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Is the impaired wife merely unable to execute a spousal consent on the beneficiary designation, or is she so cognitively impaired that she doesn't understand what she is being asked to consent to? I think it might be better for the family to go to court and ask for the appointment of a guardian for the wife. The guardian will be invested with the power to make a decision about whether it is in the wife's best interest to consent to a change in the beneficiary. Even if the Plan Documents permit the use of a power of attorney as suggested by Peter, keep in mind that Plan Administrators have a fiduciary duty toward the participant and the beneficiary and you don't want to be seen as promoting or facilitating the interests of one over the other. I would be very careful. What will happen to the wife when dad dies and the daughter is now the beneficiary? Will the daughter take care of mom? If so, then why not appoint the daughter as the guardian of the person and of the property of the wife?

By definition, it’s not an excess if it’s simply more than the minimum they were required to provide. What limit did it exceed?

How does the accountant not know that? Isn't that their job to know? (Sorry, been a tough day. Just venting)

The plan most likely was a pre-approved plan and should have been restated by now for Cycle 3. (It is possible, but very unlikely, that the plan was an individually designed plan that was structured with an Adoption Agreement and a Basic Plan Document.) The instructions for a Form 5500-EZ say to answer the compliance questions "enter the date of the most recent favorable Opinion Letter issued by the IRS and the Opinion Letter serial number listed on the letter". Hopefully the plan was restated and all is good. If the plan was not restated, then inform the client of the issue (they need an updated document). If the client asks you to provide the document, be sure to charge the client for all of your services.

I'm taking over a solo 401(k) Plan that has exceeded the $250k in assets and therefore need to file the Form 5500. It used an Adoption Agreement, but what I was provided was dated back in 2018. I'm just confirming, even these types of plans had to be restated prior to July 31, 2022 correct? With the need to provide the date/serial number for the restatement on the Form 5500, I wanted to make sure.

Section IRC § 401(k)(14)(C)(w)(t)(f), provides that you will be removed from you home at night and placed on an airplane that will take you to a prison in El Salvador without due process where you will be incarcerated for the rest of your life. So your best course of action to protect yourself is to interrogate the prospective lying SOS in the customary way before permitting the hardship distribution. https://www.meisterdrucke.uk/kunstwerke/1260px/English%20School%20-%20Cuthbert%20Simpson%20also%20Symson%20Simson%20or%20Symion%20tortured%20on%20th%20-%20%28MeisterDrucke-673723%29.jpg

Assume a plan calculates the employer match on a plan year basis, but the employer funds per-pay period with a year-end true-up. Could the plan be amended to provide that, if an employee hits the 401(a)(17) limit before the end of the year, the true-up amount for the employee will be funded at that time, rather than waiting until year-end? I'm wondering if the timing of the true-up is potentially a BRF issue, given that it would be virtually all HCEs who would get the contribution early (and get the opportunity for additional earnings). Of course, there's always the potential for additional losses as well. As always, I appreciate the collective wisdom of the group.

A plan provision like @EBP notes a provision would work if the true-up is run for everyone at the same time. If the current plan provision specifies that the true up is done at or after year end, then it would require an amendment to permit it to be calculated earlier. The problem comes in with calculating the true up early only when a participant reaches the comp limit. Here are some issues: As @BTG and @Artie M note is the early true up likely it will be discriminatory. The true up would need to be calculated after each payroll in which a participant reached the limit. A procedure would have to be in place to address the situation where a participant reaches the limit in a pay period, but a subsequent payroll adjustment would drop the participant's year-to-date comp below the limit. The plan should not have any allocation conditions that would have precluded a participant from getting a true up come plan year end (such as a last-day rule or an minimum hours requirement.) This is the type of plan "enhancement" that leads to operational errors, and at some point in time in the future, successor people in HR, payroll and at the TPA are asking who decided that this was a good idea?

It would be interesting for you to enter the numbers into this app I wrote a coupla decades ago, and see if it agrees that 80% + $1 is the optimal integration level: https://benefitslink.com/site/inte-greater/

Please respond, I am very curious to know if there is a consensus on how the DOL's new program will be used!

Hi Bill, if the intent was to keep your former spouse eligible for FEHB then the award should have been $1/mo in both your retiree annuity as well as a $1/mo FSSA (former spouse survivor annuity). I prepare those orders all the time and honestly, it's worth keeping intact just in case.

I think there could be a BRF issue. A right or feature is essentially a catchall that the IRS can apply to any feature that is different for one group of participants than another. The IRS excludes from rights or features any feature that has no meaningful value to participants. That seems to imply that if there is meaningful value to a right or feature to a participant that c/would be a right or feature that needs to be tested. Here, an early contribution arguably has value because someone would get investment returns for a longer period than someone who got the later contribution. I mean that is why most participants who load up deferrals early (even if there is no match) do so. Though you point to losses, the IRS will have the issue with the potential for earnings. Different groups having different investments is definitely subject to BRF testing. Doesn't seem like a stretch that allowing different groups to invest amounts earlier than another could also be problematic. I also note that EBP's document makes no reference to one group versus another. That document simply recalculates for all participants, no matter how much the participant makes--there is nothing in it that refers to two different groups. Under EBP's document there is a true up for everyone who qualifies for one at the time the employer makes the recalculation. The proposed change differentiates between two groups of participants so that at a point of recalculation some participant who might otherwise qualify for a true up will not get one (until a later date of recalculation). As you state, it seems especially problematic because depending on the HCE definition and demographics it will in all likelihood favor HCEs.

