Our plan document uses the IRS safe-harbor rules for hardship withdrawals.  Am I correct that overdue student loan repayments do not count as approved reasons for hardship withdrawals?  I don't want to deny the request until I am sure.

I have read threads about this and it still seems unclear.

We are looking at a plan that is a 1 participant DB that has existed 9 years but has never had an AFTAP. Benefit accruals are not frozen through year 5. Benefit accruals are frozen years 6,7,8 and 9. Clearly the participant does not get benefit increases for years 6-9. If she worked more than 1,000 hours each year in years 6-9 does she at least get a 415 limit increase for years of participation? I would think not. 

This appears to be a plan that has always been well funded. If an AFTAP is done this year (above 110%) is there any way to restore accruals (and 415 limit increases) for years 6,7,8 and 9?

Thanks!

I know the answer but just thought i'd throw it out there.

company always deposits 401(k) on time. first 401k with new recordkeeper, despite best effort they couldn't get it through until past 7 business days.

I think we still need to report it but I feel like it's a reasonable period due to circumstances

Hi all--I'm getting conflicting advice on what should hopefully be a straightforward issue.

I work for a US-based small business, and we have a wholly-owned French subsidiary. US business is the parent co & pays the US employees, while the French sub pays our French employees. Meanwhile, we also have a few remote individuals in countries like Canada & Portugal, and we use an EOR (Rippling) to pay them.

I am looking to set up a 401K for our US employees and speaking to potential plan providers. One plan provider said our structure should present no issues when it comes to controlled groups since any associated rules would only be looking at US employees; however, another provider has been adamant in saying that all non-US employees (French & otherwise) will be included in Department of Labor non-discrimination testing due to controlled group rules.  If the latter is true, this obviously prevents an issue for us since (1) we cannot actually offer a 401K to non-US employees, and (2) wages are very different across country lines.

Can someone please advise?

I am getting mired in what should be a very simple problem:  Whether the employer has an obligation to contribute earnings in a situation in which an employee's entire after-tax contribution for the year is correct, but the timing of it is wrong.

Example:  Susie has regular compensation of $345,000, plus a $50,000 bonus she receives on January 15.  She elects to make an after-tax contribution of 5% of compensation.  The employer erroneously fails to treat the bonus as compensation for purposes of the plan.  This has no effect on the total amount of her after-tax contribution for the year, because her compensation in excess of $345,000 would have been disregarded.  However, if the bonus had been taken into consideration,  a $2,500 after-tax contribution would have gone into the plan in January, and then contributions would have stopped in late October.  Presumably, the employer has no obligation to make a QNEC, because total after-tax contributions for the year would have been correct.  However, is it obligated to make up earnings for the period from January 15 through when contributions would otherwise have stopped?

Rev. Proc. 2021-30 does provide that:

Quote

the Plan Sponsor may treat the date on which the contributions would have been made as the midpoint of the plan year (or the midpoint of the portion of the plan year) for which the failure occurred.

So presumably we could treat the date on which contributions would have been made as July 1, even though we know that they would actually have been made on January 15.  But we still have the issue of whether the sponsor is required to make up earnings for the period July 1 through end of October.

Hi All,

I'm a relatively new EB/EC attorney and looking to increase my knowledge of ESOPs; how to create, administer, etc. 

Do you have any recommendations for secondary sources, guidebooks, etc. to help me learn more?

Thanks in advance.

Can someone please confirm that the 415 limit is per unrelated plan?

If someone participated in a plan for the first part of the year and maxed out their contributions at 23,000 (in 2024) and then went to another job with a 401k plan that permitted after tax contributions - with the new plan, would the participant be able to contribute a total of $69,000.  Do I have this correct?

Can anyone point me to a US Treasury Reg or IRS document that spells out that the 415 limit is per plan and not by participant?

Thanks in advance.

Company F sponsors a 401k PS plan and wants to join a MEP.  Can they terminate their current plan and roll the money into the MEP as a rollover contribution (I don't think they can take it out due to successor plan rules)?

Of course, they want to do this immediately... and both plans are SHNEC.  I figure as long as they give each person 3% of total comp for 2024 (probably all into the MEP), that's what counts.

Any other pitfalls?

Thanks.

Please Help, can’t find where the plan was in 1997 or balances or a statement or anything to be able to have that subtracted from a Quadro any advice? I have checked with the plan administrator. They don’t seem to know anything I checked with Fidelity before they rolled it over to an Ira. It was under one company name, but I can see that the company changed their names several different times in different various ways I looked up the 5500 form, please help 

Participant has passed and spouse passed some years ago.  We believe 3 adult children are beneficiaries.  Question - I imagine the beneficiaries will need to waive the annuity as the default distribution option just as the participant would if he had lived and elected to roll to an IRA?

