Hello,

Helping someone who has a Traditional IRA at one company and has a Solo 401k plan with Fidelity (I think its called Keogh Plan but it is a self-employed 401k).

He's trying to consolidate accounts at Fidelity who tells him that he can move assets from Traditional IRA to the Keogh Plan as the Keogh Plan is a Qualified Plan.

Is that correct? 

Can he do that?

What are the pros and cons of doing this?

Thanks

We have a client who currently sponsors a 401(k) plan but would like to convert it into a 403(b).  Is that something that can be done through a simple restatement of the Plan Document?  Or would we need to terminate the 401(k) and start a brand new 403(b)?

Thanks in advance!

Example-  I have an ESOP plan that includes a 401k deferral feature.  The employer would like to remove the deferral feature, including all the deferral assets and close the accounts.  Is it possible to write the partial plan termination amendment to terminate only the deferral portion of the plan that would create a distributable event for the participants?

A Non-ERISA 403(b) plan sponsor would like to stop sending plan contributions to one of the investments for this plan.  Is this a permissible action for this plan sponsor or an action which will endanger the plan's Non-ERISA status.  (The issue is not about terminating the investment arrangement nor is it about moving the plan assets to another investment.  The plan sponsor simply wants to stop sending plan contributions to this investment.)

I have told the sponsor that this is too close to the "line" and that I would advise against it, but I cannot find an authority which confirms this advice.

Thanks

PNJ

If Plan B (small plan) is merged with Plan A (large plan) would the Schedule of Reportable Transaction be required to be filed by Plan A if merged assets exceed 5%?

I'm thinking it would not be required because Plan A is the receiving plan.

investment advisor who manages some assets on a discretionary basis and some assets on a non discretionary basis.  purchased an ERISA Bond as fiduciary who "handles assets" for the discretionary group of plans.  Subsequently it is determined the RIA has custody of all the plan assets it manages by virtue of its ability to authorize and initiate third party distributions and payments.  the question - is custody for this reason comparable to handling assets under ERISA?    

I need clarification on wording signed by the court on 1/7/21 - This Order assigns to the Alternate Payee, myself as the husband 55% of my ex-wife's Account as of December 31, 2018 including any investment experience thereon from December 31, 2018. She passed away in March of 2020. Funds have not been transferred as of yet. It states under Death of Participant: In the event that the Participant dies prior to the transfer of funds, such Alternate Payee shall be treated as the Participant's beneficiary to the extent of his assigned interest as set forth herein. My question: Does the amount of payment still hold at 55% as stated in the QDRO whether or not my ex-wife had signed the QDRO prior to her passing.

If a plan sponsors both a US 401(k) and a Puerto Rico plan (not dual-qualified) do HCE's that participated in both plans need their compensation and contributions aggregated and tested in both plans for nondiscrimination testing?  

Its my understand the new age 72 RMD RBD is not required to adopted by a 401(k) plan - 

Assuming i am correct - Could a participant who would then be required to take their 401(k) RMD at 70 1/2 (plan rule) roll the funds (tax free) into a traditional IRA where they would have roughly 18 months before before having to take an RMD?

Thank you

I am at a loss on this, in-network provider successfully sued patient for balance bill in state court despite denial of benifits with non-liabilty and both appeals being adminstratively denied for improper billing with non-liabilty of enrolle. Lawsuit was for breach of oral contract but the written ERISA contract had a hold harmless, and included language to prevent any form of out of network contract unless the provider informed the patient in writing services would not be covered under the plan (they did not). The judge ruled as if patient had insurance and would not correct to state it was Self-Funded ERISA, would this be a cause?

I am talking with an attorney who has a practice with no employees, just him.  He has dba business name and he puts all revenue through the dba which he reports as a sole prop on his tax return.  But he does not have an EIN and seem reluctant to create one.  He wants to start a 401k for himself.  Can he do that without an EIN?

Thank you for any comments.

cross-tested plan with individual rate groups requires 1000 hours and last day for contribution.  With the individual rate group classification, is it fine to allocate employer contribution (above and beyond top heavy and gateway minimums) to someone who did not make 1000 hrs but still employed on last day?  This is a situation of a generous business owner who does not want to leave a part-timer out of the PS contribution.

My scenario:  2 business partners start a cash balance plan for themselves a few years ago (no employees).  Partner 2 is given a 35,000 contribution credit each year, well below his 415 limit.

