Suppose a plan that is participant directed merely adds another mutual fund as available. Doesn't change any of the alternatives already available. Is there a 30 day advance notice requirement before the new mutual fund can be available? 

Its January, 2023 and we realized that there was a minor mistake on the 2018 5500-S/F filing.  The client would like to file an amended 5500-S/F.  EFAST will only allow back to 2020. Can we still file an amended return for 2018 on a 2020 form, or is there no way to file an amended return at this late date?

Thank you

I've been looking at the various options for administration and document software or subscription service.  It seems the only options are:

ASC

ftWilliam

Datair

FIS Relius

Are there any others?  

Thank you, 

Listening to a presentation today on SECURE 2.0 and I left with the impression that this is literally impossible to implement.  Anyone else?

Between Roth as catch-ups, match as Roth, mandatory auto enrollment (with Auto Increase to boot), 37 new distribution options that you can only take once every 3 years.

Sure I'm exaggerating but only a little.  I just can't see implementing this stuff with a small service business that has 25 employees.

I am have been tasked with setting up a NQDC plan for a few key executives at our small company and it has my head spinning a bit.

Basically the owners of the company want to set aside an annual discretionary amount for a few key employees.  The contribution would be tied to employee and company performance.  The amount is intended to be a SERP (no employee deferrals)  and become available after the employee retires. Most of the target employees are 10-15 years away from retirement.

We are looking at the standard clauses providing for acceleration in the event of death, disability, change in control.  Also provision regarding non payment for termination for cause or going to work for a competitor.

I will admit I am getting somewhat confused  regarding the difference between vesting and triggering event.  I have talked with a couple of folks who state that it is normal for employees to vest over a 5-10 year period.  For example can 50 year old employee have a 5 year vesting schedule at 20% per year but the plan specify that payment is not made until they reach normal retirment age?

My lack of clarity of over the vesting / triggering question leads me down the path of the what is the correct reporting and payment regarding payroll / FICA.   I have some done some research and want to make sure we handle any issues regarding the special timing rule for FICA correctly.

What the owners have in mind is to make these annual discretionary contributions, perhaps tie a return rate on the contributions to the S&P500, and pay the employee out either in a lump sum or in 3 years after retirement.  The funds would be available at the later of age 65 or a separation from service (some employees may work until 67).

What I think I know so far:

- This would be a defined contribution SERP plan.

- It would be a non account balance plan.

- Distributions from the plan should be reported on a W2 and are subject to income tax when paid

- If FICA is not paid according to the special timing rule, then FICA would would also be owed at the time of distribution under the general timing rule.  FICA would be paid by both the employee and employer.

What I am confused about and seeking guidance

- The difference between vesting and triggering 

- When would the FICA tax be due? Does the special timing rule apply?

- If the special timing rule applies, how is the amount determined?

- What am I not thinking about that I should be?

I have a client who is starting to grow through acquisitions.  Client sponsors a SH 401k. They have purchased a Company (Stock purchase not Asset). New firm has a SIMPLE. I know there are transition rules that allow this arrangement to continue through the end of 2023.  They are about to complete another acquisition (or more) as Asset purchases. The target has a 401k and they want to allow that new staff to join when acquired.  I believe the SIMPLE has to continue and that staff should not be eligible/contribute to 401k

If they amend the current Plan to recognize the new group(s), don't they lose the 410b6c exclusion that allowed the first acquisition to complete the SIMPLE for 2023? Can we amend to only allow the asset purchases to enter the Plan early? Any guidance is appreciated!

I'm trying to search this topic on-line and not finding much.  Don't deposits coming in from a Real Estate LLC investment count as contributions in a 401(k) plan?  If not, how would they be identified as?

Can anyone comment on how long the IRS has been taking to issue plan termination favorable determination letters following submission of a 5310 in the past few years? Are ESOPs taking longer? 

TIA!

Which SECURE 2022 changes are in effect now?

Assume a § 401(a) plan with a § 401(k) arrangement for elective deferrals (non-Roth and Roth), but no matching or nonelective contribution.

Assume the plan has no automatic-contribution arrangement, and no auto-escalation provision.

Assume the plan’s year began January 1, 2023.

Assume the plan’s sponsor will amend and restate the documents within the remedial-amendment period.

Which SECURE 2022 changes now are mandated as a tax-qualification condition?

Which SECURE 2022 changes are permitted?

Let’s use our BenefitsLink community to see that we have a thorough list.

Remember, even if there’s a long delay about plan documents, we operate the plans now.

Without providing too much detail as this is an ongoing review, what options would a plan administrator have if it were found that  loan from 2020 should have been distributed  as a covid hardship withdrawal? Plan does not allow for multiple loans at one time however a participant was somehow able to take about two loans less than 10 days apart. 

somehow the participant had two active loans that went delinquent as not enough money was coming out of paycheck to cover both. 

the first was a loan and the second should have been a covid hardship as it had to be done over the phone. Our participant tried fixing the issue and has since learned the second “loan” would be considered a hardship withdrawal and will need to amend their taxes. 

