Is there any guidance on the difference between a true change in residence and extended travel (i.e., length of time)? 

In February of this year Employee submitted an election change form to remove spouse from health coverage due to spouse's move out of the country. 6 weeks later Employee requested to add spouse back to health coverage due to spouse's move back into the US. Employee has now requested to remove spouse from health coverage again due to spouse's move out of the country again. The Employer thinks the spouse travels back and forth to the couple's home country a few times a year for 6 weeks at a time.  Are these qualifying life events? 

Should a plan allow a loan after the participant defaulted on an earlier loan but later fully repaid the loan?

An individual-account (defined-contribution) retirement plan allows participant loans.

These loans are meant to follow Internal Revenue Code § 72(p) so making a loan is not then treated as a distribution.

The plan has no nonelective or matching contributions, only elective deferrals.

The plan sponsor’s general policy in setting plan provisions is to treat participants as adults who make one’s choices about what to do with one’s money. For example, the plan allows every kind of early-out distribution that can be allowed without tax-disqualifying the plan.

The plan’s current loan policy precludes another loan if the participant defaulted on an earlier loan. That restriction applies even if the participant fully repaid the loan after the default.

The plan sponsor is considering revising the policy to allow a participant to take another loan if the participant has fully repaid the defaulted loan.

Nothing in the plan’s procedure, whether current or proposed, for processing participant loans calls for the plan’s sponsor/administrator to do anything on a particular request. (A loan never requires a spouse’s consent.) Rather, the recordkeeper routinely processes approvals and denials of loans on nondiscretionary terms.

BenefitsLink neighbors, what do you think? Is it a good idea to allow a participant to take another loan if the participant has fully repaid the defaulted loan? Or if it is a bad or troublesome idea, why?

I have a client who is a partnership of corporations.  One of the owners of one of the corporations participates in the plan, the owners do not. The partnership lost a contract and as such all of his employees with the exception of the owners of the corporations are being terminated (it is a condition of their employment when the contract is lost they are terminated).  If it matters most of the participants are HCEs but only 1 is an owner. They wants to terminate the plan but rely on a 3% SHNEC for to pass 401(k) testing.   All of the employees have been notified and they will be let go on a certain date (say June 30.. I am not sure when but it will be well before the end of the year) with the exception of the owners who are employed by their respective corporations.  The partnership will continue for some time (well past the end of the year if not several years) as they are still being paid for work they have already done.  Can they terminate the plan before the end of the year but after all  of the employees have been terminated with the exception of the owners and still rely on the 3% SHNEC?

It is not clear to me whether DFVCP becomes unavailable for all years once a DOL notice is received for any year.  The FAQs provide that the DFVCP filing must be made "prior to the date on which the administrator is notified in writing by the Department of Labor (Department) of a failure to file a timely annual report under Title I of the Employee Retirement Security Act of 1974 (ERISA)."  But does that mean notice of a failure for one year would preclude a DFVCP filing for another year for which notice of a failure to file has not been received?  Has anyone had any experience with this issue?

[I know the answer is it SHOULDN'T be done, but I'm looking for CAN.]

Got a pooled 401k plan that is transitioning to individual accounts.  There are enough people such SDBAs for all of them would be horribly inefficient, so they decided to go with a fund platform.  However, the FA just told me that they will do SDBAs for the owners.  This immediately set off all the alarm bells.

Of course it's a bad idea, but what is the latest and greatest about how it can be done with some degree of confidence that it will pass the sniff test?  I'm thinking:

1. No minimums allowed to open one.  Note sure about minimums on any particular investment.
2. All participants must be given the option to do so.  We've got a few plans that have had this set up for years (and keep resisting change), and on those we already have a boilerplate participant election form.
3. 404a5 fee disclosure notice.

I was thinking about a set fee for the SDBAs each year to represent the additional time spent reconciling them; I'm not sure I could easily get the SDBAs to send me the fee from the account each year, but I think would be OK.

Ideally, there's some kind of citation that I can use to argue against this, but failing that, I at least want to put this on as solid ground as possible.  Any thoughts?  Thanks.

I'm sure Nike has this trademarked or something, but it would be fun to have this on our client engagement letters - the endless amounts of time we spend because the client is trying to "get around" something they have to do, or won't do what we tell them to, etc., etc. - wouldn't it be great if we could contractually point to "JUST DO IT!"

Just one of those pleasant daydreams...

Can a plan be changed mid-year to have the safe harbor match allocated/calculated on a payroll basis versus what their plan currently has, the last day of the plan year?  I have a client that does not want to true-up the sh match at year end.

We have a terminating Cash Balance Plan that has excess assets compared to the benefits owed.

I just want to make sure I'm reading the Plan Document correctly.  It is allowed to allocate the overage to the participants, in ratio to their balance at the time of termination?  So instead of reverting the money back to the Employer (which would cause taxation), we can pay it all out as long as the document allows?

I'm 95% sure, I just want to make sure I'm not crazy

Due to some issues with the plan sponsor, we are just now working on the 2023 contributions and allocations.  We discovered that the 2022 Employer Safe Harbor contribution was never deposited to the plan.  What options are available to fix this?

