With the mandate for the new version of the W-4P being just 5 months away, we've encountered a unique issue and I'd like to see what other pension systems are doing.

We currently send out the old format form (Single or Married with number of allowances), but in December when we implement the new format form we'll literally have thousands of old format forms out to members. The IRS has given the computational bridge to enter an old format into the new format, so we can handle that during 2022 and into 2023. But I can't find any guidance for a "grace period" of accepting old forms. I know we'll get old forms signed in 2023 during the transition - I'd sure hate to send forms back to them and default them to the new "single with no adjustments" because they don't have a current form.

But my question to you: How long will you accept an old format form next year? (the ones in member's hands while they deliberate the start date of their pension)

Any other issues you've encountered with the new form mandate?

Hi,

A DB Plan was adopted for 2014. The only participants for 2014 were the owner and 1 employee.  The other 15 employees worked each year less than 1000 hours and were not eligible. In early 2015 this eligible employee terminated and was  0% vested, since did not have 2 years with at least 1000 hrs ( only 2014). 

Question: 1. Would this be a partial plan termination? 

2. If yes, would this one terminated employee become 100 vested?

3. Why should the owner be "penalized" and be forced to make this employee 100% vested just because there were only 2 participant's in the plan (and 1 terminated)?...... The plan is still in existence in 2022, 7 years later, (with the owner still the only participant) and there are no plans to terminate the plan, and calling this a partial termination is quite harsh.

4. What is the ramification if the terminated employee was removed from the plan (since at termination was 0% vested) instead of being kept in the plan and becoming 100%vested?

Thank you very much for any insights.

If a client opts to terminate their Cash Balance Plan prior to the end of '22, due to selling the business, is their a contribution obligation for '22?  Just want to confirm so the client knows what to expect prior to termination.

Thanks in advance!

Curious as to opinions on this - suppose you have pooled plan, annual valuation only, and the client (on extension) doesn't get you data until the last minute. (Naturally, no one else has any such clients...)

I guess you just have to send them late. Only other alternative is to send them out with duplicate of 12/31/2020 statements, with some sort of disclaimer, but I don't much like that option. 

Other alternatives/thoughts? This is preying on my mind, with a lot of folks on extension this year...

Thanks.

I know they don't really exist, however, I have a client that has a "solo 401k)" with Schwab.  He has hired an employee and that employee is now eligible.  Schwab will not allow us to open an account for the employee under the current plan.  They say we can open a company retirement account (CRA) for that money.  When I asked how to transfer the "solo 401k" account over to the CRA I was given a distribution form, well there is no distributable event and they confirmed it would generate a 1099, etc.  Has anyone else run into this situation?  Have any ideas how to solve it?  

We restated the plan on our plan document and I guess we can just keep his "solo 401k" account and combine it with the CRA account for 5500 purposes, just seems like there should be an easier way.

Good afternoon to all,

I have been asked to post the following question, and I do not have any further details concerning the reason for the question.

"Is the definition of plan compensation for a partner (in a partnership) anything other than box 14a on the K-1 if the income comes from real estate income? "

Thank you in advance for any information you can share in this regard.

A single member plan that invests through Merrill Lynch made every effort to liquidate before 12/31/2021 so that the plan can be terminated.   The process started in August of 2021 and everything was rolled into IRAs.   For some reason 14 shares of an investment kept being returned to the account.  $1,900 dollars.  It left and came back and left and came back.  The advisor is saying its a ML back office problem.  He has a documented paper trail.  

I am of the mind to say the plan is terminated as of 12/31/2021.  If an issue arises later then deal with it then.  

Sound good?  Anyone ever have this problem?  

A client is telling me that the form 5500EZ does not need to be filed this year because their assets have dipped below $250,000 (as of 12/31/2021).  Makes me nervous to not file.  Do people skip a year if the plan's assets don't exceed $250,000?  Or is it recommended/you recommend to the client to keep filing?  OR by chance, is an EZ plan required to keep filing once a form was filed (even if assets are less than $250,000 now)?

