Under the provision of the Act dealing with the ability to get ER Roth Matching Contributions, is the employee taxed on the match immediately?  If so, what happens if the funds are not vested at the time the employee leaves employment?  Is there a deduction, would they amend their return, etc.?  Or am I missing the mark on the fact that they would be immediately responsible for the tax?  Any help greatly appreciated.

I have been told by a long-time church plan actuary that church plans are subject to the pre-ERISA minimum funding requirements which they summarized as "contributions must be made such that the plan's unfunded liability doesn't increase". Despite several hours of research, I can't find any confirmation that 1) church plans are subject to the pre-ERISA minimum, or 2) that the pre-ERISA minimum is in fact a contribution to at least maintain the funded position of the plan. All I can find is that the plan must be funded (Rev Rul 71-91). Is anyone able or willing to confirm (preferably with some form of documentation) what I was told?

Interested to see if anyone has dealt with a recordkeeper that has a solution for a company that wants to leave their PEP.  My understanding of the process is they must establish a new plan, transfer to the new plan, then terminate the plan.

The recordkeepers that we have PEPs with currently do not have a viable solution for this process.

Curious to see if anyone else is running into this issue and if you have a work around.

Thanks!

Hello benefit experts!

I have not encountered this before, and hence the question.

Two spouses are participating in the same non-governmental 457b plan and have accounts at another company's 401k plan. They are getting divorced. As part of their divorce settlement, one spouse agreed to give over her entire 457b funds to the other spouse in exchange for the second spouse to transfer the same amount to her from his 401k account. The reason they did this was to avoid distribution to one spouse after relocation / termination. The custodian didn't need QDRO, just a letter from the trustee, for the transfer. The transfer is now complete. 

What, if any, IRS documentation or forms need to be filed for this transfer of 457b funds from one spouse to another? 

Thank you!!

This is a very rare occurrence for us but I need clarification.

Participant terminates employment after attainment of the later of age 62/NRA and has balance say of $3,000.  Participant does not respond to distribution communication provided to them.  The plan provides for the standard provisions of mandatory IRA rollover <$7,000 but cash-out if <$1,000.  The plan also appears to say that a terminated participant who has attained 62/NRA is not to be rolled to an IRA but instead provided a lump sum distribution.  That doesn't seem helpful to a person of retirement age.

Is my understanding correct.  Thank you!

A plan sponsor's accountant did not fully transmit payroll contributions to the plan for 10 months of the year. (How they did not notice the substantial amount of money built up or warnings from the recordkeeper is unknown - Excess of $75k).

It looks like the IRS states that significant mistakes made in the aggregate may be self-corrected by making a corrective contribution by December 31. (SCP)

However, in my opinion, this is one of the worst mistakes that can be made while operating a plan.  Would anyone know of a reason this wouldn't fall under SCP?  It seems too significant, but maybe it is not.

As of 10/1, Company A became a wholly owned subsidiary of Company B. Company A's employees moved to Company B's payroll, but continue to work for Company A. 

Company B wants to keep allowing Company A's participants to contribute to their plan until the plans are merged in 2025 but their TPA is saying if they are being paid by Company B they are Company B employees and can no longer contribute to Company A's plan. is that correct?

In past acquisitions, Company B has moved employees to their payroll and continued to remit contributions to the acquired entity's plan until the merger date.  Why would they not be able to do that again? 

Dear sir, 
Thank you for reading my message today. Officially gotten a divorced on 12/2020 in Fort Bend County, Texas and moved to California for my support systems. I had my lawyer but seems like it's done, so move on. Moving on, I agreed to the terms and conditions even though my exwife took advantaged of me. She gave me approximately 30% of the total equity of my property and she took over my home because she couldn't afford to buy a new home. During around late of 2021, she sold the house and lot located in the Philippines, our conjugal property, without my consent. She is currently witholding my fair share of around $95,000 (& she gets $98K) and she has no plans of releasing it to me. I tried to settle this down in a calm and professional level but she gets angry and talk-trash on me. My question sir is this: Can I take her to court legally for witholding my shares as what was stated on our divorce decree? I am financially struggling and she doesn't seem bothered to give me my fair share. What advice can you give me sir? Do I need to get a lawyer for this matter? Thank you and more power to you. 

