimum might be needed for participants who were active on the last day but did not complete the 1000 hours. Employees who are not participants (have not met the plan's eligibility requirements) do not need to receive a contribution.

I'll take a slightly different approach. DOL can't force you to work on a plan you are no longer engaged to work on. DOL can ask you questions about a prior client and the work you did for them (I'm assuming there is no attorney-client privilege here). It sounds like they are trying to gather as much information as possible to be able to assist the participants in some way. I would meet with them and be as helpful as possible without agreeing to do any additional work. It also wont hurt to contact your friendly neighborhood ERISA attorney.

Back in 2021 we terminated our service to a Plan because (1) they were not paying our bills, and (2) they were not responding to our call, emails and letters. Apparently, in 2022 this client did something improper with participant accounts, and they also issue erroneous W-2 Forms for 2021 and 2022. Back in 2024 the DoL contacted us on behalf of several participants who were not properly paid benefits due. We sent the DoL our complete file on the last year (2021) that we serviced the Plan. We even included a copy of our service agreement with this client that in addition to services we provided, it also defined that provision of data was the client's responsibility. It further went on to define our role as not being a fiduciary since we are not the Sponsor, Administrator, Trustee, Custodian, etc... Our role was specifically defined to be purely ministerial in that we reconciled operations based upon data submitted. It was also stated that we have no authority on any issue of the Plan. After much discussion it was agreed that we are not responsible for items like W-2 Forms! Fast forward to the present, the DoL is contacting us again since they think we can do something about the Plan's operation. Again, after detailed discussion it was agreed that our role does not process the client's payroll (like duh). It was also stated that the only reason the DoL is calling us is because no one else will answer their phone calls! We, on the other hand, answer our phones. The agent assigned to the case actually stated that she agrees that we are not the party they should be calling! But they are calling us because WE ANSWER THE PHONE. Now they want to do a conference call to discuss how WE MIGHT BE ABLE TO CORRECT THE ERRORS THAT OCCURRED AFTER OUR SERVICE ENDED! The fact that we don't have any responsibility (per the agent), and we have no access to any data, are being ignored! Has anyone else been in a situation like this? Any words of wisdom are greatly appreciate. Unfortunately, they insisted I do a conference call with the agent and her supervisor tomorrow, even though as agreed to by the agent, we have no responsibility or even ability to address problem related to operations after our service ended. If there some "bill of rights" related to situations like this?

An IRA is a non-probate asset that does not generally get settled through a will. The IRA designation forms and agreement will determine the beneficiary. If there is no designated beneficiary, then you look to the IRA agreement to determine the beneficiary. Each IRA custodian has its own agreement and each will have their own provision to determine who inherits the IRA when there is no beneficiary named on the form, when there is no form at all, or when the form is defective. Sometimes it will be clean and simple with the spouse as the default beneficiary, then the children, if there is no surviving spouse. But, here, based what the bank is saying, your IRA agreement may provide that upon the death of the account owner with no designated beneficiary, the proceeds will default to the estate of the account owner. You should confirm that this is correct by asking the IRA custodian for a copy of the IRA agreement and for them to point you to the portion of the IRA agreement that provides the default beneficiary language (or as fmsinc states, see "what does your Order of Precedence say"), In these instances, we have seen where IRA custodians will not permit an estate to assign or transfer the IRA out of the estate to a properly titled inherited IRA for estate beneficiaries, although the IRS permits it, and will instead require that the entire IRA balance be paid to the estate. Regrettably, unless the IRA agreement states otherwise, this appears to be within the IRA custodian's powers. If this is done, it will be a taxable distribution(s) that cannot be undone. (Also, depending on the size of the estate there may be estate taxes.) If the beneficiary is the estate, the balance would be required to be paid out to the estate within 5 years.

First of all the plans I'm using cover a handful of people so no recordkeeper. Secondly the brokerage account platform we are using requires a Trustee/Rabbi Trust. I definitely have plans where we have skipped the rabbi trust and just used a corporate account but some execs want the extra protection.

What is notable about this situation is the relative informal approach the DOL is taking. It seems as if they are going out of their way to avoid opening an investigation of the plan. Here is a well-done article the provides an in-depth description of what can be involved in an investigation: https://www.groom.com/wp-content/uploads/2022/12/Guide-to-Dealing-with-Department-of-Labor-Investigations-of-Retirement-Plans.pdf Regarding the circumstances in this posting, the guide clearly states on the first page: "The DOL does not have the authority to compel the plan or any service provider to create materials or analyze issues on the DOL’s behalf." The guide also notes that: "The DOL has broad authority under the statute to: Require the submission of reports, books, and records of the plan. Enter places to inspect books and records. Question persons deemed necessary to determine the facts relative to an investigation." Given this authority, it begs the question in this case why, after all other attempts to contact the plan fiduciaries, hasn't the DOL sent an agent to the plan sponsor's (or any other fiduciary's) last known physical address? They DOL loves to harp about finding missing participants. They may wish, in this case, to try to find a plan sponsor that is MIA,

