Employer has  a cross tested plan. Employees in their own rate group. In addition, outside of the plan, they award gifts to employees once they reach a  5 year milestone.

The employer wants to offer the gift or the profit sharing allocation. The employee chooses which one they want.   The plan would need to remove last day requirement since the employer will fund the profit sharing once them employee meets the 5 year mark.

Is this even acceptable?  Allowing the employee to decide if they want the contribution  or the gift?

Even if a number of rank in file select the gift over the contribution, the employer makes a 3% safe harbor  and this is sufficient to cover the gateway.

Just doesn't seem right.

Looking for reasons to tell the client to back away from this design.

Hi,

A participant in  a 401k Plan terminated years ago. He received currently a letter from the Social Security administration that informs

him that he was a participant in the plan and that if he was never paid out, he is then entitled to his account value. The letter towards the bottom shows

a grid that shows that the last reported year was 2007 and his account value was $49,251. Question: How would they know his account value? Usually the W2 shows only the

deferral made for the year. Thank you!

Hi, I have a participant that is requesting a residential loan but they will be building a home not purchasing a home.  Can this be done with a 401k loan?  and if they can, what documentation should we be requesting?  A contract with the contractor that is building the home?  I'm confident that the purchase of just the land parcel does not qualify for a loan and that is what they provided so far.  Thanks for any insight on these rules

Plan includes the QBAD provisions.  Apparently these distributions are subject to self-certification.  Is there a provison that says soething like "unless the plan administrator has actual knowleddge to the contrary"?

Just curious what the standard for verification is on these QBAD's?

DRO submitted to Grumman April 2009.  May 2009, DRO almost accepted by Grumman .  The rejection letter states: Upon review, it has been determined that the order against the Pension Plan would meet the requirements of a Qualified Domestic Relations Order once the following modification has been made: Section 1 (c)- The correct name of the Plan is Northrop Grumman Pension Plan. Please make the modification  accordingly. 

January 2010, a DRO with the corrected pension plan name was signed by the courts, filed, and sent certified to the PA. No further correspondence exists.

The DRO was separate interest; awarding the benefits to the AP as my sole and separate property.

The current PA, Fidelity took over administration of the Grumman Pension in 2017 and has no record of any paperwork of any kind relating to divorce, DRO, QDRO.  The closest that they were able to find was a PDF attachment to the benefits called QDRO but when they click on it, they get file not found.  They have informed me the benefits were never separated. 

Fidelity has been given all the documents that I had. I don't think that I have filed a formal claim. I have a Fidelity-Issued Reference Number dated 3mths ago the start of my 'inquiry" .  Calls to Fidelity result in lots of conversations, everyone has been quite nice without ever giving me any information. They say there were delays due to not being able to reach the Participant to verify the information. Delays due to COVID and getting copies of the original documents filed with the county.  delays with the issue being reviewed by employer/sponsor. Etc… Etc…  Will they eventually have to tell me what is going to happen?  Can this just drag out forever? Is there a formal process that I have to follow to get them to give me a determination?

In 2007 as part of the bifurcated divorce action, the pension was listed in assets with a value of $1.2mil, so it wasn't a tiny account.  I understand given that the plan was never separated, I have obstacles beyond the DRO qualification (IE: Fidelity says privacy laws won't let them tell me if the plan is now in 'pay' status which could create insurmountable problems for my 'separate interest') but no sense going into them if there is no QDRO.  

Bottom Line: Like many other people that have posted here, I am hoping that my case is unique and that my DRO is a QDRO even without the Qualification letter.  Yeah, stupid, I know.  All my plans for how to survive were based on those monies.  

Getting a lawyer and going to court are problematic. I am still a US citizen, I live abroad, severely disabled. There is no possibility of my getting back to the States.  Just trying to get a read on a scale of 1 to 10, how screwed am I.  Thank you for your consideration.  This forum provides more clear and unambiguous information on QDROs than the whole rest of the internet combined.

Hello.

