Traditional 401k plan has an ACA feature with auto escalation (not EACA nor QACA). Plan is a calendar year plan but auto escalation occurs on July 1 to coincide with pay raises. Plan provides annual ACA and escalation notice between 30 - 90 days before the beginning of the plan year. 

Question - since the escalation takes effective later than 90 days after the annual notice is given, is a second notice required to be given later in the year?

I have searched the EOB and these boards, but can only find notice references when the escalation occurs on the first day of the plan year. I am thinking a second notice should be given, but am getting push back to prove it. 

Thanks

I am 67 and retired but have not begun withdrawals from my well-funded traditional IRA. We own our home outright – no mortgage. We need a new car, but don’t have the cash for it. What’s the best strategy for buying this car? I have considered a home equity loan and car loans. But those would be paid back with IRA withdrawals anyway. Why not withdraw the full purchase price of the car from the IRA? I would the buy the car, then sell our old car on my own and return the proceeds from that sale to the IRA. If I sold our old car first we would be without a car and under pressure at the dealership to move faster than I am comfortable doing.

1. Is this my best strategy versus some type of loan?
2. Can I deposit the used car proceeds into the IRA?

Do I need to file a Petition for Contempt if my ex-husband refuses to sign a QDRO?

Helpfully expound upon the restrictions for distributions of rollover amounts. Particularly, if rollover amounts remain subject to in-service distribution restrictions. The provenance of the rollover amounts perforce might affect the situation, if the rollovers proceeded from elective deferrals, Roth amounts, after-tax distributions, amongst perhaps further items. 

https://www.kiplinger.com/taxes/supreme-court-strikes-down-chevron

Worth a read.  This will change our world dramatically. For the better or for the worse I do not know.  My guess is some of both.

Feel like I remember this coming up before but now I can't find anything. 

Bonuses not excluded comp.

Employer pays a bonus, NOT off-cycle (i.e., paid with a regular paycheck, so EE just gets a larger paycheck for that pay period). 

Say Employee A has a $100/paycheck deferral election. Employer should just withhold "Normal" election correct? Since it is being paid in a regular paycheck, there would not be an increase in deferrals withheld?

Hi folks! 

Scenario:

• Parent owns 100% of Company A. 
• Parent/Adult Child are 50/50 partners in Company B. 
• Unrelated entities. 

Am I correct in that there is no controlled group here? It is my understanding that ownership is only attributed from/to Parent/Adult Child if they own over 50%, not 50% exactly. 

Or am I not reading the rules correctly?

Thank you!

Donnie

Lets assume employer has 100K in Health FSA forfeitures fro the applicable year. As I understand it, to the extent forfeitures represent "experience gains," the section 125 rules and ERISA would regulate what an employer can do with the forfeitures (i.e, defray plan expenses, reduce EE salary reductions for the following PY or refund). Lets assume now that the loss experience (i.e., the amounts the employer ate in overspent accounts relating to mid-year terms) is 95K resulting in net experience gains of 5K. lets assume further that the admin expenses for the Heath FSA for the applicable year are 5K.

5K out of the 100K in gross forfeitures is eaten up by the admin expenses leaving gross forfeitures of 95K, which after applying the the experience loss results in 0 net experience gain for the applicable year. Does that mean that the employer can use the 95K in forfeitures (i.e, net forfeitures after deducting the 5k in admin expenses) as its sees fit (even for paying expenses for unrelated benefit plans) since there are no experience gains? Brian, thoughts?

There is a new audit client that did not attach the accountant's review of the 5500 upon filing.  Would anyone be able to cite the potential ramifications and penalties for an error like this?  I believe this would have to be corrected through VCP or DFVC, but I'm pretty sure the penalty would be under DOL/IRS discretion.

We have a situation where a client has won a judgment against a defendant.  Instead of taking the settlement money directly, the client would like the defendant to fund a NQDC Plan.

Because the client is not a service provider to the defendant, I don't think 409A applies.  Is that accurate?

If so, what, then, governs the NQDC Plan?  Is this based entirely on the "constructive receipt" doctrine?  Do we still have to follow the 409A restrictions regarding distribution events, or can we be a bit more creative (e.g. if the client has a "down year" where their profits are below $____ it would trigger a payment)?

I appreciate any advice, even if it is just spit-balling.

Perhaps governmental plans lack the requirement to allow for five (5) consecutive periods of severance/year breaks in service to forfeit amounts where an extinguishing distribution of the accrued benefit or account balance has not occurred. Please provide helpful citations for this inquiry. 

Hi,

Thank you all as always for the insights and help. It's one of those days. 

Need to file a DB 5500 and schedule SB for 19, 20, 21 , and 22 with the DFVCP.

1.Since it is now 2024, the 2022 can be filed on a 2022 5500. Correct?

2.  However, the 2021, 20, and 19 must be filed with using a 2023 form and inputting the plan year on the 2023 form..as 1/1/ 2021 thru 12/31/2021 and the same for 20 and 19?

