We have several employees who terminated this year (7/31/2020) and as part of a severance agreement their H&W benefits were continued including health FSA

1 of the employees severance benefits continue into 2021

We offer changes at open enrollment . Should we offer him the opportunity to do health FSA for 2021?

Does anyone see an issue for post July 2020 healthcare FSA deductions being allowed.

Much thanks

Alexa

Has anyone seen a good source or webcast that addresses specifically what changes from Bipartisan Budget Act, SECURE, and CARES apply to 457(b) plans, and what amendments are required, and when? For both Governmental and tax-exempt plans?

Hi

Having a bit of brain freeze again.

Current plan has only 401k and SH provisions. Effective date of the plan is 2017.

Planning to add PS provisions for 2020 (never had before).

As with the addition of the PS provisions and the vesting for PS, can the plan exclude service for PS portion? i do not think so as this is an ongoing plan but just curious if I missed something here.

Thank you

Is there a rule that the change to 3% Safe Harbor has to be by October 1 for "new" plans but December 1 for existing plans?

If that's the case, what's the definition of a "new" plan?  If we have a document for a Plan Year starting 1/1/20, when do they have to make the 3% decision by?

Thanks everyone

In a safe harbor 401(k) plan (non-QACA), is it permissible to have different definitions of compensation for deferrals and safe harbor matching contributions? For example--for purposes of deferrals, compensation is defined as all compensation within the meaning of Code §415(c)(3), including bonuses. For purposes of calculating the safe harbor matching contributions, bonuses are excluded.

Is that allowed?

Participant in plan that has brokerage accounts took a distribution of all her funds in 2019.  We are just finding out about this like last week.

She took the money to herself and there was no withholding.

Is there a penalty for not withholding?  How does it get assessed?

I know there's gonna be a late fee for the tardy 1099-R.

New subscriber here. In a safe harbor match plan, a previously full time employee that now goes part time can continue to defer AND receive the safe harbor match. However, Im not sure if this is the case with a NON-Elective 3% safe harbor plan? This same employee can contunue to defer BUT are they still entitled to the end of year 3% non-elective? TX

Did the CARES Act change the requirements/ability to make changes to your Safe Harbor Plan?  A client asked me this, thinking a change could make up to December 1.  I don't seem to see it in the regulations, but just wanted to clarify.

Thanks!

Retiree has multiple Roth IRA annuities with lifetime income riders.  Retire wants to start lifetime monthly annuity income streams, and have it deposited to his Roth (non-annuity) IRA (as a direct trustee-to-trustee transfer) to continue sheltering earnings from taxes, until the funds are spent for living expenses.  While payer custodian is willing to do the transfers, they insist that  each monthly transfer request for each contract be accompanied by a fresh Letter of Acceptance from the payee trustee.  They say that IRS "requires" an LOA for each transfer and that a standing LOA is not permitted.

I've done some research on this - IRC Section 408, IRC Section 402(f), IRS Publication 590-B, IRS Form 1099-R Instructions, IRS website, etc. and can find nothing about an LOA requirement.  I can't access it, but I'm pretty sure that Revenue Ruling 78-406 (1978-2 C.B. 157) introduced the direct transfer concept and elaborated on the distinction between a direct transfer and a rollover.  Don't know if there's anything in it about "required" LOA's.

As you can imagine, with multiple contracts and monthly transfers, it's burdensome on the retiree and also on the payee trustee.  It's definitely got to be painful & expensive for the payer trustee to process these monthly transfers manually as one-off transactions.

Can anyone confirm or dispel the myth of IRS "required" LOA's for direct transfers (with cite)?

 Thanks for your help!!

Mimecast has a feature whereby it scans outgoing emails for SS#'s.  The problem is that there are too many false postives, the most annoying of which is that it seems to scan even things like peoples Facebook links.  So there are some clients every time I email them I have to delete their signature to avoid getting bounced.

Is that commonplace with all of these tools?  Is there a better mousetrap out there?

Wanted to see how others are handling this. Client is invested in Mutual Funds (A Shares) in their Qualified Plan. They take a loan for $20,000 and start making repayments on the loan. The repayments are reinvested into the A shares but they are being assessed the Sales charges associated with A shares. Do others follow this process or do you not charge the Sales charges associated with A Shares?

I assume the IRS has made a decision about whether or not they will extend the Auto Enrollment missed deferral corrections in ECPRS which sunset at the end of the year.  Has anyone heard what that decision is? 

Two different employers run separate 401k plans under a controlled group and the transition rule is ending soon. Is it correct that if the plans continue to operate separately, they won't be pulled together at all for testing purposes if the plans independently pass testing on their own?

If yes, it seems both could be Safe Harbor with different matching formulas and could stay separate and pass all testing. Too good to be true?

Prior to the SECURE Act, plans could choose which beneficiaries to apply the 5-year rule to. The default was to only nonperson nonspouse beneficiaries. Some plans would apply it to all nonspouse  beneficiaries. With the SECURE Act, can plans apply the 10 year rule to all nonspouse beneficiaries, including eligible designated beneficiaries (EDBs)? Or must EDBs receive RMDs starting the year after death?

Hi

Having a bit of brain freeze.

DB/DC combo, both plan t/h. DB does not provide t/h and also no t/h for key under DC. Plans tested together

I have owner, a non-owner HCE and NHCE, total 3 participants.

Non-owner HCE gets 0.05% in DB for 401(a)(26). NHCE is only covered under DC.

For 2020, gateway requirement is 5%. The owner does not want any PS allocation and will only get 3.5% of compensation as AB in the DB plan.

Under gateway, NHCE gets 5% in DC.

What is the minimum t/h I have to provide to the non-owner HCE under the PS plan?

3% or 3.5% or 5%

Thank you

Does anyone know what the repercussions are for failing to include a Schedule SB? Is it similar to failing to include an auditor's report on an audited plan and the client will receive a letter from the DOL providing 45 days for the client to correct the filing?

Does a 412(e)(3) Plan get an extension to 12/31/20 to make a 2019 Plan contribution, and, if so, does the Plan have to file a 5500 by 10/15 not showing the contribution or is it extended also. 

Thanks all.

Hoping someone out there has also experienced a DB plan termination (covered by PBGC) where the investment firm has refused to cut checks to participants who are on the US Treasury's OFAC (Office of Foreign Access Control) list, presumably due to drugs or terrorists involvement.

In our client's case there are two participants, total lump sum = $110K.  The participants are working with an attorney who has signed distribution election forms on their behalf.  One or both of these individuals are no longer in this country.  They both have elected a lump sum payment.  Not sure that the PBGC missing participant program is a viable option since they are not missing.  In addition, the client is not happy that the cost under the missing participant program = $135K rather than the 110K lump sum amounts.

Does anyone have a suggestion.  The client wants to close out the plan as soon as possible but does not want to end up with a legal nightmare.   

I have a few clients who signed Profit Sharing documents for 2019, but due to COVID opted not to make their contributions and instead plan to start in 2020.  Since there were no contributions in '19 and the assets are $0, is it necessary to file a Form 5500 with $0 assets?

Thanks!

Are you able to freeze a 412(e)(3) Plan that is fully funded with life insurance and annuities?

If so - what about the premiums that are required?