Plan has different eligibility requirements for deferrals and safe harbor match.  If a participant is eligible for deferrals, but not the safe harbor portion, must that participant receive a safe harbor notice?  Generally the notice requirement is satisfied if notice is given to each employee eligible to participate, but I can't determine if that means eligible for safe harbor or for the plan in general.   

Thanks for any guidance.

Plan has a few participants whose religion precludes them from investing in any of the plan's alternatives.

There are several hundred active participants.

What duty, if any, do the fiduciaries/trustees have to include a fund/funds that would be eligible under a haram/halal investing strategy?

It is quite a niche corner of the investing world (at least here in the US), and funds can go from performing to underperforming quite rapidly quarter over quarter.

Would the these participants have some sort of religious discrimination claim if these types of investments are not offered?

just on a fact-finding mission for now.  I sent the plan sponsor to their attorney, but I'd like to get the community's take on this.

Starting to work my way through this. Welcome news that certain class exclusions can apply. But, they cannot be a proxy for for an age or service requirement.

Consider the following: plan currently excludes interns. ALL interns work between 500 and 999 hours. My reading is that this exclusion would not be valid, and LTPT rights would need to be granted to interns that otherwise satisfy the LTPT age/service requirements. Agree/disagree?

Now, if interns work various numbers of hours - some 500-999, some over 1,000, and interns are an excluded class, then it should be permissible to exclude them from LTPT requirements. Agree/disagree?

Thanks.

A sole prop established a solo 401k plan in 2023, wants to include after-tax employee contributions and do the mega-backdoor Roth with it.

(1) do the after-tax contributions have to be deposited by 12/31/2023?

(2) Does the Roth conversion have to be done by 12/31/2023 as well in order to be applied towards the 2023 tax year?

Thank you

Company inadvertently added a term date to a participants census at the r/k.  Subsequently, the participant was forced out (twice).

Neither of the checks were cashed and they will be re-deposited into her account.

However, there was 20% withholding from one of the checks.  How is this usually recouped?  (This did not cross tax years)

Hi all,

Wanted to start a discussion on what future interest crediting rates would be considered reasonable assumptions for funding valuations for Market Based Cash Balance Plans.

These plans are designed to reduce risks of underfunding but if the assets are aggressively invested and, depending on the method of determining a future return assumption, the assumed future interest crediting rate could be higher than the relief funding rates resulting in minimum required contributions greater than the pay credits. Is anyone aware of any regs or approved methods for determining a reasonable future interest crediting rate that would not result in unreasonable underfunding results and minimums greater than actual pay credits?
It seems applying a 6% cap on the projected ICR would be reasonable considering the new legislation in Secure 2.0 but this is still high.

Curious if anyone ties the projected ICR to a segment rate similar to how the future ICR would be determined at plan termination for market based rates? Goal is to avoid underfunding results when the plan sponsor is funding the annual pay credits and the plan has a more aggressive asset mix.

Hi, 

When a 401k Plan terminates, the plan sponsor is bound to send Plan termination notice to participant, beneficiaries and retired etc.  Should this notice be sent only via a certified mail or can they use digital platform like e-mail/online to send this notice instead of certified mail?

Thank you!

Client's current administrator is moving in a different direction (read: Plan too small) and Client needs a new plan administrator. Client does not want to use its 401(k) Plan administrator. unless last resort. Any suggestions for Administrator that will take a small plan?? 

Has anyone's client received a letter from the DOL for a missing 2022 Form 5500 filing?  This is the second one of our client's that received a letter and we have ACK ID and the filing appears on the EFAST website.

Thanks!

Hi

This is a new one for me.

Law firm Partnership XYZ is splitting (no PBGC coverage). Currently sponsor a DB and DC plans. 2 partners and a bunch of employees.

Partner Mary wants to keep the current plans.

Partner Joe wants to set up his own DB/DC combo in his new company. Joe also will take a few employees with him.

Other than treating Joe and a few employees as terminated and carrying over the benefits accrued in the DB plan to the new law firm, is there anyway to transfer DB benefits for Joe and the employees coming with him?

Or new plan(s) has to be set up for Joe's new company?

For the DC plan which has deferrals+SH+PS, if a new plan needs to be established for 2023, can SH still be set up for 2023?

Any suggestions/experience with this situation is appreciated.

Thanks

I can't recall if there is a timing restriction for switching a plan's ADP/ACP test method of using current or prior plan year.  eg can the selection be made prior to the end of the plan year for the current plan year?

Plan Document for 401k Plan was created in the name of the now prior TPA.

New TPA uses the same platform/vendor for said Plan Document.