2. How is the schedule SB e-filed for 19, 20, and 2021? As an attachment only?

3. And what about the attachments that are ussaly attached with the e filing of the SB (assumptions, provisions, etc.)?

Thank you.

an EOY valuation small plan, the plan sponsor made the contributions throughout the plan year and nothing else was made after the plan year. I will need to project the contributions as of the valuation date 12/31/2023 then subtract these amounts from EOY asset value as the market value in the valuation. 

but in AFTAP calculation, I just use the EOY asset value without project the contributions, am I right? are there any regulations specifically mention these? thanks!

Hello, we are looking at terminating a multiemployer employee benefit plan that provides vacation benefits to the participants. Contributions are made through payroll deduction by the participant's employer. I can find plenty of info from the IRS relating to the termination of a retirement plan, but little to nothing on welfare benefit plans. Can anyone provide guidance? 

I am assuming we will need to:

1. Amend the plan to state a termination date

2. Ensure all assets of the plan are distributed properly

3. Maybe file a Form 5300?

4. File a final Form 5500

The following cases hold that if a divorce Participant has remarried and retired before a QDRO has been perfected, Federal law holds that the Participant's new spouse vests in the right to receive the survivor annuity and the former spouse (prospective Alternate Payee) irrevocably(?) loses the right to receive that survivor annuity. 

Hopkins v. AT&T Global Information Solutions,  105 F.3d 153 (USCA 4th Cir. 1997) - at
http://scholar.google.com/scholar_case?case=9954117838131396049&q=hopkins+at%26T+global&hl=en&as_sdt=2,9

followed by Rivers v. Central and South West Corporation, 186 F.3d 681 (USCA 5th Cir. 1999)  at-
http://scholar.google.com/scholar_case?case=2296953953561556363&q=rivers+central+and+south+west&hl=en&as_sdt=2,9

Dahl v. Aerospace Employees' Retirement Plan, a 2015 case from the U.S. District Court for the Eastern District of Virginia (and cases cited therein) - 
https://scholar.google.com/scholar_case?case=3487596170773082469&q=dahl+v.+aerospace&hl=en&lr=lang_en&as_sdt=20000003&as_vis=1  

See also Vanderkam v. PBGC, 943 F. Supp.2d, 130 (2013) setting forth a thorough discussion of this issue.  

And the 2015 case of Dahl v. Aerospace Employees' Retirement Plan, No. 1:15cv611 (JCC/IDD), United States District Court, E.D. Virginia, Alexandria Division. https://scholar.google.com/scholar_case?case=3487596170773082469&q=dahl+v.+aerospace&hl=en&lr=lang_en&as_sdt=20000003&as_vis=1

But I come across statements from time to time that if the new spouse consents to waiving her right to survivor annuity benefits (how that happens is never addressed), then a QDRO can be effective to restore survivor annuity benefit to the former spouse.  

I also have contemplated what would happen is the new spouse predeceased the Participant, or if the Participant and the new spouse divorced, whether not a new QDRO could restore QJSA rights to the former spouse?

Any ideas?  Case law?  Statutory references? 

Thanks, 

David 

If you are (or know) a small TPA (<300 plans) looking to begin a transition to retirement and want your clients to get the amazing service they are used to with a family-owned, well-established TPA firm (currently <1000 clients), please send me a private message. My firm is family-owned and operated, has been in business for 40+ years, and has a full succession plan in place. We have the infrastructure and processes to take on a block of business while still providing the personalized service of a small TPA. If you don't want to sell out to private equity, VCs, or the huge national recordkeepers acquiring TPAs (I am bringing those clients on fairly often when they get upset that they lost the personal touch), we may be a good fit. I am willing to entertain various business structures. Thank you.

I'm not aware of any formal guidance on this issue - plans are often effective January 1 in such situations to avoid prorating limits, etc.

Curious as to how folks generally feel about this? The EOB refers to an old IRS Q&A response at an ASPPA meeting opining that it was allowable, but of course that's unofficial. (Naturally, no retroactive deferrals allowed!)

Thoughts?

Company was purchased by another in October.  Calendar year plan year for welfare benefit plans.

It was a quick sale apparently with no contractual guidance on sponsorship of the benefits, but they continued through the end of the year (& actually still continue).

They are planning to have the 5500 filed under the name of the original owner who contracted the insurance carriers file for the full plan year.

Ever seen where they file a short plan year and close out the plan, and the new owner would take over the 5500 filing for the last few months for another short plan year? Or very simply show the new owner as the plan sponsor as of a 12/31 snapshot of the plan?

Participant makes a Roth 401k election 1/1/24, they just notice that nothing is being withheld from paycheck in June, however, the correct Roth contributions per election have been funded to participant's Roth account (not sure how this happened). So, nothing withheld from paycheck but Roth is funded. The correction, in my thought process, is MDO, since failure to implement correctly. I would use EPCRs to correct the MDO, provide notice and fund a qnec, but question about the Roth that has been funded. 

My thought was to transfer the $5k that has been funded out of his Roth to the forfeiture account and use later. Is there an issue with that since it is in a Roth source?

Is there a better solution in this case?

Thanks in advance! 

Legal settlement agreement calls for (among many things) no company contribution to a (now) former employee and plan participant. Covers what would have been a short plan year for the former employee. The employee did make some 401(k) contributions, and would be eligible for safe harbor plus profit sharing company contributions.

Simple question - can this be done?