I know that the 3% Safe Harbor notices are no longer needed.

But what about an existing plan that is adding it?  Do they have to give a notice the first time?

If we do an SMM, it's not due until 210 after the plan year of the amendment!

Same thing for an SPD of an in-effect plan.

What about a start-up plan?  Is a notice due?  Or will the SPD suffice?

Hi

Have to admit as it has been quite a few years that I had a frozen DB plan to deal with and 401a26 testing so a bit rusty.

Plan is 3 years old and frozen beginning in2021 - hard freeze i.e. both participation and benefit accruals. It is EOY valuation. No terminations/pay outs for the past 3 years.

It is top heavy and PBGC covered.

How do I determine if 401a26 is required for 2021 for the following data as of 12/31/2021:

Assets: 350k

FT: 340k

Lump sum @ plan AE: 355k (assume 100% vesting although everyone is at 40%)

Lump sum at 417e: 580k (assume 100% vesting although everyone is at 40%)

2020 SB FTAP: 138%

2021 AFTAP: 105%

2020 SB line 16 - prior year funding %: 80%

What say you?

Thanks

Why do auditors ask for prior year 5500's?

All the filings going back to 2009 are online, and can be downloaded in an instant.

Maybe I'm losing my marbles, but wouldn't the outstanding balance of a loan as of the date the participant stopped payments be reamortized with an additional one year?

So a 5 year would now be a 6 year loan?

That's what the recordkeeper for a plan is telling the client.

Good morning everyone!  Is anyone familiar with the Auto-IRA Mandate recently signed for New York?  I know it says that if you are already providing a retirement plan they are exempt from the mandate.  If an employer opted to put a plan in today, though, are they also exempt from the mandate? 

A >5% business owner, still working, turned 70-1/2 in 2019 and took an RMD in 2019.  He did not take an RMD due to the waiver in 2020.

In early 2020 he sold all of his ownership shares but continues to work.

For RMD purposes, is he still considered a key employee who would need to take an RMD in 2021?  Would the RMD requirement for him change in any future years if he continues to work?

Thanks

I was granted disability retirement in 2000 by Marin County, Ca. Then married in 2008. And divorced in 2019. The court ordered spousal support be attached by QDRO which I opposed and basically had no choice and they pushed it thru. The order never signed by me, went to administrative person and they approved it without a dollar amount or percentage to be paid or the number of payments or time period to which the order applies  which are required. The ERISA specifically spells that out. Did the plan administrator unlawfully qualify this DRO? If so what can I do? They never even sent a joinder in person to my court appearance. Just submitted a letter at the last hour on the last day. I feel like the plan administrator dropped the ball on this and qualified a DRO that did not meet the requirements set forth by ERISA. This has basically made me homeless and is pretty disgusting. Thanks for reading . 

sincerely,

The Shaft

Have a 401k PSP where the doctors have investments in different brokerage firms (Schwab, Fidelity, etc.). This plan recently voted to update their trustee listing to incorporate all 12 current owners. An advisor for another doctor at the company advised the plan sponsor that all 12 trustees must report their SSN and DOB to Fidelity (custodian of doctor's assets) due to the Patriot Act. 

I tried researching the Patriot Act and did not have any luck. Is the advisor correct?

NAHU and others have stated ERISA Sectioin 733 (a) defines group health plan to include Dental and Vision for disclosure purposes.  Is anyone aware if the volunatary group products CI, Cancer, and HI in the title are also included in the defined covered plans?  Not purely list billed Individual CI, Cancer, HI plans.  So far no one has been able to answer this, but each covers medical care and are sold to Groups via payroll pre-tax reduction under Section 125 Plan, so they are included in ERISA Plan Documents.  Thanks in advance

Company missed a deferral opportunity for one employee.  Failure to implement an employee election.  No doubt here.

Correction is 50% QNEC.  I get that.

But to make up the match, it's:

Quote

"(c) Missed opportunity affecting matching contributions. In the event of failure...if the employee would have been entitled to an additional matching contribution had either the missed deferral or after-tax employee contribution been made, then the Plan Sponsor must make a corrective employer nonelective contribution for the matching contribution on behalf of the affected employee, or a corrective QNEC in the case of a August 2, 2021 230 Bulletin No. 2021–31 safe harbor plan under § 401(k)(12)."

What does "nonelective contribution for the matching contribution" mean?  Is it a convoluted way of saying it has to just be a match?  If not, what kind of nonelective contribution?

This is NOT a safe harbor plan, so it won't be a QNEC.

DB plan terminated and excess asset will be transferred to the 401k PS Plan (QRP).  Questions:

- Must the excess asset be allocated in the QRP based on 1/7th of the excess each year or can the allocation be an amount based on desired allocation by Plan Sponsor even if less in each year?

- Can the allocation be based on new comp 401(a)(4) method with the Owners at 415 max and employees at minimum to pass testing?  Or must employees receive allocation at 415 max as well.

- If there is excess asset at the end of the 7th year, must all participants receive an allocation up to 415 limit before refund of remaining excess at 20% excise tax? Continue to allocate until all excess funds depleted or QRP terminates?  In 7th year, allocate based on new comp max for owners / min for others and refund remaining excess?