If we find this was a systems error on the plan side and it was not done correctly, would this hold up that the record keeper did not follow our plan and we should ask  to recoup some of the fees and penalties for this participant?

thank you 

I had this question posed to me the other day. For the new tax credits for 2023, can we start a new plan even though we already have a 401(k) plan. Freeze the existing plan and merge into the new plan but yet take advantage of the new credits including the $1,000 credit for matching. This is a small 6 person plan.

When considering spinoffs and plan mergers, what would be considered the date of establishment for the plan that is spun off or for plans that merge.  Would it be the establishment date of the original plan?  Would these plans be considered new for purposes of the new auto enrollment requirement?

Hi

Looking at a possible takeover. This is a question on what is used for offset calculations. I have not done of these in 20+ years.

DB is 50% of pay offset by 26.25% of TWB, fractional

DC has 401k+PS+NESH (mandatory 3%)

What is used for offset?

Thank you

How are folks interpreting this section?

I recognize it is optional, but because its effective now, there seems to me a lot of questions about it. 

Let's start with a basic 401(k) plan, that has a basic safe harbor match provision. 

There are two options coming up - 

1. The employer would make a blanket decision to have the safe harbor contributions as Roth. Can this be a yearly election? What if it's just the annual discretionary employer contribution (profit sharing) does it have to be in the plan document that the employer contributions for year 20XX will be designated Roth Contributions? 
2. Each individual participant would elect if they wanted the SH contribution made as Roth or not. 

For item 2- I'm not seeing anything in section 604 where the the participants get to elect one way or the other. Plus plans can already accomplish pretty much the same thing if they allow for in-plan Roth conversions. 

I think #1 is how I am interpreting 604, which will be useful for plans that have an auto-enroll feature where the default enrollment is a Roth deferral, so any match will also be Roth. 

I can see the plan issuing 1099-R at year end for the amounts of the Roth contributions that weren't Roth deferrals. 

What say all of you? 

Here’s the situation (with some facts adjusted slightly to protect my client’s and others’ privacy):

About four weeks after a 78-year-old participant’s death, the plan’s administrator receives a document the sender presents as the participant’s beneficiary designation. It is dated a few days before the participant’s death.

Nothing about the form is witnessed, by a notary or anyone else. But the employer has no record that its former employee ever had a spouse (or any child or other dependent), and the obituary mentions no spouse or former spouse and no child.

The employer/administrator worries that the ostensible beneficiary-designation form might not be the participant’s act.

Here’s the difficulty: Because the participant retired 16 years ago, the employer discarded records that might have showed its former employee’s handwriting. The retiree’s request, a few years ago, for automated minimum-distribution payments was processed through the plan’s website. The recordkeeper too has nothing that shows the participant’s handwriting.

No one now working for the employer knows anything about the retiree beyond what’s in a computer system record from when she retired. (The employer has tens of thousands of employees, and many retirees.)

What information would you want to form a discretionary finding about whether the form submitted as the participant’s beneficiary designation likely is the participant’s act?

What information might suggest to you that the ostensible beneficiary designation is not genuine?

My understanding is that non-ALEs offering an ICHRA are supposed to file 1094-B and 1095-Bs.

Other than the "because it's the law" and "there could be substantial penalties if your failure is discovered" is any real purpose served by such filings?

Thanks

Company B is merging into Company A ( controlled group issue and surviving plan).

Company B's definition of disability - determined by a licensed physician

Company A ( the surviving plan) does not require physician approval. The document states The Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months. The permanence and degree of such impairment must be supported by medical evidence.  

Company A wants to use the Social Security Administration as the determination for disability. Is there a protected benefit issue here? Can the plan change licensed physician to Social Security and not have any protected benefit issue?

Plan sponsor failed to implement a request to reduce employee deferral withholdings.   Is there a basis for issuing a corrective distribution to the participant or must that be corrected through payroll with the excess amounts that were remitted being moved to the forfeiture account?

My understanding is the latter, but hoping for guidance to the contrary.

Thank you.

Can an employer nonelective contribution for 2022 be made in January, 2023 for a calendar year nongovernmental 457(b) plan?  The contribution would be made to the account of a participant who contributed less than the applicable deferral limit in 2022.  

I enrolled and paid for COBRA coverage starting 10/1/2022 from Company A which I was an employee.  I voluntarily terminated Company A in September 2022.  Company B acquired Company A in 2022 in an all stock sale and continues operations offering remaining employees 2023 benefits from Company B.

Despite several written communications to the merged Company proactive seeking revised COBRA coverage elections from Company B health plan(s) before 1/1/2023 (and prior to employee annual enrollment), the merged Company failed to provide notice of continuation options and payment arrangements for annual elections to continue COBRA coverage prior to loss of coverage on 1/1/2023.  

Any suggestions for how to retain legal assistance or rights to address health related costs, damages, and any possible non-compliance liability due to loss of coverage?  The plan administrator is now behaving as if I did not make payment by new period.  No notice of 2023 enrollment information about plan options or payment arrangements were provided before coverage lapsed on 12/31/2022.