Plan name is different than employer name.  But we filed the 5558 with the ERs name as both the ER and plan names.

For example:

Employer:  Connecticut Fencing Company

Plan name:  Fences 'R' Us 401(k) Plan

5558 filed with plan name:  Connecticut Fencing Company 401(k) Plan

EIN and PN are correct.  Will we have a problem?  Software is giving me a warning.

How does everyone else work with their clients to obtain ERISA bonds? Do you purchase and maintain the ERISA bond for your clients, do you have them reach out to their insurance agent? 

What's the best practice?

Do I have to file a 5500-SF for a plan that was effective 1/1/23 but not adopted until May 2024?

I have a client (small plan, 401(k)) for whom I have e-filed the 5500SF each year.  They no longer use my services, and wish to file an amended 2022 Form 5500-SF.

Can they: create EFAST filing credentials, then immediately file an amended 5500?  

I imagine the answer is "yes", but I am totally unfamiliar with that process, since I file all of my clients' 5500s myself.

Thank you!

The General Instructions for Schedule MEP states "All MEPs must complete Parts I and II to indicate the specific type of plan or arrangement..."  Under Who Must File it states "Schedule MEP (Form 5500) must be attached to a Form 5500 or Form 5500-SF filed for a pension plan that checks the “multiple-employer plan” box on Part I of Form 5500 or Form 5500-SF..."

My MEP experience is limited to closed MEP's so I'm looking for some clarity.  Are participating employers in an open MEP required to file Schedule MEP with their 2023 Form 5500-SF's?  The MEP administrator is saying no, because they have never checked the multiple-employer plan box on Part I of the Form 5500-SF.

Just general discussion re the reality of actual administration. Seems to me that if an employer chooses to offer this, requiring employee self-certification of the 5 required certification elements, annually, would be the way to go. Is there any particular advantage to going with the registering the loan with the employer, or registering with a third party service provider?

I'm also wondering about the realities of what happens when the certification is incorrect, or the loan itself doesn't qualify as a QEL in spite of the certification. According to Q.E-4 of Notice 2024-63, if the certification turns out to be incorrect, the match does not need to be corrected. So does this really amount to a "get out of jail free" for the employer, or are there other ramifications?

The initial determination of whether there is even a Qualified Education Loan (QEL) in the first place can be fairly complex, and I'm not sold on the ability of most participants to accurately make this determination. And I sure as heck don't want to deal with it at the TPA level.

Are you seeing a lot of demand for it? We've only had a few inquiries, but it is coming...

Any discussion is welcomed. 

My understanding is the mid-year safe harbor change can't be done after August 31st (assuming 12/31 PYE) because of the SH notice requirement....given the 3 month requirement for the creation of the new SH plan.

If the new 401(k) SH plan is a nonelective contribution, is a Safe Harbor notice still required ?

Thx!

Hi, all.  I have a client that would like to sell his company and is thinking that the significantly I-can-never-have-enough-liability-to-use-this-up overfunded DB plan his company sponsors might be a great selling point to a buyer who has an underfunded plan or a significant pending liability in its plan.  The idea is that the buyer buys my client, they merge the two plans and voila!  No more excess assets.

Does anyone know anyone who brokers or matchmakes this kind of business proposition?

Thanks in advance!

Ilene

403(b) plan has a Discretionary Match, allocated per payroll, no true-up.  Match formula is dollar for dollar up to 5% of pay.

Participant makes $700,000 per annum.  2024 Comp limit is $345,000.

Should they stop the match when it gets to $17,250? (5% of $345k)  Or stop when their compensation hits $345k?  Or continue the match and we will use $345,000 as comp in the ACP test only?

And there is a wrinkle:

They changed the match starting August 1 to be only up to 2%  What would the annual max be then?  Would it be 3.75%? Or $12,075?

That’s (7/12)*.05 + (5/12)*.02 :  7 months of 5% and 5 months of 2% averaged.

I know it’s a lot here.  Just trying to point them in the right direction if/when to stop.