- Can excess assets in the QRP be used to pay plan expenses.

Participant started installment payments in a 457(b) top hat plan (tax exempt employer), and then the participant died.  The beneficiary is asking about options.  Does the beneficiary need to continue the installments (assuming they meet RMD rules)?  or can they choose to take a lump sum distribution.

my concern is the language in Treas Reg 1.457-7(c)(2)(iv) since payments under the ppt's election started.  Thanks!

(iv) Election as to method of payment. An eligible plan of a tax-exempt entity may provide that an election as to the method of payment under the plan may be made at any time prior to the time the amounts are distributed in accordance with the participant or beneficiary's initial or additional election to defer commencement of distributions under paragraph (c)(2)(ii) or (iii) of this section. Where no method of payment is elected, the entire amount deferred will be includible in the gross income of the participant or beneficiary when the amounts first become made available in accordance with a participant's initial or additional elections to defer under paragraphs (c)(2)(ii) and (iii) of this section, unless the eligible plan provides for a default method of payment (in which case amounts are considered made available and taxable when paid under the terms of the default payment schedule). A method of payment means a distribution or a series of periodic distributions commencing on a date determined in accordance with paragraph (c)(2)(ii) or (iii) of this section.

Hi

Here is a new one for me.

I am looking into taking over a set of one life-owner only DB plans.

I am told that AFTAPs were never done because these were one lifers. AFTAPs are never exempt unless frozen prior to 9/5/2005, if I recall correctly.

Some of them have been around for many years.

I believe 101j notices are not required but benefit accruals should have been frozen in time.

The plan document provided had no 436 options elected which is odd - checking with the vendor (same as mine) on what can be done here or even it was possible to complete the document without any of these provisions.

If anyone has any experience with this situation, can they share on the fix?

Thank you,

Can anyone point me to a link that will outline the history of the IRS' 6 year restatement history? is there such a definitive list?  When it started?  Required and optional interim amendments, a chronological history?  

Thanks

Hello, new here (to the site and the retirement industry in general). Could anyone please help me understand in what circumstances it is permissible to amend to remove an optional benefit? We have a client who purchased two companies via stock purchase and need to merge both subsidiary plans into theirs (messy, I know). There are partial and installment withdrawals in one of the subsidiaries, but we would like the surviving plan to have lump-sum only (with partial and installment only available for RMDs as is standard). It seems like the Code is pretty clear, but I'm just not understand the regs on this matter. Any help you can provide would be much appreciated!

I currently have a 401k loan for $3k. My wife has a Roth 401k with a former employer worth $3k. Is it possible to roll my wife's 401k into my plan to pay off the loan? 

Two Questions. A terminating DB Plan has excess assets and wants to transfer to a 401(k) Qualified Replacement Plan ("QRP"). The 401(k) plan has standard QRP language stating it will accept such transfers and the terminating DB plan has a termination amendment stating excess assets will be transferred to a QRP.  Does the language have to specifically name the QRP and is there an amendment reflecting or documenting the actual transfer?. The second question is that for a different terminating plan, the excess assets were transferred to a 401(k) QRP but the excess assets are not being distributed rapidly enough for some participants. The plan sponsor has two other Profit Sharing Plans. Can he treat all 3 plans as QRP's and transfer excess assets from the original 401(k) QRP to the other 2 profit sharing plans and thus accelerate distributions?

Could a 403(b) loan program be established in a way that a loan can be taken for any reason, but only for individuals with “X” years of service (e.g., 10 years of service)?  The plan in question does not have any HCEs so there would not be a discrimination issue, but in general is it permitted to structure a loan program in this manner?

Thank you for any replies

Solo Proprietor earlier this year funded a SEP-IRA for the 2021 tax year
Now (due to a surprise increase in earnings) he wants to fund a Solo 401(k) - because he will be able to contribute the max @ $58,000 which he won't be able to with the SEP

I am aware you can't fund both a SEP and Solo $401(k) in the same tax tax assuming the SEP was established using IRS Form 5305-SEP. That being said, what options, if any does the owner have in reversing/canceling the SEP contributions? And instead fully funding the Solo(k) for 2021?

Thank you in advance

A little confused on how the timing works on what Datair is providing as additional PPA document amendments (Expanded Hardship, Qualified Plan Loan Offset, Forfeiture Allocation, and Disability Claims Procedure) that need to be in place by 12/31/21 (though only Expanded Hardship and QPLO need to be signed by the plan sponsor; the rest are adopted at our level or above).

We're restating our plans effective 1/1/22, signed (hopefully!) in December 2021.  We're getting unclear information from Datair themselves as to whether this means that these amendments need to be executed separately in 2021 because they belong to the PPA document, or if they are considered 'wrapped up' in the restatement because the restatement is executed prior to 12/31/21.  Any thoughts from other Datair users?  Or in general?  Thanks.

For a post-PPA restatement not signed by 12/31/21, I believe they would need these amendments executed separately.