Does anyone have experience drafting Pension Order for Washington Metro Area Transit Authority Plans (WMATA)?

I think I know the answer to this but please can someone confirm?  I have a 403(b) plan funded exclusively by participant contributions.  Under universal availability, EVERYONE is eligible but, since there is no match and there is a separate employer-funded plan, we have a large number of eligible employees who elect not to contribute.  We report them as participants on the 5500 but without balances.   We are a large plan and there is no question that we need an annual audit.

New for the 2023 forms, the audit requirement depends on the number of participants with account balances.  "Both Form 5500 and Form 5500-SF, and their instructions, are revised to reflect a change in the methodology for counting the number of participants used to determine when a defined contribution pension plan may file as a small plan, including determining eligibility for the conditional waiver of the independent qualified public accountant (IQPA) audit requirement. Beginning with 2023 plan year filings, a defined contribution pension plan counts participants with account balances at the beginning of the plan year, except for new plans which use the number of participants with account balances at the end of the plan year."  

But the definition of Active Participant remains the same as previous years--Active participants (i.e., any individuals who are currently in employment covered by the plan and who are earning or retaining credited service under the plan). This includes any individuals who are eligible to elect to have the employer make payments under a Code section 401(k) qualified cash or deferred arrangement. Active participants also include any nonvested individuals who are earning or retaining credited service under the plan. This does not include (a) nonvested former employees who have incurred the break in service period specified in the plan or (b) former employees who have received a “cash-out” distribution or deemed distribution of their entire nonforfeitable accrued benefit.  So as long as someone is eligible to contribute we count them in this section, whether they contribute or not--right?  

Just checking to make sure I am not losing it--Secure 2.0 is testing my patience.

An over age 21 employee is hired 3/1/23 and works between 501-999 hours in the 12 months after her initial date of hire.  She then works between 501-999 in calendar year 2024.  

Lets say she reached 501 hours on June 1, 2024.  Am I correct then that her LTPT plan entry date is 1/1/25 and not 12/1/24 (6 months later) since not only is the LTPT eligibility period 12 months but if she goes over 1000 hours later in 2024, she would be eligible to enter as a "regular" participant on 1/1/25 and would not classify as a LTPT?

Thank you

Hi Folks,

I believe I have a fairly unique and messy situation that I’m hoping to get opinions on. An annual compliance review was completed by a TPA and they provided a profit sharing calculation for an ineligible participant (who was also terminated). The plan sponsor funded the contribution to said participant and triggered a residual distribution. The transaction was sent to the TPA for review and was approved, even though the participant should (1.) Not have been eligible to receive a contribution and (2.) Should not have been allowed to take a distribution of these funds.

The plan sponsor has decided that it’s going to be less of a hassle for them to allow this individual to keep the funds as a “bonus” (for a multitude of reasons that don’t need to be explained here). The individual is not an HCE but I still have concerns.

In my opinion, the plan would still need to be made whole because the assets that went into the plan never should have been segregated from the plan and now, the sponsor is looking at having to fund double the original amount to make the plan whole.

Here is my question: considering that the TPA provided an online approval of the distribution (to my knowledge, the sponsor was not prompted to provide an online approval), at which point could a TPA be held responsible for a loss like this?

Ultimately, I know that the sponsor of the plan is responsible for operating the plan but we are in this business because we are the subject expert matters and plan sponsors should be able to rely on their third party providers to help them avoid costly mistakes like this, especially when the third party overlooks important details such as participant eligibility when providing profit sharing calculations.

So, plan allows rollovers into the plan by participants only. Employee rolled money into the plan 2 weeks before entry date.

Operational violation. I would almost swear I saw something that essentially said, "don't worry about it" but I can't find anything like that. Maybe it was just a pleasant daydream...

This is an audited plan. If it weren't, I'd be very inclined to ignore it. Although I think it could be corrected via a retroactive corrective amendment, the plan sponsor obviously doesn't want to go that route.

Am I missing an acceptable alternative to the two choices above?

I am looking to start marketing to local advisors and CPA’s as a referral source. Would anyone be willing to share their marketing materials with me? I am looking for some inspiration. 
 

Thanks!! 

I am having trouble finding guidance on this and hoping someone can point me in the right direction.

Participant took a $100,000 CARES Act distribution in 2020. Proceeds came from:

• Roth deferral = $50,000
• Pretax deferral = $25,000
• Match = $25,000

Participant makes a repayment of $100,000 in 2023. In to what sources are the funds deposited at the time of repayment? Roth = $50,000, Pretax = $25,000, Match = $25,000? Or Roth Rollover $50,000, Pretax Rollover $50,000? Some other method?

