Large welfare plan client submitted DFVCP payment in 2020 but has never submitted a filing (we do not have a service preparation contract with this client). The group likely crossed 100 participant threshold in 2013 or 2014, but not 100% sure without doing more research. What is their best course of action in this situation? Should they reach out to an ERISA attorney to assist?

Thank you in advance! 

A participant who also happens to be a Plan Trustee took out a plan loan a couple of years ago.  The participant terminated in 2020, but was not removed as a Trustee until 2022.  The documents specifically provide that a party in interest under Erisa 3(14) who terminates employment with an outstanding loan will be treated as an employee whos employment has not terminated and for any other applicants, the loans become due and payable at termination.  Our question is this.   At the point this former employee was removed as a Trustee is that loan due and payable?

Thank you

Our plan currently has a discretionary true-up match with no allocation service requirements.  Is it ok to amend the plan for the current plan year to add a last day of employment rule or do we have to wait until next year? We want to exclude terminated employees from receiving the true-up match for 2022, if the company decides to make one.  Thanks.

Any thoughts on whether individual annuity contracts distributed when a 403(b) plan terminates must limit distributions to one of the events that would permit a distribution from a 403(b) plan (e.g., termination of employment)?

On the one hand, Rev. Rul. 2020-23 indicates that "The distributed ICA is maintained by the custodian as a § 403(b)(7) custodial account that adheres to the requirements of § 403(b) in effect at the time of the distribution of the ICA until amounts are actually paid to the participant or beneficiary."  (While this ruling relates only to a plan funded with custodial accounts, not one funded exclusively by annuities, presumably similar rules would apply under Rev. Rul. 2011-7 relating to plans funded by annuities.) This might be interpreted to suggest that the individual contract must adhere to the distribution requirements of a 403(b) plan, e.g., distributions are available only upon certain events including termination of employment.

However, I see two arguments against this interpretation.  First, the participant is entitled to take a cash distribution upon termination of a 403(b) plan.  Thus, allowing a participant to take a cash distribution from the annuity contract after termination of the plan would appear to adhere to the requirements of § 403(b).

Second, the revenue ruling provides that "the employer has no material retained rights under the distributed ICA after it has been distributed."  If the participant's right to a distribution is contingent on the employer certifying that the participant has terminated employment, that would seem to be a material retained right.

We are currently dealing with an annuity provider that claims the employer must continue to provide it with notices of when employees terminate employment, and that distributions will not be made under the individual annuity contracts until termination of employment occurs unless there is another basis (e.g., age) for allowing a distribution.  Are other providers taking this position?  And has anyone ever encountered the IRS taking this position?

Just curious if anybody has seen any regulatory guidance or discussion around steps to comply with the transparency in coverage (TiC) rules' requirement to post a link to required rate information on an employer's publicly accessible website in a situation where the employer has no website at all.  I understand that employers can contract with third parties to have them host the information on other websites but under the rules the employer still has to post a link to the other third-party website on the employer's own website so that doesn't solve the issue.  I have seen a few articles that touch on this question and simply advise that employers with no website should consult ERISA counsel.  Unfortunately, the company's ERISA counsel was apparently absent the day they covered this topic in law school.  I don't know what it might cost to create a basic public website for the company that might at least link to a third party site if need be but it strikes me that may be a better way to come at this rather than looking for some exception.  Appreciate any thoughts or suggestions.

We have a client that allows for the true-up of the safe harbor match.  There are a few participants that have maxed out their deferral contributions early and the match stopped.  The payroll provider is calculating what the match should be based on the deferrals and YTD compensation and funding it through the year.  Does anyone see an issue with this since the document allows for True-Up?  Or should the funding be done at year end?

Really quick, is a 408(b)(2) and 404(a)(5) disclosure required for Cash Balance and Defined Benefit plans?

An employer spins off from its 401(k) plan a portion of that plan’s assets and liabilities into an unrelated 401(k) plan. Neither the transferor plan nor the transferee plan has any defined-benefit or other pension obligation.

On receiving the transferor’s Form 5310A, what does the IRS do with it.

How likely is it that the IRS will ask the transferor a follow-up question?

We took over a DB plan a few years ago and obtaining the last Valuation Report as well as SB was like pulling teeth (and we are not oral surgeons).