These are all excellent questions that every plan should think about when adopting self-certification because the plan documents, plan administrative procedures and service provider agreements all may have conflicting legacy language. Under self-certification, the participant gets in trouble for lying or for not following the rules - unless for plan administrator happens to have knowledge that the hardship is not valid. The plan administrator is not expected to monitor each hardship. Self-certification is not limited to the SH reasons, but best practice would be for all hardship reasons and parameters applicable to a facts & circumstances conditions to be in writing and readily available to a participant. It also seems that best practice would be to limit the number of hardships that can be taken within a fixed time period, and any request exceeding limit would a review by a plan representative or service provider includes the review in the service agreement.

Are you drafting the plan and asking if you can meet the service recipient's desires regarding that timing or has the plan already been executed and it is silent on this issue (now the service recipient wants to "credit" the amounts on 6/1)? Also, when you use the word "credited" do you mean accrued in their notional account on the books/ledger? All the posters above are correct that this is a contractual issue and the application of 409A is complicated. Having said that, here are my ramblings. Regarding the language used in your specimen document, I agree it seems that it is using short-term deferral type of language. To me this is an overly conservative use of that language as that timing only comes in with distributions and not with accruals. The specimen document must either provide or the quoted provision assumes that the service provider has a legally binding right to the match on 12/31/yr1. If that is the case though, it doesn't seem like it should matter when the accrual is actually being made because legally speaking the amount that should be accrued would be set as of 12/31/yr1. That is, even if the service recipient waits until 3/15/yr2 to accrue and the service provider terminates on 2/1/yr2 (assuming no other vesting provision), the service provider still would need to be credited with the amount of the match as of 12/31/yr1. Ultimately, it seems like it wouldn't matter when it is actually credited on the books as long as the service provider can calculate the amount owed to the service provider when a distribution is due. The problem with delaying would be that the calculation of earnings is more difficult (unless there is a fixed earnings rate). Of course, the plan document could be drafted such that the service provider does not have a legally binding right to the match until 6/1/yr2 (a type of tin handcuff) so they do not have to credit it until that date (if this is done you should make it clear whether this credit is retroactive to 12/31/yr1 or treated prospectively). Could this be what the service recipient is seeking? Even if this is not a pure notional account but amounts are to be contributed to a rabbi trust, then a delay would be a contractual issue between the service provider(s) and the service recipient and not a tax issue. Reiterating everyone else... not advice.

409A is extremely complicated. There generally aren't requirements about when benefits accrue or are credited--409A is generally focused on hard and fast rules for the time and form of payment. That said, though, sometimes the two can be tied together by design... so the answer is going to be very fact intensive and can only be answered for a given plan by reviewing the document.

Agreed, it should have been spelled out in either the plan, an underlying employment agreement, or both - if well-designed. Otherwise, you're in the good-faith/fair-dealing gray area. If some sort of supplement to a qualified salary deferral/match arrangement then adhering to that practice or statutory timing could be deemed reasonable. And, as Peter notes, this is not advice to anyone.

Beyond tax law: A deferred compensation plan is a contract between the employer or service recipient and the employee or nonemployee service provider. If that contract specifies when an amount is credited to an obligee’s account, the employer ought to follow the obligation the employer made. If the relevant document is not specific, the obligor ought to act in good faith, with fair dealing, and reasonably so as not to deprive the obligee of the benefit of the parties’ bargain. This is not advice to anyone.

Fully agree with Effen - if 0% vested terminated employees are deemed cashed out then you have a legitimate forfeiture under the terms of the plan at the time specified in the plan (usually termination of employment). These people are no longer participants as of the plan termination date, same as if someone was say 20% vested and paid out while forfeiting the unvested 80%. If the plan later terminates you do not go back and fully vest. However, be mindful of partial termination issues that could come into play before the actual termination. If you have standard language that forfeiture occurs upon earlier of distribution of vested balance or 5 consecutive one-year breaks but without the deemed cash out provision, then I believe you would need to fully vest those non-vested terms w/o 5-year breaks. However, I would be shocked if that was the case, I can't recall the last time I saw a plan w/o the deemed cash out provision.

I believe another factor is if your document has deemed cash out language in it. That is that anyone who terminates with 0% vesting is deemed to be cashed out. Therefore, if you have paid anyone who was partially vested, and anyone who was not vested is deemed to be paid out, you can probably get away with a 1-year look back. Let the ERISA attorney and the sponsor make the decision.