Have a client that missed making their Safe Harbor Contribution.  Going to make the payment now, plus lost interest.  The question is what interest rate should be used?  Where the money is invested calculates the actual rate of return, and from the due date to today most of the participants have actually lost money (even though the Plan lost during this time, I don't believe we can't avoid making interest).

Therefore is it best to use the VFCP calculator to calculate interest? 

Thanks!

Will the IRS issue a private letter ruling with respect to the termination and final distribution of VEBA assets or is this a no ruling area.  Thanks.

A client has maintained a SOLO K for a few years - with just him and spouse participating.  There is NO age/service requirement - now they hired their minor kids.  Since it is still family - is there any requirement to change to a regular 401k at this point?  There are NO no-family employees.  

Just some clarification please...   If an owner participant dies before the year end but after the RBD (I was told he is way past 72), the RMD should have been taken before 12/31... correct?

Thanks

Can the initial 72(t) SEPP payment be prorated?

Or regardless (when during the year) it's taken is the IRA owner required to distribute what amounts to the full year payment?

What guidance has the IRS issued?

All assistance is appreciated

Anyone have the new table available in Excel?  

Good afternoon!  I know people can have Life Insurance in a Defined Contribution Plan.  Is it possible to have it in a Cash Balance Plan as well?  I just wanted to confirm.

Thanks in advance!

I read a bunch of cases a while back, but don’t recall seeing this addressed:

What is the legal authority that allows an Alternate Payee to immediately take a full disbursement of their portion of the participant's benefit assigned to them through a QDRO, when the participant’s benefit is not in pay status, the participant has not attained the earliest retirement age, and the participant does not otherwise qualify to take a withdrawal from the plan pursuant to the plan's rules. 
 

What are acceptable methods of self-correction if an employer missed setting up loan repayments? A participant was supposed to start getting loan deductions taken in September 2021 but the employer's payroll area missed setting it up. The participant can't pay a lump sum to catch up. Is the only option to amortize over the remaining period? Can they chalk it up to an administrative error and change the start date?

A proposed QDRO I just received states, "This Order *** is made pursuant to the domestic relations laws of the State of [redacted]."

Does this phrasing satisfy the requirement of § 1056(d)(3)(B)(ii)(II) that the domestic relations order "is made pursuant to a State domestic relations law" or does the specific state law/statute need to be identified in the order in order to be qualified by the Plan Administrator?

A PSP covering only a 100% owner has been filing the 5500-EZ for years.  It was recently revealed that his son was employed several years ago and met the plan's eligibility requirements but the owner kept filing the EZ.  The son is still employed but he's not owed any allocations since there haven't been any contributions since he was 'hired'.  What would be the recommended course of action - amend the returns to SFs?  DFVC?  Ignore and just have the owner file the correct form going forward? 

Good morning to all,

A participant in one of our plans received a hardship distribution in March of 2019 from her 401(k) account.  At that time, she was required to "sit out" from making subsequent deferrals for 6 months.  The question is, whose responsibility was it to resume her deferrals?  Is the burden on the participant to notify HR that she would like to start back up, or is the burden on the HR department to contact the participant and ask her if she would like to resume deferrals?  Or even possibly, was HR supposed to automatically resume her deferrals after 6 months based on prior instructions from the participant given prior to the hardship distribution?

In any event, she has not made deferrals since that hardship distribution, a little over 2 years ago, and is now complaining to the new financial director that her deferrals should never have been stopped because "she never signed a waiver asking not to participate".  We are trying to help figure out whether any back deferrals, match, and interest are due to her from the date 6 months after the hardship withdrawal was made through today.

I have researched this various places and cannot find this particular question addressed.

Thank you,

ldr

Can a cash balance plan have a full calendar year plan (i.e., effective date of 1/1) if the entity only came into existence in the middle of the year?

Are prototype documents allowed to use language that effectively allows for each participant to constitute their allocation group for purposes of a profit sharing allocation?  Effectively the employer is allowed to choose the amount each participant gets in terms of a profit sharing allocation... assuming you are passing top heavy and whatever testing is necessary (general test/cross test).  I have only administered volume submitter and individually designed plans. I have read through 2 or 3 adoption agreements and have not seen anything like this in a prototype document.  