The participant in question has terminated and client looking for me to calculate the amount due, through a current date. Upon his review, he's telling me the prior actuary counted a part-time employee as full time (1,000 hrs) for two years.

Of course employers always complain the participant is getting too much money, but according to these new facts (and he supplied the hours worked for each year) the participant's place on the vesting schedule is lower than reported by prior actuarial firm.  Instead of being 60% vested per the actuarial report, she is actually 20% vested.

My dilema - should I redo the calculations with the correct information (my actuary's opinion) or "what's done is done" as per my ERISA attorney.

Regardless of what the client "wants", if the plan is audited by IRS, they will consider this an operation failure and sanction the client.

Hi, 

Plan is terminating due to asset sale and the term date is 07/08/2022, since the plan is terminating Mid-year should a safe harbor notice be sent and will an amendment be required? 

Thanks

A labor union wants an employer to transfer assets and liabilities of the employer’s individual-account retirement plan, for the collectively-bargained employees, to the labor union’s multiemployer individual-account retirement plan.

Would this involve risks to the employer?

Small SH 401(k) plan (one MD, six NHCEs) had balance due for 2020 Safe Harbor match.  As of mid-2022, the 2020 SH match not deposited to plan (pooled account).  What options does the plan sponsor have to correct this?

Thanks.

Is a mandatory plan restatement (for example, a Cycle 3 restatement) considered a settlor function by the DOL? Or can the fee be paid from plan assets?

Does anyone know of a document vendor that has a Money Purchase plan with mandatory employee contributions (not a governmental plan). 

Question regarding the management group analysis under 414(m)(5).  I have four entities which none qualify as parent/sub or brother/sister controlled group members amongst each other.  One of the entities definitely provides management functions for the other three, but none of the three recipient organizations provide more than 50% of the gross receipts to the potential management organization.  

I know that organizations related to the recipient organization are included as part of the entire group, but I believe that analysis is scrutinized after the determination of whether a management group even exists.  In other words, if I am incorrect and  the three recipient entities above were combined prior to the management group analysis is performed, then the combined gross receipts of all of these companies would be above 50% and thus constitute a principal business.  I don't think that is the case, but I wanted to hear from others.

Maybe I'm just realizing this later than everyone else, but since the rates are changing monthly, are we in for a bunch of timing headaches?  Specifically...

1. My efficient assistant prepared the report and statements in April... and I'm just now getting to reviewing them.  It used to not be a big deal because no numbers changed.  But now I have to re-run the lifetime income disclosures because the interest rates aren't the same now as they were three months ago (or they might be, maybe... better not take the chance!).

2. Let's say I actually did send the statements with disclosures back in April.  Plan sponsors being plan sponsors, the package sat on their desk until I reminded them that they actually need to open it and do something, so they don't hand the statements and disclosures out until July.  Are the disclosures that we prepared back in April no good?  Would the participants ever know or care?

3. The interest rates update near the end of the month (according to the updates I get from my recordkeeping software provider).  Does that mean I'm on hold with sending out reports near the end of the month so I don't accidentally force a client to hand out a disclosure notice that is 'behind' by the time they hand it out?

These sound ridiculous... but that doesn't mean they're not how the rule was written.  Of course, then there's "written" vs. "interpreted"... anyway, am I working myself up over nothing?  Thanks.

Small business has discovered that it did not contribute enough in the past 4 years.  They are making the correction and will make a contribution to make whole the contributions for the previous years. Can they deduct everything this year (the year the contribution is made for correction) or do they have to go back and amend the previous 3 years returns to show the deduction for the year it should have been made?  Any direction would be appreciated.

Anyone know of a company with a 401k plan with roth conversion available for PRE tax contributions ? This is separate from a different somewhat common plan feature of roth conversion for AFTER tax contributions to assist a so called mega back door roth. Yes I know something like what I am asking can be done in IRA but then you cant put it back inside an ERISA protected 401K.

Welfare plan, the first year for one of the benefit plans included commissions & premiums for 2 years in their schedule A.  The following year, no Schedule A information was provided (since it was already reported the prior year).  There will be a Schedule A provided next year.  For the year commissions & premiums are zero, do you file a Schedule A or skip a year?