Thank you

Good day, I worked for a company that participated in ESOP and I qualified to receive distributions.  My employment was terminated during COVID.  From how I understood the program to work, is after 5 years, I would begin to receive distributions.  However, it had not been 5 years since my employment was terminated and last year November I got a distribution form.  I took the gamble and completed the form and sent it back with banking information.  And in late December I received a deposit.  The deposit was about 33% of the account’s value.  My question is what that a one time thing, did I forfeit future distributions?  Or since I only received a portion of the balance, will I be able to participate in future distributions?

I have a 12/31/2024 Plan that want to amend the safe Harbor 3% non-elective contribution out of their plan for the plan year being 1/1/2024,  can they amend the plan now to eliminate the  3% safe harbor contribution out of the plan for 2024?

Doing a proposal:

I have this plan... all of the EEs are HCEs except for a couple of NHCEs that don't work more than 1,000 hours (at this point)

I put the owner in group 1, the other HCEs in group 2 and the NHCEs  in group 3.  (Remember, Group 3 typically don't work 1000 hours so they aren't eligible for the NEC)
I made the owner max out, gave the other HCEs nothing and as I said, the NHCEs just aren't eligible (at this time).   Ran the general test and it passed.  

Great huh.... or am I missing something?  

If I'm not missing anything then all I need to worry about in the future is if an NHCE works more than 1,000 hours they need to get a contribution

Thanks

Does anyone know if Datair has the capability of running a report that would include book of business demographics such as, Total Assets for active plans, plan type, participant counts and status of plan?

I'm reviewing an HRA plan document that includes both active employees and retirees as participants.   ACA compliance is through integration with employer's group health plan.   At age 65, retiree group is no longer eligible to participate in employer's group health plan.   No new employer contributions are made to HRA  at age 65 and up, but these retirees can use rolled over account balance to obtain reimbursement for medical expenses and premiums.   Employer is reimbursing retirees for Medicare Advantage premiums.  While reimbursement of premiums for individual market coverage is clearly prohibited in terms of ACA integration rules (Notice 2015-87), is reimbursement of Medicare Advantage premiums considered individual coverage under existing guidance?  Is there any way to argue that this is a permissible arrangement for ACA compliance purposes?  Or any way to argue that the retiree reimbursement provisions can be treated as a separate group health plan thereby utlizing the retiree-only exemption, even though the retirees are referenced in the existing plan and SPD that relies upon group health plan integration?   (Employer has a wrap plan for ERISA reporting/disclosure purposes).  Given the severity of ACA penalties, we're looking for any helpful guidance insight on this issue.  Thanks.

We have a 401k client whose plan funds are in brokerage accounts (each participant has their own - so no pooled);  We do admin. work only for this plan and bill the Employer - not the plan.  Are we responsible for providing this notice or does the brokerage account provider need to disclose fees, etc on such a notice?  Thanks!

Looking for some help on cross tax plan correction.  For one of the terminating plan the benefit was paid to estate however looks like there was a named beneficiary (spouse).  The check was cut to the deceased estate in 2023 and the spouse reached out in Feb 2024, the spouse wants to rollover the funds to an IRA and wants the account to be made whole.  Since we are in April is there any exceptional rules that we can use to have the tax corrected?  the taxes withheld is $80000. 

Anyone aware of any DOL or IRS enforcement actions concerning employee assistance programs?  Specifically instances in which the DOL or IRS found that an EAP was not an excepted benefit?  

Title says it all... the first year of the plan the only employee with 1,000 hours is the owner.  File a form 5500-EZ and then the following year switch to a 5500-SF?

If a plan’s administrator—following a reasonable record-retention (and destruction) plan—no longer has proof (beyond a presumption of regularity) that a distribution was paid, but the claimant lacks evidence that no distribution was paid, how do these situations resolve?

If the Employee Benefits Security Administration opens an inquiry, what does EBSA ask for? And if the response is no records remain, do they close the file?

Do any of these claimants bring a lawsuit?

Something else?

I know a profit-sharing contribution is discretionary and is not required to be funded.

Have a client with a 401(k) Profit Sharing Plan where they forgot to fund the profit-sharing contribution for the plan year ended 12/31/2022.

They have funded a 10% of salary profit sharing contribution for the past 20 years every year and would like to make up the missed contribution now. Is there anything under voluntary correction or self-correction that would allow the contribution to be funded now but allocated based on 2022 data? The problem with just funding double the normal contribution now is that there were about 10 participants who terminated employment in 2022 and were entitled to a profit-sharing contribution then. They would not receive any contribution now if it had to be based on 2023-year salary.

Thanks.

I was wondering if this a good idea to buy because i am retired goal is 2035 i started wok in 2017 i want see if i can retired before that.