A foreign company sponsors a 401(k) plan for some of its employees who are US citizens living in a separate foreign country.

415 limit deadlines are based on when a company's US tax return is due correct?

So how does one determine the deadline for non-safe harbor contributions if the company sponsoring the 401(k) doesn't have a US business tax return to file?

I'm hoping to avoid looking through treaties. But it is 2020...

An old agreement was never updated and has some definitions that do not comply with 409A (CIC, separation from service).  Executive has separated from service and is receiving installment payments (in year 4 of 5).  I assume the arrangement still needs to be corrected under the plan document correction procedures? Is that correct?

What about a scenario where the benefits are entirely paid out when the failure is discovered? 

Thanks in advance!

Assuming the DB allows it, Can a 401(k) or PS account be rolled over to a regular DB or a 412(e)(3) and the funds remain segregated? I'm particularly concerned with the rollover to a 412(e)(3).

A small firm wants to start a 401-k plan with salary deferrals but all are 1099 employees.  Are they able to do salary deferrals?  Would they have to "take" a salary to make a deferral?  Thanks

We have two entities owned separately by husband and wife that are under common control due to a minor child. Minor child will be 21 mid-2021. At that point, ASSUMING no other attribution rules apply for the spouses (no ownership in the other entity by either or management/oversight, not in a common law state, etc.), can a plan be opened after the child's 21st birthday with an effective date of 1/1/2021? Must it have a short plan year or fiscal year beginning after the birthday since the entities were under in a controlled group at some point in 2021?

I'm struggling a bit with the proper use of the VCP submission forms. The 14568-B doesn't seem to quite "fit" a 403(b) plan that had a written plan document, yet failed to restate by the extended deadline this summer. https://www.irs.gov/pub/irs-pdf/f14568b.pdf

Has anyone else submitted one of these yet, and if so, with any results? It appears to me that you'd have to check Section I(A) last option (other). "B" does not appear to apply, and Section II(B) doesn't appear to apply either. 

Looks like you'd check the Section 1(A), describe them as a nonamender, and include signed updated docs and any Amendments. Am I missing something obvious here?

Thanks.

Our firm is interested in strategizing on best practices for pursuing robotic process automation into our TPA practice.   Do any of your firms currently utilize BOTS and if so, how did you get started? Do you have internal staff who were able to write/program basic bots or did you utilize the services of a different firm/contractor to learn your processes and write these for you?  Do you have firms you could point us to that would explain their practices so we can begin pursuing this type of automation in our firm?  Any direction you may provide is greatly appreciated as we begin to explore what works and doesn't work and what will be most beneficial for our firm.

Thank you!

I have a client who is being purchased by another entity, effective 11/16/2020. As these things usually go, we were just notified a couple days ago ? The seller (our client) sponsors a 401(k) safe harbor match plan. The buyer has required that the existing plan be terminated, prior to the effective date of the sale. Accordingly, the plan has an 11/15/2020 termination date. Our client runs monthly payrolls at the end of each month; the last payroll was 10/31/2020 and the next payroll date would be 11/30/2020.

My question is this - Is there any accrued benefit cutback issue with employees not being able to make deferrals and receive safe harbor matching contributions on the first two weeks of November? Or, is there no issue since the payroll date for that period of work falls on the other side of the sale/termination date? Does it make sense that the benefit isn't considered accrued until the payroll date? If so, I would assume it would follow the same logic as a plan who ends the safe harbor provision 12/31/2020 and then processes a payroll with a January 2, 2021 payroll date (without safe harbor). I just don't feel confident applying that logic to a plan termination without a rule to tie it to. 

On a call with a huge recordkeeper (TIAA) who is taking the position that participants who elected a loan payment deferral  don;t have to make any payments for a full year.

I personally read the law to say that payments due in January are  NOT extended.  I think its nuts that not everyone is on the same page on that...  I think there is near universal agreement on that but I assume TIAA paid a "pretty good" ERISA attorney to advise them on that policy...
 

Hi, Owner only DB plan received letter that his plan has been selected for examination. The exam seems to be just that the IRS did not get his EZ for 12,13, and 2019 (for location and date it says N/A). The agent says that he should file the missing EZs with the delq. program, however, it must be sent to the agent (as opposed to filing directly DELQ. program). The 2019 was just  filed on October 15th, 2020. The other years as well. I recall that there was mention that there isn't anyone at the IRS location to process the 2019 EZs.  Thank you.

Umbrella company has several adopting entities included under the same plan.  Not a MEP, just a controlled group of related LLCs that all participate in the plan.  One of the business units budget has been hit hard due to Coronavirus, while the others are still doing well.  Is it possible under these circumstances to suspend the match for 1 entity but not the others?

Hi

With all the changes going on, want to confirm the following just to be on the safe side:

If a new plan for 2021 with SH provisions, has to be set up by 12/31/2020, correct?

If a new plan but no SH provisions, can still add SH for 2021 by December 1, 2021, correct?

