We have a plan sponsor who created a new 401k plan for the business effective 1/1/2023.  Auto enrollment starts 1/1/2025, but they have only 6 participants, so they can be exempt from the automatic enrollment requirement.  However, if/when they exceed 10 participants sometime after 1/1/205, would they then be required to offer auto enrollment?  That would seem to be bulky in a plan document/SPD to have this entire auto enrollment section but include a blurb that its not effective until the company exceed 20 employee.

Thank you

§ 2530.203-3 Suspension of pension benefits upon employment.

URL: https://www.ecfr.gov/current/title-29/section-2530.203-3 

Citation: 29 CFR 2530.203-3

This section sets forth the circumstances and conditions under which such benefit payments may be suspended. A plan may provide for the suspension of pension benefits which commence prior to the attainment of normal retirement age, or for the suspension of that portion of pension benefits which exceeds the normal retirement benefit, or both, for any reemployment and without regard to the provisions of section 203(a)(3)(B) and this regulation to the extent (but only to the extent) that suspension of such benefits does not affect a retiree's entitlement to normal retirement benefits payable after attainment of normal retirement age, or the actuarial equivalent thereof.

Retirement plans seem drafted to encourage distributions occur only under controlled circumstances. Therefore, individuals who resume employment would seem helpful, as these persons have established an alternate source of income. Therefore, allowing distributions to continue, if against the prerogative of these individuals, seems counterintuitive. To present an analogy, individuals who decide to reduce the sodium/salt intake of their diet, receiving as gifts saltshakers, which do contain salt. The individuals do not request and would prefer not to receive these saltshakers, yet the saltshakers still arrive containing salt.    

Is there a hard rule that states plan sponsors with both a Defined Benefit and a Defined Contribution plan must be tested together if each plan passes nondiscrimination testing on its own? And if there is no hard rule, what is the exception?

Caught in an endless loop of Chat Bots and Non Humans when simply trying to get protocol for IRA forced rollovers from Inspira.  Anyone know or what platforms are practitioners using for forced IRA rollovers?

Client has a Safe Harbor Match plan with immediate eligibility. They exclude part-time employees as there are many who work just a few hours a year due to the type of work. ie ushers, etc. Plan has failed the minimum coverage test. How can this be prevented from happening in future years? Any ideas would be appreciated.

1) Is there a problem with filing a 5500-SF even tho the plan is an owner only plan and could file an EZ? This is a new plan in 2023.  The employer will have a non-owner participant in 2024 and will need to file an SF for 2024 so I'm thinking we could go ahead and start with the SF.

2) If a plan has been filing an EZ for a couple of years and needs to change to SF because he brought on an employee, is the switch from EZ filing to SF filing as simple as just starting to file the SF?  I want to make sure I'm not missing a question on the SF or 5558 that asks if an EZ was filed in a prior year.

3) If a plan consists of only owners, an ERISA bond is not needed - is that correct?

A small non-pbgc defined benefit plan with 12/31 year end terminates 11/30/2023. All assets are distributed by 5/31/2024.

1. Since this plan has a 12/31 plan year end, is the 2023 5500 filing date 7/31/2024 as usual? Or is it 6/30/2024 (7 months after the termination date)?

2. Or do you file 2023 by 7/31/2024 and then for the 2024 year by 12/31/2024 (7 months after all assets were distributed)? 

3. Or are there some other filing due dates?

Thank you!

If you hope for or fear tax and ERISA legislation nearing the end of the 118th Congress, watch in mid-December.

Based on Congress’s continuing resolution many expect they will enact by September 30, the next end of appropriations would be December 20. That’s the Friday before Christmas Day.

In the remaining session after 2024 elections, look for Congress to turn to the National Defense Authorization Act for fiscal year 2025, and to some effort to avoid or invoke a government shutdown.

Those efforts might include an appropriations or budget-reconciliation bill, which could include law changes the Senate could not vote on under a regular-order procedure.

My company is implementing voluntary layoffs due to short work. They are allowing us to keep our medical insurance but we are required to pay our premiums during the layoff period. Do I still receive my section 125 tax benefit for premiums paid? I want to ensure my W2 will be correct at year-end. Thank you for your help.

For all you folks who may be impacted, here's hoping you come through it with minimal effects. Best of luck!!

Prior to USERRA, please describe the stipulations on veterans' reemployment conformity and the associated impact on vesting/benefit accrual. Please provide a diachronic survey. 

We have an Employee Stock Purchase Plan (ESPP) that includes two offering periods each year, with purchase dates at the end of June and December.