Client is looking to remove a fixed non-safe harbor match of 100% of deferrals up to 6% comp(pay period determination period) from its plan.  The plan also has a safe harbor match., so this is a safe harbor plan.   Can we removed the fixed match so long as it is done prospectively (say 8/1/21) with no SH notice provided by July 1.    Is this change a permissible mid-year change to a SH plan?  Please advise.

The instructions for the PBGC premium payments say that alternate payees are not included in the participant count.

From what I read in the code and ERISA, an alternate payee is defined as someone subject to a domestic relations order.  Not specifically a QDRO.

Therefore, I suspect that for my 2021 filing, where the only benefit left to go as of 12/31/20 was for an alternate payee whose QDRO was signed by the judge in January, there's no participant count at all.  (Actual participant took his 50% earlier in 2020.)  I wasn't sure if the January date "qualifying" the order might mean the sponsor has to pay 1/12 of a head-count charge. 

But since the domestic relations order really came about first in 2006 (it was signed by a judge then but incorrectly designed/worded - not sure who reviewed it - and never corrected until the past year with the payment pending upon plan termination), I think the sponsor has no premium due at all.  (Obviously no VRP since all benefits have been completely paid now.)

Sound correct?  I'm also thinking my participant count was 0 at year end 2020 and then as the BOY count on what will be their final 2021 Form 5500-SF filing as soon as the residual $40 in trust assets is liquidated and applied to administrative fees.

Thanks.

-bri

I represent a multiemployer defined benefit plan. Employer X previously maintained a single employer defined benefit plan for its collectively bargained employees. X negotiated the merger of its plan into the multiemployer plan in 2005. However, because there were certain underfunded portions of benefits under its plan, under a merger agreemenet between the union covering X's employees and X, X agreed to make contributions for the underfunded portion to the multiemployer plan over a 10-year period with interest. Instead, X made a lump sum contribution of the underfunded portion plus interest to the multiemployer plan in 2006.  X withdraws from the plan in 2019. In assessing X for withdrawal liability, the actuary treated the lump sum contribution to the plan as an employer contribution in determining the amount of X's withdrawal liability. X has filed a request for review of the fund's assessment challenging the treatment of the lump sum contribution as an employer contribution. Does the multiemployer plan have a reasonable argument for its treatment of such amount as en employer contribution for purposes of X's withdrawal liability calculation?

I am preparing a 5500 for a large welfare benefit plan.  The agent has informed me that one of the insurance companies failed to pay them commissions for several years and when this was discovered, they made one large payment of those commissions in 2020.  Would you report the entire amount paid on the 2020 Schedule A even though a majority of the amount reported was actually for other Plan Years?  I don't see anything in the instructions that address "back" commissions. 

Thanks!  

Hi

I am no expert on 8955-SSA but was having a discussion with a TPA.

Whenever there is a termination of a participant and the participant is not paid out by the end of the plan year following termination, I file 8955-SSA, regardless of plan type. I have always known this way.

The discussion is about the "deferred benefit" which the TPA stated that is only applicable when the benefit/account balance is not due till NRA i.e. plan does not pay benefits till NRA.

Also, TPA stated that if only a 401k/safe harbor plan, does not need to file 8955-SSA (all benefits are 100% vested at all time). Is this correct per instructions "Plan administrators of plans subject to the vesting standards of section 203 of ERISA must file Form 8955-SSA."?

Are there any situations where 8955-SSA is not required to be filed for any qualified DC and/or DB plans? Let's leave 403b plans out and this is a question for DC or DB plans. Terminated participants may have partial or full vested benefits.

Does it matter if the DC plan is a money purchase plan or a profit sharing plan where the normal form is J&S?

What am I missing here?

Thank you

Company name Two River Phrenologists

On 5500 and plan docs over the years (for whatever reason) it was listed as Two Rivers Phrenology. 

The Plan has an identical naming issue.

We are correcting the plan docs going forward, and will make the change on the 2020 5500.

Will I have to complete question 4 about the name change?  Or will it not matter, that one little letter?

We have a 401(k) Plan participant with a balance in the plan, DOB in 1946, still employed, is a non-key.  

