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5 U.S. Code § 8341 - Survivor annuities provides: 

"(g)In the case of a surviving spouse whose annuity under this section is terminated because of remarriage before becoming 55 years of age, annuity at the same rate shall be restored commencing on the day the remarriage is dissolved by death, annulment, or divorce, if—

(1)the surviving spouse elects to receive this annuity instead of a survivor benefit to which he may be entitled, under this subchapter or another retirement system for Government employees, by reason of the remarriage; and

(2)any lump sum paid on termination of the annuity is returned to the Fund."

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5 U.S. Code § 8445 - Rights of Former Spouse provides:

"****

(c)The commencement and termination of an annuity payable under this section shall be governed by the terms of the applicable order, decree, agreement, or election, as the case may be, except that any such annuity—

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(2)except as provided in subsection (h), shall terminate no later than the last day of the month before the former spouse remarries before becoming 55 years of age or dies.

****

(h) (1)Subsection (c)(2) (to the extent that it provides for termination of a survivor annuity because of a remarriage before age 55) shall not apply if the former spouse was married for at least 30 years to the individual on whose service the survivor annuity is based.

(2)A remarriage described in paragraph (1) shall not be taken into account for purposes of section 8419(b)(1)(B) or any other provision of this chapter which the Office may by regulation identify in order to carry out the purposes of this subsection."

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The ability to restore a lost survivor annuity set forth in 5 U.S. Code § 8341 does not appear in 5 U.S. Code § 8445.  It is my impression by 8341 only applies to employees under CSRS and that 8445 only applies to employees under FERS.  Am I correct?  

Here are 3 cases that don't help much. 

Ross v. OPM, DOCKET NUMBER DE-0831-12-0154-I-1; DATE: April 15, 2013
https://www.mspb.gov/decisions/nonprecedential/ROSS_SCARLET_L_DE_0831_12_0154_I_1_FINAL_ORDER_813400.pdf

Kindall v. OPM,  347 F.3d 930 (2003)
https://scholar.google.com/scholar_case?case=10160421678461792528&q="5+usc+8341(g)"&hl=en&as_sdt=20000006

and

Downs v. OPM,  69 F.3d 1141 (1995)
https://scholar.google.com/scholar_case?case=2585981013695329568&q="5+usc+8341(g)"&hl=en&as_sdt=20000006
 

Thanks, 

David Goldberg

marylandmediator@gmail.com

401(k) and corporate plan years end on 6/30.

Plan fails ADP Test and excess contributions will be returned (w/earnings).

What I'm unclear, and we do not share accounting advice as it is, but do those contributions still get treated as plan year 401(k) for corporate tax purposes?

A sponsor wants to leave a PEP and continue their plan either by spinning off to a new standalone PEP or a new standalone non PEP as a continuation of the 401k plan Concern is we may not be able to do this by 1/1/26. This is a non safe harbor non PEO plan. Are the main concerns whether the PEP and RK will allow this to occur mid-year? If the new 401k plan is drafted as a continuation plan I do not see that a short plan year is created. Please confirm, etc. Thanks!

I have just be hired by an employer that has not filed Form 5500 for many years.  The employer can only find records for 10 years  They are missing records for more than 10 years. Will the missing years be a problem if they go though the DOL's Delinquent Filer Program.  Will the relief only apply for the filed years?  Will the employer be subject to full penalties  for the years they cannot file?

Larry Grudzien

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Are services as a directed trustee considered "fiduciary" services as contemplated by this exemption? I would expect that it is really aimed at preventing self-dealing, and the residual fiduciary obligations of a directed trustee do not rise to this level.    

Of the many tax-qualification conditions and other rules a recordkeeper’s system hopes to help a retirement plan’s administrator apply, a few might turn on whether a participant is an employee or is a self-employed individual (who might be treated as a deemed employee).

Among these, a § 414(v)(7) restriction against non-Roth catch-up deferrals does not apply to a participant who is a self-employed individual (who has no FICA wages).

I’ve seen in recordkeepers’ systems Yes-or-No indicators for whether a participant is: union-represented, treated as an insider for trading in employer securities, an officer of the employer, or a super-officer.

Does a recordkeeper have an indicator for whether a participant is an employee or is a self-employed individual?

(I recognize a use of this depends on the census information furnished to the recordkeeper.)

A sort for participants who might be § 414(v)(7)-affected might look for those with compensation that suggests that FICA wages for a relevant year might exceed $145,000/$150,000. But without a further sort, that might result in “false positives” by including deemed employees who have compensation but no FICA wages. (Imagine a professional-services business in which hundreds of workers are partners.)

Could an employee-or-self indicator sort out this out?

If a recordkeeper lacks such an indicator but has a field for ownership percentage, might one use that as a way to classify a self-employed individual? For example, if a worker’s ownership percentage is less than 1% (so it doesn’t trigger other rules) and perhaps as little as 0.0001, could that classify the participant as one who can’t be § 414(v)(7)-affected?

(I’m mindful that an employer has the facts, and could control the plan administrator’s communications. But I seek to learn about what communications a recordkeeper can do without the employer/administrator’s effort.)

Both former spouses work in the same company. If the rollover due to QDRO is moved from one spouse's 401(k) account to another's (within the same plan), would it be considered a Related Rollover or an Unrelated Rollover (for Top Heavy purposes)?

Thanks,

An employer wants to have a 3 month eligibility and 520 hours worked within the 3 month period.  I was very confident telling the employer that if you want to attach an hourly requirement to a shortened eligibility period, using 1,000 hours for a 12 month period as my base, hours would need to be prorated accordingly, i.e., 250 hours for a 3 month eligibility period.  The advisor pushed back, asking for the document provision that does not allow 520 hours worked in a 3 month period.  Reviewing the adoption agreement and basic plan document, there actually is nothing in the document that prohibits having this in the adoption agreement.