My question is whether we should carry over any unused funds to the next purchase period or refund them to the employee. I would prefer to carry over the excess funds to the next period. However, what happens if an employee withdraws from the plan or chooses not to contribute in the next offering period?

Are there any potential issues with carrying over the funds in that case?

Thank you.

We have an ESOP where a participant can take a distribution after termination and they can sell the shares to the company.  Unfortunately, this is no longer sustainable, as we are having to repurchase shares at such a rate that it isn't feasible for budgetary reasons.

We want have been advised we should revise our distribution policy.  This makes sense -- if we can delay distributions, we can delay repurchases.

1. We want to do this for all non-terminated participants -- is that okay?  I found some guidance saying this works, and even some that says it might even work for terminated (non-payment status) participants, but that's unsettled.
2. I think the best option is to set a "lump-sum threshold," but I can't find any guidance regarding how to set that dollar amount.  Are there limits, or can we just set it at any amount we want?  I am aware that we are limited to five years of installments (unless over that ESOP threshold, but we don't have balances in excess of $1m), but are there any limits on how low we set the lump-sum threshold to be able to pay over the five years?

Is there anything else I'm missing?  Is there a better way to fix our repurchase obligation issues?

Employee is terminated on 11/1.  Group Health benefits terminate at the end of the month (11/30).  Employer uses a third-party administrator for COBRA and sends termination information over to COBRA administrator on 11/14.  What is the deadline for the third-party administrator to send out the COBRA election notice - 11/29 (14 days from notice) or 12/14 (14 days after benefits termination) or some other date?

I believe COBRA rules state that employers have 30 days to provide notice to plan administrator and 14 days for the plan admin to send election notices.

Employers only get 44 days to send notices if they send out their own COBRA letters directly, correct?

TIA

An individual is a sole proprietor and also is a partner in a partnership with 51% ownership and one other partner at 49%. I think this is a brother sister controlled group. Does this mean that the minority partner must be covered in the defined benefit plan of the sole proprietor to satisfy the 2 participant floor of 401(a)(26) considering the controlled group? If so, could a solution be for the  spouse to become  a W-2 employee of the sole proprietor and then cover the spouse to satisfy 401(a)(26)?

If an individual has two plans, a 401(k) and a defined benefit plan, and the defined benefit plan exceeds $250,000 in assets, but the 401(k) has not been funded, is it required to file a Form 5500-EZ for the 401(k) showing one participant and $0 in assets?

I have a small dental practice plan.  Sole owner is married with a minor child to spouse who has a sole-proprietorship business earning about $100k annually with no employees.  Both spouses participate in the plan, make employee deferrals and receive a SH match.  With the change in the rules for 2024, since the spouses no longer have to aggregate for testing purposes, I guess I now have a multiple-employer plan going forward.  Sole-proprietorship will be desirous of funding a PSP contribution on top of the match. Other than changing the employer type on the 2024 Form 5500 and adding the MEP addendum, is there anything else required on the government reporting side or the plan document side?

Hi

I have not worked on these plans well over 10 years.

Looking at a 5500-EZ that has been filed with no assets for many years. I was told that, technically these plans are not required to reflect assets, at least on 5500-EZ i.e. ok to file them blank.

I checked the 2023 EZ instructions and unless I missed it, did not find anything backing this up.

One set of instructions I found stated the do not need to file EZ unless assets are over 250k.

Am I missing anything on this?

Thanks

This is confusing and I do not have all of the facts, but hoping for some thoughts on whether this would fly

Owner has a small business and has a 401k plan.  Owner is also the exec director of a non profit.  

Exec director wants to start a 403b for the non-profit.

She also wants to move her business 401k into the new 403(b) as she wants to have her business payroll run through the non-profit.

Based on this alone, could we move the merge the 401k into the 403b and could the business employees participate in the new 403b plan?

I need to confirm if the business is being dissolved or will the owner still have the business.  And if the business is still around, the business really cannot be part of a 403b plan, correct?  But about the idea of running the business payroll through the non profit?  Is that a valid work-around to have the business employees participate in the 403b?

Thank you for any comments.  

Participant pay in 2021 means Participant is HCE in 2022.

Participant terminates 12/31/22 with pay $3,000 below HCE limit for 2022

Participant receives last paycheck in 2023 for $5,000 (ie $2,000 over HCE determination for 2022).

Pay definition is W-2 so final paycheck not included for plan purposes.

Our conclusion is to include Participant in 2023 ADP test as NHCE but wondering of other thoughts?