Would a participant who had the opportunity to make up deferrals due to military service under USERRA result in a prior year 5500 being amended to record the deferral in that plan year?

Stupid question, but I just want to make absolutely sure I'm not missing something - not applicable to 457 plans, right? Gracias.

Plan Sponsor changes its name and its plan's name as of 7/1.  5500 for prior 12/31 has not yet been filed. I'm wondering which is the best set of names to file with - the prior which were in effect as of 12/31, or the current in effect as of signing date?

While I have written thousands of QDROs, I have never run into this issue before, so anyone who might wade in here is welcome. DB church plan participant elected a 100% J&S. This elderly couple then divorced years after benefit commencement. My client is the former spouse joint annuitant for the benefit currently in pay status.

Submitted a QDRO to the plan assigning my client (the AP) 50% of the benefit in pay status and confirming her 100% SB benefit already in place. The plan refused to qualify the order because they claim that per the plan document, as an AP, my client is only entitled to a 50% survivor annuity, notwithstanding the fact she is already a 100% joint annuitant.

The language in the plan document does not directly address an in pay status survivor benefit for a former spouse who is already a joint annuitant. If the plan's interpretation of its document stands, the plan would benefit by divesting a current joint annuitant of their property as already paid for by the participant.

Any thoughts?

What happens if an employee's gross pay for a pay period is insufficient to cover the employee's salary deferrals and they are therefore not deducted in accordance with the employee's election? Is this a plan failure? 

I recognize this would be a rare occurrence, but think it's possible in a scenario where an employee has fixed $$ deductions that take precedence over benefits (i.e., child support, wage garnishments). 

Thanks in advance!

One-person DB plan, adopted in 2022 for 2021.

First contribution deposited in 2022.

Say contribution is > $250,000, file 5500 for 2021?

Say it is less, no 2021 filing needed.

Let's move to 2022:

2022 contribution deposited in 2023, taking net balance over $250,000.  File for 2022, or ultimately file first 5500 for 2023?

The client thought they were a QACA Safe harbor for several years now – BUT they only matched up to 5% .

The formula was 100% up to 3% and then 50% of elective deferrals on the next 2% of compensation. They put in a total of 4% (0.5% more than required for QACA safe harbor) but did not stretch the match up to the required 6%.    The vesting was 100% after 2 years of service.

Since the client matched more than the required 3.5%, do we need to do anything?  

Is the Lifetime Income Disclosure needed for an owner-only 401(k) plan?  I would think (hope) not.  These often involve one broker account and thus the disclosure will not generate from an institutional record keeper.

Tom

For ERISA Plans I know that the spouse has to be the designated primary beneficiary and they spouse has to acknowledge that they are not the primary beneficiary of the Plan if someone, other than the spouse is designated. Is that the same requirement for Non-ERISA plans? Are Non-ERISA 403b plans subject to the Retirement Equity Act?

Curious to know what others are doing. In Part I, item 2, field b of the Form 5500 Schedule C, do you use service code 10 for non-3(16) third party administrators handling such things as preparation of 5500, 1099R, 8955-SSA and other governmental forms; compliance testing; providing annual participant notices; etc.? If not, what code do you use?

Hello, 

Is there any guidance regarding whether a plan may impose a post-deductible flat dollar copayment for medical coverage?  The flat dollar approach is apparently allowed for pharmacy coverage only. If that is true, then does the flat-dollar element for medical services render the plan as being no longer a qualified HDHP?  If so, can anyone provide guidance to support either way. Thank you.

Company establishes Profit Sharing Plan (not a 401k) in 2020. 90 participants beginning of year. Makes no contribution for 2020, so 0 assets. No 5500 filed.

As of 1/1/21, there are now 130 participants. No contribution to be made for 2021, so still 0 Assets. If they were to file a 5500, they are subject to audit. Doesn't want to file a 5500 since there are no assets.

Comments? What would the auditor audit?