Hi,

Is a Schedule A required to be filed with a 5500EZ? Thank you

Been filing 5500SF for this client, 2 owner LLC taxed as an S-Corp.  Should I now be filing an EZ?  2 owners are the only employees.  No unqualified assets

There seems to be some confusion about whether the Carrier pays bthe PCORI or the employer (sponsor)? I believe its the sponsor's responsibility.  Comments?

Hi, 

One of my client is terminating a plan that is part of a controlled group.  Company (A) is the parent company, company (b) is the entity, there will be a spin off of company (b) and once the plan is set up and funds moved from company (A) to the spin off plan, post that the plan will terminate.  Now question how do they determine what the termination will be for c ( Spin off ) plan? 

Also I believe the parent company will need to amend the adoption agreement, by removing company (b) from the document correct? 

Thanks

Simple question, a 401(k) Plan only allows for salary deferrals and a 401(k) ADP Safe Harbor Match. If eligible and assuming no outstanding loans and the total amount in his account meets the amount of his financial need, can the participant take a hardship distribution of 100% of each account?

I have a client that has 5 entities, all owned 100% by Person 1. A-E.

The 401k plan is set up under company A. Companies B-E are adopting employers.

Companies A-D are being sold on August 1. They will be 100% owned by an unrelated company from Person 1.

Person 1 will still own 100% of company E and the sole purpose of Company E will be to perform management functions for companies A-D.

Since there is no common ownership as of August 1 between companies A-D and company E, is E still part of the controlled group? Can employees of company E still participate in the plan either for the remainder of the year, until August of next year or must their participation end on August 1?

Some plan sponsors are getting calls from former participants who receive SSA letters about benefits they may be due.  But these participants are born in the 1970s!! Anyone else hearing the same thing?

Assuming a non-US citizen does not pass the substantial presence test and is classified as a non-resident alien for tax purposes, what restrictions/limitations may prevent them from contributing to a 401(k) and/or IRA? Please assume the individual maintains a US work visa and is seconded overseas while still being paid by the US entity, and they return to the US for short periods of time throughout the year.

I understand the individual must have US sourced income, but is there any firm guidance on how much? Is 1 day working in the US sufficient to classify the individual as having US sourced income and allow contribution to a 401(k)? Any special considerations if contributing as Roth vs. Traditional? Is it possible/common for a plan to specifically exclude non-resident aliens from contributing at all? Are the restrictions different for an IRA?

A participant is angry about a fund replacement decision made by his Plan's Investment Committee. He's has formally requested HR provide him with a copy of the report provided by the Plan's investment consultant advising them to make the replacement. The consultant's report was strictly for review by the Investment Committee and not plan participants. When told this, the participant got very angry and now thinks his employer is trying to hide something from him. How best to deal with this, would you provide him a copy of the report?

Assume a DB plan offers a lump sum window.  Shortly after the window closes, the plan administrator is contacted by a terminated vested participant who never received the paperwork because the address on file was outdated.  I would assume that the plan cannot now offer this individual a lump sum because it would conflict with the terms of the amendment that provided for the window (unless the plan is further amended).  However, if the plan administrator was less than diligent in maintaining current address records for its participants, I can see how they might have some culpability here (particularly given the DOL's recent aggressive enforcement in this area).

Surely, this is a fairly common occurrence.  What have others seen in terms of handling?

The simplified facts are ... A catch-up eligible individual participated in a CY 401(k) plan through September 30, 2020 and deferred $19,500.  A portion of the plan gets spun off and the individual defers $6,500 in the new plan in  Q4.  

Can I use $6,500 as catch up in the first plan and not use any catch-up in the second plan?  i.e. treat the individual as deferring $13,000 plus $6,500 catch-up in the first plan, and $6,500 and zero catch-up in the second plan.  It seems that should be fine, but I want to check if I am missing something.  Thank you!

Do we know if e-signatures are acceptable for beneficiary forms?

I have read so much I am now becoming confused..... here is the situation -

A CPA reached out to me regarding a single member client she has.  This client was persuaded to open a 401(k) by the financial advisor who quite frankly I don't think knew anything about pension plans.  Anyway, here is what happened:

She opened a 401(k) for 2020
Rolled SEP money in (lots)
Contributed to the plan in 2020
- Deferred the max (23K)
- Maxed the employer (37.5K) upon advise of the financial advisor
ONLY HAD $35,212 in schedule C compensation

All contributions made in 2020.  

Taking the excess contribution out starts with deferral money then employer? or does it matter?