One year, Partner 2 decides to deposit 50,000 instead of 35,000, figuring (a) it's deductible within the cushion amount, and (b) we could always amend the formulas later when the plan terminates so that his benefit is exactly what's in the portfolio.

And then sure enough, corporate divorce between the partners at the end of 2019.  Partner 2 has contributed a total of 120,000 for himself, but his actual cash balance benefit is only about 114,000, which is what he got paid a few weeks ago.

So at first glance, too bad for him, especially if Partner 1 (now basically a sole proprietor, I suppose) has no intention of paying us to amend formulas for the other guy.

But now, amid the "divorce proceedings", it sounds as though Partner 1 wishes he could have just paid the guy more from the plan.

My question is, what's the typical methodology to increase a CB formula for someone who's an EX employee?  Assuming Partner 2 has no service for 2020, what would be the typical way to write up an increase for him?  He won't hit any kind of "hours of service" requirement to accrue more. 

I'm using ASC's checklist-formatted CB plan document, if that matters.  Can I at this point increase his benefit either for 2020 (where there may be no service) or any of the prior years (where at least there was), such as to bring his benefits due up to an "appropriate" amount based on the 120,000 he put in?

(Not fully up to speed on what sort of retroactive benefit increases we can orchestrate in a CB plan.)

Thanks....

--bri

I have a question regarding processing a distribution for a participant who exceeded the 402(g) limit.

Let's say he's $1,000 over the limit and he only has Roth contributions. The distribution has a gain of $200 and it is processed after the end of the year.

My understanding is that you need 2 form 1099-Rs - one with code BP (for $1,000) and one with code B8 (for $200, which is the earnings amount). I have 2 questions:

1) Is that the correct approach?

2) If it is, what would you report as the Roth Basis on each of the 1099-R forms?

Thanks!

I have a client with an existing 401(k) plan that wants to add EACA for 2021 to take advantage of the pension plan startup tax credit.  My understanding is that they can add EACA for 2021, effective March 03, 2021, even though it won't be for a full year and that EACA will only apply to newly eligible employees.  My question is does 2021 count for the available tax credit since it is NOT a full year?  

Thank you. 

I have a participant who was eligible for the 401(k) piece of the 401(k) plan in 2020.  She had deferrals, got a match and a Top Heavy contribution equal to 3% of comp minus the match.  Comes out to about 2% of TH.  She is not eligible for the Profit Sharing component until 2021.

It's a cross-tested plan.  Gateway is 5% as an owner is getting a 22% contribution.  My software is saying the plan passes gateway even though the participant above is at 2% ER contribution. 

Brain cramp right now.  Is that right?  TH only doesn't need a gateway?  She shows up on the rate group test.

For some reason, payroll company stopped the matching contribution for everyone mid-2019.

We only do the PS and just enter the match for (a)4 testing.

Owner HCE was maxed out to $62,000.

They are going to make up the match for everyone else.

Should they bother with the owner?  Otherwise, he will have a 415 excess and get some of his deferrals refunded.

(He's the only one with a 415 issue in either 2019 or '20)

This is a plan document question and also relates to 404(c).  The plan allows participants to self-direct investments in individual brokerage accounts.  This is NOT an investment platform, but the total asset balance in each participant's account can be obtained each day online or with a phone call as the funds are publicly traded.  I believe this makes it a daily valued plan (must be indicated in plan doc) and it can be 404(c) compliant if meeting other requirements.  A plan that is not daily valued cannot be 404(c) compliant.  Question - The money type balances are only determined on annual basis by yours truly (TPA).  Does this change it from being a daily val plan to an annual valuation plan that cannot be 404(c) compliant?  I see nothing about source/money type balances in the regs, but want to be sure we are drafted documents to reflect a correct valuation date (daily vs. annual).

Thank you in advance for your feedback!

I am self-employed and decided to open a 401(k) very last minute in Dec. I signed and submitted the adoption docs to fidelity on 12/31/2020 with an election of 10,000 for 2020. I meant to make that election for 2021.

Fidelity opened my 401(k) mid-jan. Does that mean my 401(k) is active 2021 onwards and NOT for 2020? Do I still have to contribute 10k for 2020 or can that little bit of election on the adoption agreement be forgotten/ignored?

I cannot figure out if my situation is similar those already asked?

I have a High Deducible Health Plan with and HSA which I contribute to as a single.

My wife works for a municipality and has access to a FSA with her Health Plan.

We are on separate plans, separate "companies", my wife has my daughter on her plan.

Can I contribute to my HSA as an individual and my wife contribute to her FSA?

Thanks,

Ed