Thank you

I must lead a charmed life; it has been a long time since I've had a 401k plan not refund within 2.5 months (that I can recall; I'm also getting older).  Now I've got one, and I was positive that the earnings on the refund were included in the amount reported on the 5330... but that's not what the instructions seem to say.  It says the tax is on the excess contributions and are the amounts "actually paid" over what was allowed... and doesn't mention earnings.

Am I just mis-remembering this rule?  Is it really just the base amount of the refund that gets taxed?  If the earnings are included, is there a cite for that?  Thanks.

Does anyone know of a good summary of what specific MANDATORY SECURE/2.0 provisions specifically do apply to a Governmental 501(c)(3) non-ERISA 403(b Plan? A small list, I know, but it would be handy to have.

Thanks.

Greetings:

Here is an interesting question: Say a fully-vested DB Plan Participant leaves (either voluntarily or involuntarily) the company providing said DB Plan. After several years, said employee returns to employment with the same company which is still offering the same DB Plan. Does the Plan Administrator need to have the employee/participant  "reaffirm", in writing, the designated beneficiary for said benefit in the event of death of the participant? Thanks to all who reply in advance!

Hello All:

GENERAL QUESTION not based on a specific example. In General Terms, for DB Plan Administrators who are granted "discretionary authority" by their  Plan Documents, how much can they allow "exceptions" to written rules in the Plan's documents or Instruments before they face potential liability( i.e. potential litigation)  for abuse of discretionary authority? THANKS IN ADVANCE!

As we know, the correction rules for nonqualified plans differ depending on whether the affected employee is an insider or not. If an employee was an insider in the past as defined by IRS Notice 2008-113 by virtue of his status as an officer while he was employed, is he still considered an insider for these correction rules after termination of employment? Thank you. 

Are there any land mines on the discrimination or other 125 plan road for an employer that maintains two IRC Section 125 plans for the benefit of its workforce? Must the two plans be aggregated for discrimination testing?

Hello - I'm running into a question with a plan audit that I am looking for assistance with. Any guidance would be greatly appreciated. Thank you.

Facts:

There are multiple defined contribution retirement plans sponsored by the same plan sponsor within one contract at John Hancock Life Insurance Company (a group annuity contract). The investments are pooled.

Question:

Should plans configured this way have a master trust agreement and follow the master trust reporting requirements for Form 5500's? If the answer is no, is there any guidance or rule that explains this?

Hi

Facts:

Company ABC owned over 80% (but not 100%) by Joe and sponsors DB plan (started 2021)

Company XYZ was owned by Joe 60% but sold in 2020 (i.e. not in existence when the plan has started)

In each case, the remaining ownerships were unrelated.

Joe has 125k average salary since 2021 paid from Company ABC that is used for DB plan purposes.

Going back to years 2015/2016/2017 (*prior to plan inception), Joe had 150k salary each from Company ABC and Company XYZ i.e. 300k in total/per year.

To determine Joe's 415 lump sum for 2024, what is Joe's salary?

Assuming that you can use the 300k average (obviously limiting to 401(a)(17)), can you point to a code section to back this up or a starting point?

Thank you

A municipality wants to set up a DC plan under which retiring employees can defer their accumulated PTO bank when they retire.  The municipality has been told (not by me) that it can set up a 401(a) defined contribution plan for this purpose.  The leave bank will be the only source of contributions to the plan (no amounts other than the PTO bank contributed by the municipality or the employees).  Employees won't be required to contribute their leave bank, they will also have the option to receive a payout at retirement in a (taxable) lump sum.

I can't fit this situation under any of the PLR's, and am concerned this this is really an impermissible "cash or deferred election."  Any thoughts?  Has anyone seen this type of set-up before?  What if I drafted the plan so that employees were required to defer their leave bank at retirement (i.e., try to turn the leave bank into a "mandatory contribution")

I am aware that these amounts can be deferred under a 457(b) plan - but some employees have leave banks that are much larger than the annual limit under 457(b).

Traditional money purchase pension plan covers collectively bargained employees. A group would like to allow a back door CODA by allowing participants to make negative elections. For example, the default contribution rate may be $10 per hour worked, but an employee has an annual options to elect to defer only $5 per hour and take the rest as wages. 

I'm sure I've seen IRS guidance stating a "negative election" of this type is an impermissible CODA, but cannot find it now. Any help or direction would be appreciated.