Keep in mind these are payroll matches, not annual.

We have a H&W Benefits issues resulting from some restructuring.

Parent has two subsidiaries, A and B.  Some of the employees of A are going to be transferred to B and paid under B's EIN, however, they are going to remain participants in A's H&W benefits.  As a result, B will have a group of employees that participate in B's H&W benefits and another (new) group of employees who participate in A's H&W benefits (former A employees).  

What, if any, are the issues with this type of structure?  What should my concerns be?  Is this allowed?  Is everything okay, so long as we are able to pass some sort of testing?  

(I don't do much H&W work; I primarily deal with retirement benefits, so anything you can think of will be helpful).

Thanks a ton!

If we amend a plan to allow for Federal disaster relief distributions, is that semi-permanent?  

Can they remove that provision without a cutback of benefits?  Like age 59 1/2 withdrawals?

Safe Harbor 401k Plan with Cross Tested Profit Sharing

There are 2 Participants at 1/1/2023: 1 HCE and 1 NHCE

The NHCE terminates in 2023 with 1000+ hours credited (i.e. no "Break-in-service"), is 40% Vested, however, has $0.00 account balances (and therefore $0.00 vested account balances) in all sources (never contributed 401k therefore never received SHMatch, and no PS allocated in years participated).

Q: Is the NHCE counted on Form 5500SF as of 12/31/2023?

It is a Relius document and Forfeitures definition includes the "deemed" to have been paid... However, if a Profit Sharing or Forfeitures had been allocated in 2023, the NHCE would have shared in them.  Forfeiture definition goes on to say irrespective of the above, Forfeiture will not occur until the end of the first Plan Year for which the Participant is not eligible to share in the allocation of Forfeitures. Q: does this force counting the NHCE as of 12/31/2023?

Q: Is the NHCE counted simply because no Break-in-service as of 12/31/2023?

Thank you!

Since ICHRAs are still so new, I keep running into issues that I haven't encountered before. My client just terminated an employee who had himself and his Spouse on an individual plan in which he was receiving a reimbursement for. Now that the ICHRA has been terminated the reimbursement is gone and the insurance is too expensive. They would like to join the Spouse's group plan, but the issue we are running into is that the group carrier is saying they need to produce a Loss of Coverage letter showing an involuntary loss of coverage. The Loss Of Coverage letter will show a Voluntary drop though. 

The ICHRA administrator has told us this is indeed a QLE, but I'm trying to determine if it just opens a SEP to purchase another IFP plan or allows them to enroll in a Group plan as well. This is all I could find:

However, a loss of coverage due to a termination of employment or a reduction in the number of hours of employment generally is a loss of coverage due to a qualifying event. Thus, for example, an employee covered by an individual coverage HRA who, due to a reduction in hours, is moved to a class of employees who are not offered any group health coverage would have a right to COBRA or other group continuation coverage in the HRA, as would an individual who loses coverage under the HRA due to termination of employment. That HRA COBRA or other group continuation coverage would be conditioned on a timely election of COBRA or other group continuation coverage and payment of COBRA or other group continuation coverage premiums, as well as maintaining (or enrolling in) individual health insurance coverage.77 Alternatively, an employee who loses coverage under an individual coverage HRA for these reasons may qualify for an SEP to change his or her individual coverage either on- or off-Exchange.78  

https://www.govinfo.gov/content/pkg/FR-2019-06-20/pdf/2019-12571.pdf

Also I wasn't sure if the loss of an ICHRA could be considered a loss of employer contribution towards health coverage:

An individual loses eligibility for coverage under a group health plan or other health insurance coverage (such as an employee and his/her dependents' loss of coverage under the spouse's plan) or when an employer terminates contributions toward health coverage;

https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/hipaa-compliance.pdf

I have a variable appreciable life insurance policy that I want to surrender. I would like the insurance company to mail me a check for the cost basis of the policy, which is not taxable. Then I would like the remaining cash value of the policy, which is taxable,  to be rolled over to my 401K account. Is this possible? The insurance company will not handle roll-overs so I have to get my financial manage to do that. 