The employer is aware of the LTPT rules and also aware that no matter what the plan's eligibility requirement is, if an employee completes 1,000 hours in a 12 month period, they must be allowed to enter the plan unless they are in an excluded class.

Does my alternative arguement to not allow this in the document hold water?

While the document allows flexibility, IRS rules under IRC §410(a) still apply:

• A plan cannot impose eligibility conditions that effectively prevent participants from qualifying within the maximum permissible timeframe.

• If you reduce the service period to 3 months, the required number of hours must be reasonable for that duration. 520 hours over 3 months (~40 hrs/week) is seen as unduly restrictive by IRS standards.

Therefore, even if the document doesn’t prohibit it, adopting a 520-hour rule in a 3-month window could jeopardize plan qualification if audited.

I'm having a lot of trouble with the 280G rules.

I have a Disqualified Person who is 100% vested in separation pay.  If the DP leaves for any reason, she gets a big payment.  She also gets the same big payment (same $ amount) if she is terminated within 6 months of a change in control.  We are going to have a change in control and she is going to be terminated.  I don't know if the separation payment should be included in the parachute payment calculation.

• On one hand, she is already vested in the total amount of the payment and would have received the payment upon termination regardless of the CIC.
• On the other hand, she is being terminated in connection with the CIC, so the payment is contingent on an event related to the CIC.

The question is, does the payment go into the parachute payment calculation?  Since she was already fully vested in the payment, is there some discount on how much is included in the parachute payment calculation.  I know the regulations provide rules for "vested" amounts that are accelerated due to the CIC, but I don't know if that applies here -- and even if it does apply, we have no idea how much the payment was accelerated, since we have no idea when termination would have occurred if not for the CIC (would she have worked 5 more years?  15?).

Unfortunately, it gets more complicated than that, but the above is the "easy" version of the issue.

I would really appreciate any insight (with the recognition that no one is providing legal advice).

With the new rules, must plans allow all participants the ability to make Roth deferrals?  Or can a plan just have the Roth only for when it's required for catch-up?

2 hypothetical scenarios so making things up:

Scenario 1: A QRP receives 105k in excess assets from a DB plan and will allocate in 7 years. It is invested in a 0% interest bearing account.

Year 1 must allocate 15k (1/7th of 105k) so end of Year 1 balance is now 90k

What are the Year 2 and Year 3 requirements assuming minimum will be allocated

Scenario 2: Same as above with the exception it is invested in an account that will have 10% return

Year 1 must allocate 15k but now end of Year 1 balance is 99k

What are the Year 2 and Year 3 requirements assuming minimum will be allocated?

Thanks

Internal Revenue Code § 414(v)(7)(A) sets $145,000 (inflation-adjusted) as the limit on a preceding year’s FICA wages for a participant not to be constrained to make age-based-catch-up elective deferrals as Roth contributions.

Here’s the “Cost of living adjustment” provision: “In the case of a year beginning after December 31, 2024, the Secretary shall adjust annually the $145,000 amount in subparagraph (A) for increases in the cost-of-living at the same time and in the same manner as adjustments under [I.R.C. §] 415(d); except that the base period taken into account shall be the calendar quarter beginning July 1, 2023, and any increase under this subparagraph which is not a multiple of $5,000 shall be rounded to the next lower multiple of $5,000.” I.R.C. § 414(v)(7)(E) https://www.taxnotes.com/research/federal/usc26/414?highlight=414.

Assuming all relevant years are calendar years:

I estimate that, for 2025 FICA wages to drive how § 414(v)(7) applies for 2026, the $145,000 will become $150,000.

BenefitsLink neighbors, is this likely?

Or would a § 415(d)-method calculation come out differently?

Two related companies filed their MEP 401(k) plan's single 5500-SF annually over many years. The common ownership ended, and the MEP split into two separate plans effective March 31, 2024. I am trying to understand how to handle the 2024 5500-SF reporting for one of the companies - the one that became my client just recently. 

Was a short plan year filing due for the MEP? I do not think one was done. Can either company file a full year 5500 for 2024? What should be considered in order to make these determinations?

On Jan 1, 2024 we implemented a loan policy that allows a loan on the amount of 50% of vested balance not to exceed $50k.  When our recordkeeper updated the system to reflect the new loan policy, they did not include the 50% of vested balance part.  We had 12 employees in 2024 take out loans in excess of the 50% of their vested balance.  Some loans were 90% or more of the vested balance.  This is 100% fault of the recordkeeper as they have admitted.   What recourse do we have against the recordkeeper?  What options for corrections do we have.  The recordkeeper showed us one option where the participant will have 60 days to pay back the excess or it will deemed a distribution.  Has anyone else experienced this type of failure?

I have a question as to whether this spin off 401k plan is grandfathered or not for purposes of the mandatory automatic enrollment. Plan adopted a PEO on 2/1/2023. Plan spins out into its own single employer plan on 1/1/24. Is the plan required to adopt the mandatory AE provision under Section 101 of SECURE 2.0? Thank you!

What websites do folks prefer to use when looking up actual text of code and regulations? 

Last year my preferred one became Bloomberg https://irc.bloombergtax.com/public/uscode/toc/irc

Because it included the full cite on each line and I did not need to scroll up to figure out if it was (k)(9)(ii) or whatever. But that seems to have gone away. At least it doesn't display for me. 

Does anyone else use a free website that has that particular formatting? I really got used to having it. 

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Our client currently has a money purchase plan. They no longer want the money purchase plan and want to replace it with a 403(b) plan. Would it be considered a merger? Or do we have to terminate the MP plan?

Are there any special considerations when doing this?