Thanks.

Is there any provision in the Internal Revenue Code that prohibits voluntary, after-tax contributions to a DB plan?  Put differently, the plan requires mandatory employee contributions based on age of entry.  I'm asking if employees could voluntarily contribute additional after-tax amounts to accounts under the plan. Any insight would be appreciated.

Does this hold true for DB plans... all plans?

With Section 315, Reform of family attribution rule. 

Question 1: Can the client set up retirement plans under Property Management Company only and disregard Dad's Dental Practice with 20 employees?

Question 2: If the answer is No to Question One, can the client allocate 100% to Eldest Son and have Mom and Eldest Son receive payroll under Property Management Company and still disregard Dad's Dental Practice with 20 employees?

Question 3: If the answer is NO to both 1 and 2, can the Dad change ownership to 0% from both Dad's Dental Practice and Property Management (Second Son will own 100% of Dad's Dental Practice), Mom receives 5% ownership and Eldest Son receives 95% ownership and set up the retirement plans under Property Management only. Currently, there is no retirement plan in place for Second Son Dental Practice.

Participant is applying for a hardship - was in a FEMA county deemed a disaster. Seeking a hardship to cover the cost for repairs to a primary residence.

1.  The participant financed the initial work on the exterior of the house.

2. Now she needs to pay for the drains, repair to the concreate floor and drywalling. - This cost is $14,908

The question is, can the participant take a Hardship for the cost of the initial repair along with the second round of repairs?  The first part was  financed on a credit card with an outrageous interest rate. participant wants to combine the two costs and take on e Hardship. (1) pay off credit card for the initial work and (2) pay the contractor for the second round of work.

thanks

Teresa

Hi - 

Have an asset sale where the seller will terminate their FSA plan on 5/1 and open up the buyer's existing FSA plan to those seller's former employees.  They will roll the existing FSA balances of the seller's employees to the buyer.   To my understanding, any employee of the seller's who was not on their FSA plan when the deal closes does NOT have new FSA election rights under the buyer's plan (unless a QLE occurs down the road).   Can anyone confirm this is correct?   

And how does COBRA come into play here with FSA? If an employee had unused funds left over in the seller’s plan, could that employee elect COBRA for the FSA plan (to have access to their unused funds ) AND enroll into the buyer's plan as a newly eligible EE?

A company failed to make matching contributions to certain former employees for the 2021 plan year. (Company thought there was an allocation requirement to be employed on last day of plan year, but there was not.) Company made corrective contributions to those former employees. Is it necessary to re-run the ACP test using the new matching contribution data? 

Client is a PC, 2 dentists, 15 employees.  Each dentist has his own plan.

Yes "plan" - that is the way the accountant wanted it.

Employees in separate plan, all 3 plans tested together.

One of the dentists traansfered a portion of his account to a limited partnership that his son handles.

Not getting into prohibited transactions or part-in-interest here, but this owner, DOB 7/7/51 will need to take his 1st RMD at the latest by 4/1/25.

We are attempting to get him to rollover his plan's investment in the limited partnership to an IRA which apparently can be done.

Question is, can he get the investment out of the plan and into an IRA without having to take an RMD.  Once he rolls this out of the plan to his own IRA, it's not an plan issue anymore.

I have a couple of DB plans of sole proprietors, Schedule C.

I know the combination of "compensation" for benefit calculation plus contribution can not exceed the Net Schedule C for the year.

However, I have seen other DB plans for sole proprietors wherin the contriubtion plus "compensation" exceeds theNet Schedule C.

How can this be?

I'm 65.  I was offered a lump sum pension payment of $89,000.  I understand the amount will be recalculated when the new 417e table is released in June 2024.  Should I take the lump sum now or wait till after the new calculations are made in July 2024?

We've been asked to take over a plan that was effective 1/1/2023. Employer got mad at the TPA for reasons unknown, and wants us to do admin for 2023. The 2023 document that was adopted is the document sponsored by the prior TPA.

So - Employer A adopts a plan, effective 1/1/2023. Employer B's employees are allowed to participate in employer A's plan. Here's the problem.

The owners of A also have ownership in B, but NOT sufficient to constitute a Controlled Group. Nor are the businesses an Affiliated Services Group. And although A's plan provides for Multiple Employer Plan provisions, employer B did NOT sign any type of participation agreement/joinder agreement, etc., as required under the MEP provisions in A's plan.

In an ERISApedia webcast re IRS Notice 2023-43, this question came up in the context of a CG/ASG, where the related employer did not adopt the plan. The presenters' opinions were that although 2023-43 does not allow self-correction of failure to initially adopt a plan, because the plan had been adopted by the "employer" under the CG/ASG rules, that this is an operational failure that can be self-corrected.

Although it is a "no harm no foul" type of situation, I feel like extending this treatment to a situation where the employer *(B in this case) is not "related" under the CG/ASG rules may be stretching the point too far. Curious as to any thoughts you may have?

hello, i recently left my job, and i had around $4000 on my 401k account and i also have a loan for $500 that has not being paid yet, will i be able to cash out my 401k after a month?