This year (2021), the company was purchased by another business.  The old company is no longer in existence and the 401k plan is being terminated (not a plan merger).  The new owner has hired most of the prior company's employees, including the above individual, and is crediting service with the prior business for all purposes in the new owner's 401k plan.  Balances from the old plan can be rolled into the new plan immediately.

Would an RMD be needed for this individual this year?  We could do the RMD before she rolls her balance into the new employer's plan or after the rollover?  And if one is required from the old plan, would it also be required from the new plan in subsequent years even though she would continue to be employed?

Thank you.

I have a new client that hadn't funded a required contribution for multiple years.  They funded those contributions, with added interest, in '21.  The question is, when are these contributions deductible on their taxes (they hadn't been taking the deduction, since the contribution had never been made).

1) Is it deductible in the year it was originally due?

2) Can they take the deduction in 2020 (it was funded in early '21, before the due date of ER contributions)?

3) Is it deductible in 2021, since that's the year it was made?

I'm not an accountant, so I'm not sure.

Thanks in advance!

We have a catch-up eligible employee who is participating in two "plans" adopted by unrelated employers. The employers are part of the same MEP, but tested separately. 

If the participant is due an ADP test refund in both plans, can we use up to $6,500 catch up to offset in each plan? 

I believe the regs allow catch up offset exceeding $6,500 across unrelated employers in SEPs, but we are wondering if the same rules apply to an MEP. 

Hi Team! Looking for a Study that defines Roles/titles as well as Compensation levels for the Employer Sponsored Retirement Plan industry.

As our team grows it's important for us to have an idea of what the industry is calling for so we stay competitive.

Hoping someone has a resource or contact.  Thanks!  

I have an individual client who's employer is stating he voluntarily terminated employment because of job abandonment.  However, he did not abandon his job but left (with the employers permission) on a Tuesday after they refused to pay him a commission on a large deal which violated his employment agreement because he was very upset.  His attorney sent the employer a demand letter the next day requesting how they were changing his prior employment agreement and indicated the employee would be taking vacation days until the employer responded.   The issue is that employer is stating he voluntarily resigned when he didn't and wanted to remain working there but couldn't get them to agree that they were changing his employment agreement.

He elected COBRA, (the employer has less than 20 employees so  it officially falls under the state continuation plan) but without knowing the monthly premium cost.  When he received the amounts($3,400/month for he and his family), he did not proceed with COBRA and didn't make any payments.  He is still within his COBRA eligibility window and therefore submitted his request for treatment as an AEI, but the employer returned it to him denying coverage due to "loss of employment was voluntary".  

The DOL/EBSA cannot assist because they don't have jurisdiction over state continuation plans and his state department of insurance is indicating they can only help with Insurance Company or Agent issues.  

Does anyone have any suggestions on how he can either get this resolved or where he can get legal assistance?  Most of the law firms he has spoken to deal with employers and not individuals so he's at a loss of where to turn.

Thanks in advance for your thoughts!

C

I have a plan that hasn't had a distribution is a few years (since 2016).  How can I find out if the Trust ID has been deactivated?

Ahoy, could someone do me a big favor and take a call from an attorney friend of mine who might be taking a plan sponsor into the PBGC mediation program that was started in 2019? He'd like to find out a little more ahead of time. It's a single-employer plan.

Feel free to post a reply here, or contact me via the "Message" button on my "profile" (click on my name). Thanks!

We have an opportunity to establish two DB plans for a municipality but our actuary does not have a plan document that can be used.  Does anyone know a good actuary or attorney who can draft these documents?  Illustrations have been done following the provisions of another municipality (we have their plan documents) and the decision-makers were happy with the results so the provisions can be copied from that municipality's plans.  We are in the finalist stage and need to get a quote together so please reach-out if you can do them or if you have a good recommendation.

I have a client where the owner sold the company, with all of the employees being hired by the new company.

The Plan itself is staying open for a few years, as the owner working as a consultant for who she sold to and getting paid through the old company.

Basically, all of the employees are terminated except the owner and her son.

The question is, in this type of situation what happens to the participant's vesting?  I know on a plan termination everyone is automatically 100% vested, but this isn't a plan termination.  But in this case, does that still apply?

Thanks in advance!