Depending on what comes out.... 
1099-R the deferral... withhold taxes
1099-R the employer, don't withhold taxes, code 8P
perform the withdrawals before the 2020 taxes are filed

Thanks

I'm just curious what large plan sponsors do when it comes time to provide an updated SPD, or the SPD for a new FSA provider.  Since electronic distribution remains opt-in for welfare benefits, do most plans print them out?

I work on a plan that is an owner/spouse CB plan. The couple got divorced, and the QDRO says the AP gets X% of the owner's account balance as of a certain date.

The parties involved apparently all agreed to a dollar amount based on X% of plan assets.

However, when I look at the actual benefits as of that date, the AP should have received tens of thousands of dollars extra, if I take X% of the Participant's CB benefit as of that given date.

When I initially received the QDRO and reconciled the plan assets and determined more money was due, the attorney who drafted the QDRO came back and said there is nothing more due, because both parties received what they had agreed on.

I'm curious if anyone has opinions on this. I'm thinking it's a case of a poorly worded QDRO and/or a misunderstood attorney, but I suppose I let it go if everyone's happy? Are there legal ramifications to be wary of here? Or maybe the QDRO is perfectly fine, and the way they have handled everything is okay? Thanks in advance.

Two person Solo 401(K) for a Husband-Spouse Partnership LLC.
Filed 5500-EZ first time for 2019 as the plan assets crossed $250K first time.
Closed the LLC 12/31/2020 since could not sustain due to Covid-19. As of 12/31/2020 there were assets.
In June-July 2021 Rolled over to IRA for one partner and Transferred to workplace 401(K) for the other partner with a W2 job.
There are trailing dividends coming through.

When do I file the final Form 5500-EZ?
File 5500-EZ for year 2020 as Final OR File 5500-EZ for year 2021 as Final, with 2 participants [5a(1)&a(2)]at the beginning of the year 2021  and zero [5b(1)&b(2)]at the end of year 2021? If Final has to be for 2021, what is the deadline?

Thank you!

A client opened a new 401(k) plan 1/1/2021.  The plan has immediate eligibility for those employed as of 1/1/2021 but excludes part-time/seasonal/temporary (those scheduled to work <1000 hours).

I am going to ask them to confirm who they determined met eligibility and provided enrollment material.  As TPA we can't make that determination not knowing expected hours.   

Probably an easy question - what about someone who is not scheduled to work 1000 hours in 2021 but has worked 1000 hours in a prior year?  I think they should have been enrolled as all service would have to be considered.  Normally any new plan without the part-time exclusion would include prior year 1000 hour employees as eligible so I believe I have my answer.

Thanks

Tom

An ERISA rule—29 C.F.R. § 2550.404a-5—calls an administrator of an individual-account retirement plan that provides participant-directed investment (even if no fiduciary seeks ERISA § 404(c) relief) to furnish regularly a disclosure document that meets several requirements specified in the rule.

Although the rule’s command applies to a plan’s administrator, for most plans a recordkeeper or other service provider does the work—not only in delivering the notice but also in assembling the notice’s investment-related information and other disclosures. 

What happens if a plan’s administrator wants the delivery service but not the assembly service?

Imagine that a plan’s sponsor/administrator is unwilling to adopt its recordkeeper’s standard 404a-5 notice.  And using the part the recordkeeper allows its customer to customize won’t fix the problem.  The customer is willing, at its effort and expense, to write its own 404a-5 notice, retrieve and insert the investment information, and deliver to the recordkeeper by a sharp cut-off date two days after each quarter-close, the print-display file of the 404a-5 notice to be delivered.  The page count and other technical points conform to what the recordkeeper does normally.  The plan’s administrator accepts responsibility for its communication, and the sponsor/administrator exonerates and indemnifies the recordkeeper for relying on the administrator’s instruction.

In your experience, does a recordkeeper:

deliver the customer-prepared notice?

refuse to deliver an outside-prepared 404a-5 notice because doing so would be too much disruption to the recordkeeper’s work methods?

Does the response vary with the size of the customer?

If so, how big must a plan be to get this delivery service?

Our plan currently has a safe-harbor enhanced match allocated each pay period with no true up at the end of the year.  We now wish to do a true-up at the end of the year.  The plan document provider says to amend the plan now to provide for the match allocation to be at year-end, with pre-funding per payroll period, rather than having the plan provide for a per-pay period allocation, with a true-up at the end of the year.   Is there a difference between the two approaches?  Thanks.

Does anyone have a copy of RevProc 2021-30 with page numbers in the Table of Contents?