I need help answering this question on Schedule R line 21a.

If the employer has 2 plans- a DC plan and a DB plan. The DB plan was frozen a few years ago. Should the plan answer no or yes?

Part VII IRS Compliance Questions 21a Does the plan satisfy the coverage and nondiscrimination tests of Code sections 410(b) and 401(a)(4) by combining this plan with any other plans under the permissive aggregation rules? Yes No 

Thank you.

A 403(b) plan for a non-profit has only a single participant with an account balance.  The participant terminated long time ago.  No one else currently uses the plan and the organization wants to terminate it.  The terminated participant does not reply to any contact requests.

The account is held on a platform at a large national insurance company.  Their instructions were for the non-profit to send a letter of instruction saying the plan is being terminated.  The account would stay at the insurance company as a 403b account but would no longer require an employer signature.  

But if it is still considered a 403b account....can we really say that the plan is terminated?  Could we file a final 5500 with $0 assets at EOY if the account is still a 403b account?

Thanks for any thoughts on this.

A 2023 BenefitsLink discussion aired some observations about whether an employment classification of intern is or isn’t a classification sufficiently distinct from an age or service condition that a plan may exclude an intern who met age and service conditions for treatment as a long-term-part-time employee. https://benefitslink.com/boards/topic/71384-ltpt-interns/.

Interpreting ERISA § 202(c) for a situation that might involve some similarities, the IRS states:

“The student employee exclusion in section 403(b)(12)(A) of the [Internal Revenue] Code is a statutory exclusion based on a classification (students performing services described in [I.R.C.] section 3121(b)(10)), rather than on service.”

And:

“Although [26 C.F.R.] § 31.3121(b)(10)-2(d) provides that hours worked is a factor in determining whether an employee is a student, as well as providing an unsafe harbor if an employee normally works at least 40 hours per week (which is equivalent to 2,000 hours a year), the statutory student exclusion is not based principally on service.”

Additional Guidance with Respect to Long-Term, Part-Time Employees, Including Guidance Regarding Application of Section 403(b)(12) to Long-Term, Part-Time Employees under Section 403(b) Plans, Notice 2024-73, 2024-41 or 2024-42 I.R.B. --- (to be published Oct. 7 or 15, 2024), available at https://www.irs.gov/pub/irs-drop/n-24-73.pdf, at A-5 & footnote 7 (emphasis added).

Does this change our thinking about whether a for-profit employer’s plan may exclude an intern from elective deferrals?

Good morning,

I haven't worked on plans part of a master trust(MT) for awhile

2 DC plans 001 & 333 are part of MT

No audit was done for MT but Form 5500 filed

Instead, each plan filed their own detailed Sch H with audit reports and auditor mentioned in 2022 audit notes about the plans being part of MT

Is this ok?

In the past, I have filed the audit with MT Form 5500 and the plans would just list their $ in MT on Sch H. 

I'm also questioning the use of plan #333? this is a union 401(k) plan- no other employers

Much thanks,

Lexy

In mid August, the debit card tied to my HSA account began getting declined even though I have significant funds in my account. It remains non-functional almost two months later.  
 

The institution which provides this service was selected by my employer. Health benefits including HSA are part of my compensation. 
 

The HSA provider indicates that they experienced some kind of technical issue which is effecting my account.  They change their story each time I call and cannot provide me an ETA for resolution. After two months, I’m concerned that I may never gain access to my funds. 

Are there specific compliance rules that pertain to this situation?  Is this regulated by the FDIC? Can I report this? Should I speak with an attorney?  Do I have the option to move the funds?

Thank you in advance for any guidance you can provide. 

Hi,   I have a plan situation one of the plan that got terminated back in 2021 has now received a small $ amount due to SDB earrings.  Is it common to see SDB earrings getting posted into a terminated account? should these funds be even posted into a terminated plan? 

Also, since there is a posting of $83 into the terminated plan will the plan sponsor require to amended the 5500? 

Thank you.