Last, for a non-elective SH, unless I want to have a "may be" provision, no need for a notice, correct?

What is the HCE's are excluded from SH, is not providing a notice still an option?

Thank you

The Labor department’s rule about an abandoned individual-account retirement plan defines a qualified termination administrator as a bank, trust company, insurance company, or other person eligible to serve as an IRA’s custodian that “holds assets of the plan that is considered abandoned[.]”  29 C.F.R. § 2578.1(g)(2).  The rule does not say that a QTA must hold all, or even substantially all, of the plan’s assets.

Imagine an abandoned plan for which no QTA-eligible company serves as a trustee.  There are multiple custodians.  Imagine one would volunteer to serve as a QTA, but only for the assets held by that custodian.

Has anyone seen a situation in which the Employee Benefits Security Administration approved, or did not object to, a submission in which a QTA proposed to wind up a portion of a plan to the extent of the assets held by the QTA?

Let's say a participant separates service, leaving behind a $15,000 balance, of which $5,000 is an unpaid loan.

After the loan policy's prescribed time for repayment passes, can that loan be offset immediately if the plan document only allows for lump-sum distributions to terminated participants and there has been no request from the participant for a termination distribution?

I didn't want to add a ton of hypothetical detail to muddy the waters. I apologize if there's not enough here of if this question has been previously discussed.

Does a loan offset count as a distribution such that it can't happen on its own if a plan document only allows lump-sum distributions?

Thanks.

My ex (divorced) and I both work and will be splitting physical custody (50/50) of two children.  We plan to alternate some of the nights such that the child we're claiming will be with us >50% of the time..  Both of our employers offer DCFSA, are we both allowed to open an account if we're claiming one child each?  Both kids will be under her health insurance if that applies to anything.

I am starting to see questions from employers who laid employees off this year due to COVID and are planning to hire them back as to whether they can voluntarily grant accrual service for the period of the lay-off.  (Note:  The terminology seems to vary by employer and state, but I'm talking about a situation where there was actually a termination and rehire, not an unpaid leave where the individual remained employed.)  Even though the employers are trying to do a nice thing for these participants, granting service for a period of nonemployment strikes me as an exclusive benefit violation.  I have to imagine that others are seeing this question as well.  Thoughts?

Participant comes into plan sponsor and says I am NOT repaying this loan any longer.

What is a plan sponsor/trustee to do?  That's it.  That's the question.  I'll be darned if this question has ever been answered.

The SECURE Act changed the RMD for surviving spouses to the date the participant would have attained age 72. (401(a)(9)(C)(I).

What is the effective date?  The Act says that the effective date for the age 72 change is participants who attain age 70 1/2 on or after 1/1/20.  (The effective date for the stretch rules is participants who die on or after 1/1/20).  So what about participants who died before 2020 and who would not have reached 70 1/2 by 1/1/20?

Assume a participant who died during 2019 at age 68.  Does his spouse get to wait until he would have attained age 72, or because he died before 1/1/20, does she have to take when he would have attained age 70 1/2? 

ERISA § 104(b)(1) calls for a summary of a new or changed plan provision “not later than 210 days after the end of the plan year in which the change is adopted[.]”  (Quotations from the statute and rule are in a recent BenefitsLink discussion.  https://benefitslink.com/boards/index.php?/topic/66810-rmd-2020-waiver-and-sample-amendment/&tab=comments#comment-308944)

For some provisions, taking that long time (and not communicating sooner) could result in describing a provision after every participant no longer has any decision she could make.

Just to pick one example, if in March 2020 a retirement plan’s sponsor adopted a provision for a coronavirus-related distribution, a summary of material modifications furnished in July 2021 might describe a provision that expired a half-year ago.

BenefitsLink mavens, what do you think:  Should an SPD or SMM describe a provision even if the description is no more than history?  Or is it better to describe the changed (and expired) provision, even if including the description confuses or otherwise burdens a reader?

For this question, assume the plan’s sponsor/administrator has yet done nothing to communicate the new or changed (and now expired) provision.

Participant turned 70-1/2 in 2014 and had a required beginning date of April 1, 2015.  She died April 4, 2015, 3 days after her RBD, without taking any RMDs.  An RMD should also have been made for 2015, the year of the participant's death, but was not.  The participant's account remains completely undistributed because no one was paying attention to it until now, and there is a designated beneficiary.

Can the entire account be paid to the designated beneficiary or must the RMD amounts for the 2014 and/or 2015 distribution calendar years be paid to the participant's estate?  If the estate, any idea of how, if at all, to adjust for earnings, etc.?

Also, it has been suggested that the 2014 and 2015 RMDs be paid to the estate and leave the estate to file Form 5329 and ask for abatement of penalties with respect to those amounts.  But we also have missed RMDs for 2016 - 2019.  Regardless of whether the estate is entitled to part of the account, wouldn't it make more sense, and have a better chance of success, if the plan were to file under VCP both to correct the operational failures due to the missed RMDs and to obtain relief from RMD penalties?