The IRS letter suggested DFVC is an option if the DFVC requirements are met.  The only requirement I could find is that the plan has not been contacted by the DOL about the late filing.  Which they have not, but the IRS has contacted them.

Can they use the DFVC then in this instance?

Thank you

I have a client who is hoping their audit requirement is eliminated for 2021.  The active/eligible participants plus inactive with a plan balance as of 1/1/2021 are 98.  A fixed match true-up was calculated and funded in 2021 for those eligible in 2020.  Included in the true-up were 3 participants who terminated in 2020 and had no plan balance as of 1/1/2021.  So their plan balance was zero on 1/1/2021, then the small match true-up was deposited in mid-2021 and then they had that paid out as well.  So they had no plan balance as of 1/1/2021 unless you count their true-up A/R.  If we count them as participants with a balance as of 1/1/2021, then the count is 101.  The plan reports on the 5500 and audit on a cash basis.  

I suspect everyone will say get the audit to be sure and that is what I wil tell them.  I did look at 1/1/2022 as well which is clearly 98 and so 2021 will be the last year (for now) which I guess is the silver lining.

Just curious about comments at this point.  I will tell the client to get the audit.

Tom

We received a Medical Support Order in the form found on the HHS website:  https://www.acf.hhs.gov/css/form/national-medical-support-notice-forms-instructions

1. The form seems a bit lacking to me.  The rules for QMSOs require the Order to include, among other things, (1) a reasonable description of the type of coverage to be provided, and (2) the period to which such order applies.  This Order doesn't seem to do either -- they checked the box for "medical" coverage, but we have several options, and I don't see a place to put down the period of coverage anywhere.  That said, it is a model document from the Federal government, so has it already been deemed sufficient?
2. Since we have several medical options, do we just contact the participant and tell him he has to pick an option that provides for dependent coverage?
3. If the participant signs up, and he is married, can he also sign up his spouse?  I would think this counts as an open enrollment window for him and the dependent, but not for the spouse.
4. If the participant is on his spouse's insurance, can he just add the dependent there rather than having to enter our plan (I assume this would require a different QMSO relating to the spouse's plan)?

One of my clients is adding Union employees to the company.  It will take them over the 120 count.  Was wondering is there a way to set a separate plan to avoid this.  Although the same owner will own the company although he doesn't participate, still a controlled group because of it, so I'm thinking no but am I missing a way to avoid this?  BTW it's a plain vanilla 401(k) plan.

I'm just not feeling comfortable about this one and would appreciate other's thoughts.

Company M is an LLC taxed as partnership.  Two owners, 50/50. Only one of the owners (Owner A) is actively working for Company M, the other owner works for a different company.  Owner A also owns 91% of Company K.  I'm told Company K has no employees.  Company M only has one employee (Owner A), all others are independent contractors receiving 1099's.  It is a software development firm and the website shows 12 people as "employees"  (supposedly all but the owner are 1099 contractors).  Owner A also has a owner-only 401(k) plan with an investment firm and wants to open a cash balance plan with us. 

Also found out that Owner A established residence in NY and very recently became a US citizen.  He has since returned to France and wants to use his address in France for the plan document and 5500.

It's been difficult to get details on this, so my comfort level is low.  Other questions I should be asking or information I should request?

Any help is appreciated!

Company A has a standard 401(k) no allocation restrictions for match - passes coverage

Company A purchases Company B ( stock purchase) will be a controlled group. Company B has a Safe Harbor 401(k) and passed coverage before the purchase.

Intent is to maintain two separate plans. Company B may move to non Safe Harbor.

Since all employees of the controlled group are deemed employees of Company A, am I correct is saying coverage testing must be satisfied for each. However since one is  safe harbor and one is not, cannot aggregate.  

Company A HCE 56 Company B HCE 6

Company A NHCE 343 Company B NHCE 1043

Based on these number Company A will fail Coverage.

If after the transition period Company B is amended to a standard 401(k) with the same eligibility and match as Company A, is the coverage testing issue a moot point as long as each passes coverage separately/

This hurts my head!!