Can an existing Profit Sharing Plan with a 1/31/2025 plan year end be amended before 11/1/2024 to add Safe Harbor 401k provisions with the Safe Harbor contribution being the traditional Safe Harbor Match? My concern is with the 30-day Notice for Participants in advance of this new feature. The first pay date in November is mid-month.

Hello,

What becomes the "controlling legal document(s)" in a case  where a Defined Benefit Plan's actual  "Plan Document"  does not detail, nor address ,  specific instances under which a Beneficiary Designation Form will be considered  invalid that ARE DETAILED on the Beneficiary Designation Form itself and/or the "Plan's" Summary Plan Descriptions for many years? Thank you in advance for any responses!

I have a QDRO that was signed by the Court and i am sending now to Plan administrator a Certified copy. However, I have an ex-spouse who is surrounded with sketchy, dangerous people who are unset that I am awarded this portion of his retirement. Is there anyway I can request that the plans not communicate with them once the QDRO is approved and the benefits are segregated for safety reasons?

I believe the answer to this question is going to be broader than I'd like it to be, however here goes.   At the highest level, my question is "does a pending subsequent deferral election for a separation from service distribution event expire upon separation from service"?

Example:

The plan document allows for the following:   Time of Distribution as a lump sum or annual installments either a) stated month and year; or b) following separation from service.  For a separation from service, the payments commence the first of the month following the one-year anniversary of the date of separation of service.  

Participant submits a subsequent deferral election to change from lump sum to installments 1 month prior to separating from service.

What's the right answer?

A. Separation from service is the payment event, and since it is not a fixed date, the pending election is not honored.

B. The plan does define when the payment would be made, so the participant knew the date would be over a year away, thus the subsequent election stays pending and becomes effective before the actual payment, at which time the payment schedule is pushed 5 years and changed to installments.

I appreciate any thoughts on this, as well as items to consider if this might be a plan by plan decision.

Employer is terminating 403b and profit sharing plan effective 10/31.  Last payroll runs from 10/20 to 11/2.  My understanding is that only compensation paid prior to plan termination can be used to calculate deferrals and employer matching.  Payroll provider is telling me they cannot split the last payroll check between 10/20-10/31 and 11/1-11/2.  Is this a situation where we have to find a solution or is there another way?  I thought maybe we could put language in the termination amendment that the last payroll to be included will be the payroll period ending 10/19, but its my understanding that because employees have elected to have deferrals withheld we have to withhold those deferrals until the plan is terminated (10/31).  Is there an exception to this rule (if I'm correct) for terminations?  Any thoughts/guidance is appreciated!!

Given sparsity of guidance applying IRC 414 controlled group, affiliated service group rules to 501(c)(3) organizations, in this case, specifically as it pertains to employer eligibility to offer QSEHRA for ACA purposes given 50 FTE cut-off,  I'm looking for reactions to the following situation:   employer currently offers QSEHRA, has under 50 FTEs but is nearing that mark.   The employer is a 501(c)(3) corporation so no stock ownership.   The employer runs a school for troubled youth as well as a thrift store (all within the same corporation).   Proceeds from the thrift store support school operations.   The 501(c)(3) can't afford offering ACA compliant health coverage so it is looking for ways to stay under the 50 FTE, including separating the thrift store into separate entity.   Boards would be under 80% commonality/control to avoid Treas. Reg. 1.414(c)-5 (imposing 80% board overlap/control test on 501(c)(3) orgs).  However, even if thrift store is spun off in this way, all the thrift store revenues would continue to be distributed to the school.   I need to trace through the 501(c)(3) supporting organization requirements if the thrift store were to be spun off into a separate org, but assuming we can structure and meet those requirements and stay under 80% common board overlap/control, I'm concerned with applicable of the "anti-abuse rule" for ACA purposes, which reads as follows:   