About an employment-based retirement plan, a reader of the plan’s governing documents might discern whether the plan provides a surviving spouse 100% of a death benefit or, if the plan provides a qualified preretirement survivor annuity, whether the participant may limit the QPSA to a 50% QPSA. If a surviving spouse’s benefit is only a 50% QPSA, a beneficiary designation might be effective for the other half of the death benefit. A participant might want information to consider choices about whether and how to seek one’s spouse’s consent.

In responding to EBSA inquiries, a recordkeeper or third-party administrator wants to be clear, yet tactful. If, after a good explanation, an examiner persists (inaptly), consider: “I’d really prefer not to need to call your supervisor, but . . . .” But don’t do that if you guess the supervisor might be behind the repeated inquiry. If other efforts fail, lawyer-up. Clients of lawyers I referred have told me that EBSA’s conduct got much better after a lawyer was on the scene. Sometimes, a lawyer’s mere mention that she represents the TPA ended all inquiries. While not budging from reminding an inquirer about what a nonfiduciary service provider must not do, it sometimes helps to show a little empathy. A tiny handful of EBSA people are fighting a vast scourge of thefts and abandonments. This is not advice to anyone.

Read the freaking document

IRS Reg specifically states that a pre-nup does not affect the selection of beneficiary. I think it is: Reg. 1.401(a)-20, Q&A28. Very likely, the plan already answers the original question.

https://ferenczylaw.com/the-triple-stack-match-its-not-just-for-pancakes-anymore-autumn-2015/

I don't have a link, but I'm sure there's a bunch of stuff out there. This is a boutique type of calculation, I would consult with your TPA or bundled service provider..

My response to the question How important is it to apply a cutoff during a year? is it is very important, but not mandatory. Anytime excess deferrals are taken by payroll, it is a violation of 401(a)(30) and an operational failure. If the excess deferrals are not removed by April 15th of the following year, the plan could be subject to disqualification (unlikely to happen) but the correction must go through EPCRS (which is not cheap). Note that a 401(a)(30) failure is a payroll failure that differs from a 402(g) violation which is a participant failure (e.g., where the participant had deferrals made while working for unrelated companies). From what I have seen, 401(a)(30) failures are more likely to occur when there was a change in payroll systems/providers. Another relatively common 401(a)(30) failure occurs when there are other related companies such as within a controlled group where payroll was not run on a common payroll system/provider and a participant had deferrals taken from multiple payrolls that did not share YTD information. Technically, all excess deferrals should be corrected through refunds which would address the distribution of earnings on the excess deferrals. If the refunds are not made by April 15th, the excess deferrals are corrected through EPCRS (SCP, VCP or Audit Cap) and are taxable in the year of deferral (except for Roth deferrals) and in the year of distribution (including the amount of any Roth deferrals). According to the IRS web site (https://www.irs.gov/retirement-plans/401k-plan-fix-it-guide-elective-deferrals-werent-limited-to-the-amounts-under-irc-section-402g-for-the-calendar-year-and-excesses-werent-distributed) the refund could be subject to the 10% early distribution penalty, 20% withholding and spousal consent rules.

Peter, as one who does not get involved in that level of administration, I'll give you my opinion from a top-level viewpoint FWIW. "Must" the payroll function cut off deferrals when limits are reached? No. "Should" the payroll function have the ability to recognize the highest applicable limit available to a participant and only stop deferrals once that limit is reached? Yes, in a perfect world, and certainly yes for any payroll service company that claims to be full service. For those companies that use third party software to run their own payroll in-house, such software may lack the ability or the users lack the programming skills to properly account for all the new complexities associated with recent legislation. In those instances I think they should make every effort to properly administer limits and try to at least account for most situations. Yes, it is easy enough to identify and correct excess deferrals after year-end through corrective distributions (I am not a proponent of playing with W2s after the fact). Besides the added administrative work, the other ramification could be under withholding on income taxes for an affected individual who gets a material taxable refund. The employer would need to make sure recipients were able to make timely tax withholding elections on their refunds to avoid be under withheld. If I'm the employee, I might consider this a big hassle and ask why should I have this inconvenience because my employer or its payroll provider can't properly administer legal limits? Furthermore, if I'm expecting my deferrals to be stopped at a certain point and they aren't, I'm not getting a part of my pay that I was expecting. Yes, I could then elect to cease deferrals, but then I have to elect to restart come 1/1, putting the administrative burden on me the employee. Anyway, that is my humble opinion.