Can Plan Document be amended using existing Plan Document either of the following two conditions:

• New TPA has its documents under its name
• New TPA does not have its documents under its name

Note: Plan Document is going to be amended in full under new TPA, but certain errors in original TPA document need to be corrected retroactively, and trying to determine best approach.

existing 401(k) SH match is TH.  Starting a new combo (CB + stand-alone PS) effective 1/1/2023.  Owners are covered in all 3 plans.  Am I correct that my new (CB +PS combo) is TH (thus, I need to give 5% immediately vested TH allocation in the PS paln) in spite of the fact it is their first year?

What can I do? I retired on May 1st of 2022. I had applied for Medicare A&B prior. On may 5th, 2022, 5 days after retirement,  I had a home accident, and needed emergency care. Had to have 6 staples on my scalp. Am I covered by Medicare, or not. The emergency clinic claims I am not eligible. Please help!

Proposed regs released Friday morning 11/24 -- happy Thanksgiving, all!

Assume DB plan frozen in 2015, no future credited service or pay - hard freeze. 

Older participants working significantly past normal retirement have a solid chance of running into compensation limit even if they're well below the dollar limit (pleasant workplace and working very late age full time not uncommon).

When I read 415 regulations, I see that the compensation limit is described as being based on compensation earned during "years of service". When you follow the link defining years of service, describes service credited for benefits. Service to the company doesn't stop, but the freeze stops earning years of benefit service.   

Participants continue to get pay increases as time passes. Assume all participants are full time - no phony active participants "working late in life" but not actually showing up. When doing the final retirement calculation, which years of compensation are allowed:

1) only those earned prior to the hard freeze?

2) years that would've otherwise met the definition for service except for the freeze amendment through cessation of employment (as in, all years of employment, not just years before freeze)?

My wife is a participant in a cash balance plan as a partner in a medical practice. Some internal discussions have made it seem like the plan is underfunded even though the 5500 for 2022 shows over 120% funded status. She will be separating from employment next year and our plan was to rollover her vested benefits to an IRA. 
 

When others have left, there have been discussions about who should be responsible for the “make-whole” payment if the plan is truly underfunded at the time of separation. Some thoughts have been that the employee should just true up their own balance through an additional deduction from their P&L. That struck me as odd, so I was curious if there were any actual federal guidelines or regulations that would govern a situation like this where vested employees are seeking their benefits from an underfunded plan. 
 

The plan is covered by PBGC. Not sure what other details might be relevant, but thanks in advance for any assistance!

Hi all! I wanted to ask is this possible. If a plan has a lower minimum age/participation than 410(a)(1)(A), for ADP testing, the plan can exclude employees who are covered under the plan's lower minimum requirements but have not met the 410(a)(1)(A) minimums. Could the plan instead choose to exclude only a part of those employees?

Say the plan allows entry at 3 months participation and 21 years old, thereby allowing participation in the plan 9 months before required under 401(a)(1)(A). For 410(b) testing, could the plan exclude only the employees between 3-6 months participation while including those with 6+ months?

I often read about IRS noticed for non-filing with large penalties - folks are instructed to immediately file the voluntary way and pay the nominal penalty.  Then, send the proof of that to IRS for penalty to be waived.  Everyone also says once the DOL sends notice of non-filing there is no way to get any penalty relief (which could easily get into the millions after a few years).  I don't ever see anyone post that they received the DOL letter though.  Does the IRS one always come first?  or, does the DOL send some sort of gentle reminder that allows you to quickly do the voluntary program before their official letter?

I ask because if you look at publicly available enforcement data online there are only a handful of businesses TOTAL each year that have penalties issues above 100k by DOL (like 5-10 total) yet there are millions of businesses that are subject to 5500 filings and MANY that are unaware of filing requirements for various reasons so have multiple years of non filing and are none the wiser.

1) do notices always come from IRS first?

2) Are the large penalties really only assessed if someone ignores letters that give them the chance to do the voluntary program?  

3) Is there a reason every posting on here about non filing penalties references IRS notices as the ones they are getting and not DOL?  

4) If DOL did an audit of a small plan and discovered 6 years of non filing, would they really assess millions in penalties?  I ask because, while this is what they say they can do in documents, the metrics on their own enforcement site show this is not what is actually occuring.  Most non filer penalties it shows are the 5-15k range.  And, even those are not large in number,

Hi

CB plan excludes non-owner HCEs.

Joe has been an employee/participant for the past 3 years and getting CB pay credit.

He becomes an HCE for 2023 under lookback rules.

This means, for 2023, Joe does not get a pay credit, correct?

Top heavy provided under DC plan.

Thanks