Can anyone provide a code citation that defines when a participant in a defined benefit plan (CB in this case) is considered to have been paid a lump sum distribution? Date funds leave the trust, or date participant has control of the funds? Or something else? I've looked, but I'm not a very good looker, and hoping someone here can at least point me in the right direction. Even if no citation, would love some opinions on this. 

This is related to some mandatory cash-outs that were started the last week of Dec 2023 from a calendar-year CB plan. The Plan wired the required funds to the distribution custodian on 12/26/2023 and provided participant hypothetical balances as of 12/31/2022 (Plan Doc does not allow pro-rata interest thru ASD, just the last-day interest credit). TPA states that since funds were sent to distribution custodian before 12/31/2023, the participants are considered paid in full as of that date.

We've since learned that several of the participants did not receive funds until well into February 2024 (delays in responses, paperwork, etc.). Anyone feel like they were shorted their 12/31/2023 interest credit?

Thanks in advance!

Hello,

I was wondering if it is unlawful for a company to deny opt out money that they offer to all eligible employees to married couples that both work for the company? As individual employees we each receive a benefit plan that includes Healthcare. We choose one family plan through the wife's benefit package, therefore not using the husband's benefit package. Yet, we are denied the opt out insurance money for not using the husband's Healthcare plan. Could this be considered discrimination based on marital status?

Thank you in advance!

We have a participant who died, his wife beneficiary was injured in the car accident as well and has medical bills so she is in a big hurry to get his account which is $100,000+.  (So the plan sponsor puts the medical bill guilt on us.)

We asked for the death certificate but was told it would not be available for 12 weeks.  The record keeping platform does not require a copy.  

I see 2 options:

- Ask the plan sponsor owner to confirm that the participant died and then we rely on his direction (such as did you go to the wake and see the deceased?)

- or wait it out and require the death certificate.  I'm strongly inclined to require this. I don't want to take any chances.

Comments?

Thank you, Tom

Company is looking to terminate their SIMPLE IRA ASAP and replace with a Safe Harbor 4% match 401k in 2025. Soonest possible would be 6/1/2025 after giving the 30 day notice for Simple Termination. Would the effective date of the 401k be 6/2/2025? Or would the effective date of the 401k Plan be 1/1/2025 with a special start date for deferrals as of 6/2/2025? I would assume the plan would begin 6/2/2025, but I know Safe Harbor Plans should be in place for the full year. Is that not a requirement if doing a mid-year simple replacement? 

The Smple Plan is set up for a 3% match. Would that be pro-rated the same as the Safe Harbor Match? Ie,a 3% Simple IRA match for half the year + 50% of the SH match for half the year would be an effective match of 3.5% on 4% deferred for 2025?

Also, he says he notified employees via email in December of 2024 that the Simple IRA was terminating. No deferrals/contributions have been made in 2025. Would that notice work? Or does it need to include language regarding the replacement with the SH 401k?

Employer is approaching 100 employees.  Only 4 participate in the current SIMPLE plan.  They are eligible but don't participate and most don't speak English.  It is an egg farm.  You do wonder if they know they are eligible.  Most employees hold a permanent resident card but that expires in the next couple years.   

I see the IRS 100 employee prior year rule with wages of at least $5,000.  I don't think any type employee can be excluded from this count.  It's simply $5,000 or more.  I don't know that a 401(k) would be worth the trouble with auto-enrollment, etc.  The new plan would like to be referred to us which I'm not sure I would even want!

Comments?  I doubt classes of employees can be excluded from a Simple IRA count.

Tom

An employer sold to a new entity and shut down their business checking account prior to payment of final employer SHNE and PS contributions.  TPA was notified last month and has the plan terminating in 60 days.

I am not aware of how an employer contribution would be funded by anything other than the business account.  They want to use their personal account, but I am fairly certain this is not an option.  Any advice for remittance of the funds?

Thank You 

Is a plan amendment required prior to 1/1/2026, or does this just fall under the general SECURE/2.0 amendment deadlines - in other words, it can be handled operationally as long as amended by the deadline? Recognizing, of course, that notification will need to be given to the HPI's as well as participants who will now have a Roth option if they didn't have it before, etc...

Bleah.

Deferrals/SH: age 21, 2 months, quarterly entry

PSC: age 21, 1 YOS, Immediate entry

both SH and PSC exclude pre-entry compensation

if an employee who became eligible for def/SH on 7/1/2024 with a pre-entry compensation. since he is entitled to SH, then he needs to get GW min. we use 5% GW test method which allows us exclude pre-entry compensation. can I use the SH post entry compensation for GW min calculation in this case? or we have to use full year compensation for GW since the post entry comp is for SH but not PSC?

thanks in advance

Plan is a 401k PSP pooled account. The trustee and her spoiuse both took out 2 loans a piece and defaulted on both of them. One in 2022 and one in 2023. Their CPA issued the appropriate 1099s.  There is a zero balance showing for their loans.  They want to pay the balances off. Can they do that?  Plan doc says the following:   TYIA! 

There must be some website where I can download the APRs for cross-testing, right?  There should be tables for each mortality table and different interest rates. I know I can export them one at a time out of Relius but I am assuming some website has them somewhere?

Hi all,

I'd love to hear your opinions on this, because I've had a bear of time trying to find an explicit citation that addresses my thoughts one way or the other.