"Anti-abuse rule.—

In any case in which the Commissioner determines that the structure of one or more exempt organizations (which may include an exempt organization and an entity that is not exempt from income tax) or the positions taken by those organizations has the effect of avoiding or evading any requirements imposed under section 401(a), 403(b), or 457(b), or any applicable section (as defined in section 414(t)), or any other provision for which section 414(c) applies, the Commissioner may treat an entity as under common control with the exempt organization."

Any thoughts or reactions to this fact pattern for ACA purposes?  Or any ideas for 501(c)(3) ACA-compliant health plan options that might be affordable?   

Currently doing the follow up after surviving the 15th and just found a typo in a participant name on an 8955-SSA.  Her social is correct.  We have found no guidance and can't come to a consensus in the office on whether this needs an amended form or we just leave it till she is filed as a D on next year's forms.  opinions?

Here is the plan information:

Plan has a prevailing wage contribution that is NOT an offset contribution, but a straight QNEC.

Plan also has a 4% PS contribution:  It excludes participants who "receive" the PW contribution from the Profit Sharing.  In reality, they excluded all hourly employees from the PS contribution. 

Of course, the plan does not pass coverage testing on the ratio basis.  Additionally, I believe the plan needs rate group testing as they have different levels of ER contribution.    

Question:  Can the plan be tested on an accural rate for the ABPT for coverage, then on an allocation basis for the rate group testing?

1. If a plan sponsor wants to undo a plan termination, is the 100% vesting that was stated in the resolution to terminate also reversible?
2. The resolution is not a plan amendment and hence the plan document has not been modified. I am thinking that if the termination resolution stated that all benefits were vested as of the termination date and subsequently a resolution is executed to nullify the plan termination the 100% vesting could be reversed as well.  The plan vesting schedule was never amended. I would think certainly benefits accrued after the termination date could be subject to the vesting schedule going forward. Any thoughts on this?

the eligibility requirements in DC and DB plans are different, so NHCE A is eligible in the DB plan but ineligible in the 401(k) plan. when running combo 401a4 test, do we need to prepare an amendment to bring A into the 401k plan so that he/she will be able to get the GW min in 401(k) plan? OR A is not required to get the gateway minimum as he/she is ineligible in 401(k) plan? 

The plan requires the following Vesting Years of Service  1-yr 0%; 1 yr - 50% and 2 yrs 100% on PS and Match.   Years are based on Anniversary Year and there is no hour requirement for vesting.  Plan as immediate eligibility as background. 

Example: DOH 3/1/2023; DOT 9/30/2024. The plan record keeper has their distribution set at 50% vesting because according to them the participant did not complete the second full 12-month anniversary year.  The participant did complete 1000+ hours in the first anniversary year and in the second short year. 

I realize a Year of Service for vesting cannot require more than 1000 hours but can it require a full 12-month Year of Service?  As I write this I'm thinking this person perhaps should have been 100% vested.  The record keeper directly mentioned they did not make it to their second anniversary date for full vesting.  I realize this plan is much more liberal over vesting than allowable.  One alarm in the plan document system (FIS) I cannot get rid of the mention of 1000 hour for a Year of Vesting Service even though that is not checked.

As a side note FIS users when I choose elapsed time for vesting, I cannot select Anniversary Year instead of Plan Year for vesting service determination.

Comments are greatly appreciated.

Tom

We have several 401k plans with Schawb and Fidelity all in brokerage accounts.  Neither prepares the 404(a)(5) disclosure notice.  Should they?  If not Fidelity or Schwab, who would prepare that?  The financial company that set up the accounts?  The TPA?  Someone else?

Thank you