I have a 401(k) Plan with the following eligibility conditions: deferrals & SHNE, Age 21 & 6 months, immediate entry upon eligibility, profit sharing, Age 21 & 1 Year of Service, entry 1/1 & 7/1.

The Plan document reads "For allocation purposes of the 5% Gateway Contribution described under (A) of subsection (iii) above, 415 Compensation shall be determined for the Plan Year (rather than the Limitation Year) but shall exclude 415 Compensation paid while an Employee is not a Participant in the Plan." (It's a Relius document.)

I have 3 individuals who were participants in the deferral and SHNE components of the Plan for the entire year, but entered the PS component on 7/1, so they have partial year excludable comp for a particular Plan component, but they've received 401(a) contributions the entire year. Is their 5% gateway test compensation based on their post-PS entry compensation or their full year comp?

An additional question boils down to is compensation paid prior to participation in a certain component of the Plan a 414(s) safe harbor exclusion or is it only compensation paid prior to overall Plan participation? Does it matter if two different components which are both 401(a) contributions have different pre-participation compensation amounts?

Even more simple question, can someone point me to where pre-participation comp as a 414(s) safe harbor exclusion originates? I've found lots of articles saying so, but I seem to be reading past the primary source language listing this.

I'm the AP on my ex's FERS.  I believe since I got re-married after age 55, I'm still eligible for the survivor annuity.  That's going off information from the QDRO. However, the gov't won't send me a copy of the Plan until my ex retires (sometime this year). Not sure they can withhold the Plan document, but I got tired of asking.  Also, as an AP on a Pension benefit, I wouldn't waive my right to a survivor benefit unless I was paid a lump sum approximation of the cumulative payments (longevity runs in my family).

Can a participant's enrollment be changed if they failed to inform the employer of a dependent's ineligibility during the special enrollment period?  The participant presented a "nonsuit" to the employer that indicates the participant, as of February 2025,  is no longer proceeding with formally adopting a child.  The participant divorced his spouse in 2024 and the ex-spouse is currently receiving COBRA.  Assuming the nonsuit constitutes a qualifying event, the participant did not present the nonsuit to the employer until after the end of the special enrollment period.  The employer has been made aware that the child is ineligible because he/she is no longer a dependent of the participant.  Coverage by the insurer for the now ineligible dependent can be dropped prospectively; however, can the participant's coverage be also be changed from Employee + Dependent to Employee Only given that he no longer has a dependent?  

What about COBRA?  Who should receive the notice?  The participant or the participant's ex-spouse who is proceeding with adopting the child?   

My firm just took over a plan that missed the PPA restatement & the cycle3. We have completed both restatements now but what do we need to do to correct this? Ours thoughts were that the PPA document needs to be corrected through the VCP and that cycle3 could be corrected through SCP. Can anyone confirm or share their thoughts? There is some varying information out there. 

Company with 2 Partners and 2 employees.   The Partners are the only Participants in Cash Balance Plan.

Partner 1 has accrued a large benefit each year including for 2024.

Partner 2 accrued large benefits through 2023, received a lumpsum benefit of the large benefit in 2023 and did not receive a benefit for 2024.

Does this Plan satisfy 401(a)(26) for 2024?

I worked for Ford for 14 years and have a small pension approx $800.  I have been divorced for 20 years.  And remarried 7 years ago.  The divorce decree specifies the QDRO in it for Ford 401K which was paid out to my ex at the time of divorce, and in the decree it also specifies that the pension benefits should be split 50% with my ex-wife.  She never filed for formal QDRO paperwork for pension as far as I know.  I am eligible to commence my retirement in Nov of 2025.  So I submitted my request.  The plan admin told me that usually it takes 3 days to send paperwork to be signed in, but due to the divorce and to investigate if any QDRO exists, it will take 5 weeks.  

Does Ford GRP go ahead automatically and enforces QDRO for pension per the divorce decree, or do they have to have a QDRO paper filed?  Does anyone know?

Can she go ahead and file for a QDRO now after 20 years?

If the plan admin has a QDRO on file, shouldn't I, been noticed about it?

A client defers $23,500 as Roth in 2025 and will have an employer contribution of $46,500 ($10,500 SH nonelective and $36,000 PS.) Can he elect Roth on a portion of his employer contribution or does it have to be the entire money source for that year?  Example - he might want to have $20,000 of his employer made as Roth.  Seems that should be possible with an election form. I realize the Roth conversion option may be a better and simpler option.  

Thank you,

Tom

Has anyone tried to do the same calculation of VFCP earnings in the DOL website using an excel? I'm trying to create one based on the IRC 6621 Table of Interest Rates, IRS Factors (3-13%) | Leap Year, IRS Factors (14-24%) | Leap Year but I can't seem to get the exact amount. 

Combo plan, top heavy and top heavy provided by DC plan.

DC plan has 3% non-elective SH

DB frozen but a class of employees are excluded. There will be no =accrual for 2025.

The document states TH is provided by DC and nothing else.

What is the TH requirement for 2025? 3%?

We are the plan administrator for a client that sponsors a 401(k) plan with about 30 participants. We do not administer cafeteria plans or anything outside of qualified plans.

I know it is popular for an employer to have a high deductible insurance plan for employees and then also offer HSA to all employees.

Is it possible for just one employee to establish and maintain their own HSA? The employer will not be providing HSAs to employees.

Question:  Is this possible? If so, I would think the employee would need to meet the requirements (be covered by an insurance plan that qualifies as a high deductible policy).