The recently e-disclosure rules do not seem to apply to Health & Welfare plans.  So providing SPD's, SAR's rely on the old method?

Anyone remember the song from the '50s "Heartaches"?

"Well, here we go again"

Concerning the PPA restatements, a question was asked about fees, specifically "what is the range TPAs are charging for the documents.

EBRI published their survey on fees charged for the PPA restatments, broken down by prototype, volume submitter and IDP; with highs and lows for each.

I seem to recall the individual who posted the question (and it could have been me), was totally blasted for having the audacity to ask such a question.

Comments like this is a conflict of interest to discuss fees, this is unprofessional, this is against our code of conduct, and something about a servicing agreement.

All we are looking for is a range.  Something like "we have seen" a range of X-Y.

How is that unprofessional, when we are retirement plan professionals asking one another?

How is this counter to the Code of Conduct when we are not only speaking among ourselves and not mentioning a particular client?

Certainly we are not providing documents to our clients out of the goodness of our hearts, not any of us a re charitable institutions; and I'm sure none of us want to charge a fee so high that a client or prospect will walk away.

Just a range - what's the harm?

Like most TPAs we have a combination of record keeping platforms and brokerage account clients.  Distributions for record keeping platform plans are certainly easier.  brokerage accounts and DB plans not so much.

Is anyone willing to share some processing tips?  The force out process is VERY time intensive - identify, send communication with forms, returned to sender, use locator, send again, and then when no response, send funds to IRA or issue check to last known address, and then deal with uncashed checks.

I'd like to get the distribution form and tax notice for all plans into the hands of the client (and online instructions when applicable) so plan sponsor can hand out at last day of employment.  Therefore, the notification has gone out and they can be forced out say in 60 days to be safe.  Still could be lots of follow up.  We do almost all the work here but I'd like to shift as much work to the plan sponsors as possible.  Reason - almost can't charge enough for handling distributions.  We also issue distribution checks, deposit taxes and prepare 1099-Rs for those not on record keeping platforms.

Tom

I see a few prior threads on this, but wanted to see if there have been any changes in opinion.

If a plan sponsor makes a corrective QNEC for missed deferrals before the participant starts deferring for the year, does the QNEC count toward the participant's 402(g) limit? For example, the plan sponsor fails to implement a deferral election from January through June and corrects using the 25% QNEC. Say the deferral would have been $8,000, so the QNEC is $2,000. The participant's correct deferrals start in July. Can the participant still contribute to the full 402(g) limit, or the 402(g) limit minus $2,000?

EPCRS seems clear that the opposite fact pattern (participant has deferred, then error is caught and QNEC made) requires limiting the corrective contribution to the 402(g) limit. But no rules or examples in EPCRS apply to the QNEC first then deferrals.

Would appreciate any thoughts.

We have a client with a lot of employees who elect additional income tax withholding.  The forms provide that employees are to specify the amount of additional withholding per pay period.  However, some employees instead put down a figure that they intend to be their entire year's withholding.  The result is that so little is left in each paycheck that 401(k) deferrals are limited by the absence of any paycheck to defer from.  And surprisingly, this occurs often enough that it's impractical to manually check and fix the issue, and employees sometimes don't notice and correct the error right away.  

Does anyone have any experience with whether it will be treated as a plan qualification error if the client does not withhold and defer the  percentage of compensation elected by the employee because there is not enough money left after taxes from which to deduct the funds? I've heard rumors that this was a JCEB question (never answered) some time back, but have been unable to find it in the online JCEB materials.

I have an owner only CBP that invested plan assets in collectibles (art and watches). They are held in a vault, so as I understand it there is no PT for personal use by a disqualified person, however, I believe the rules for self-directed accounts apply in this case and upon the purchase of the items, a deemed distribution occurred. I'd appreciate thoughts and commentary from others.

Investments in Collectibles in Individually Directed Qualified Plan Accounts _ Internal Revenue Service.pdf

A participating employer in a 401(k) plan is being sold via a stock sale (will no longer be in the controlled group).  Employer contributions in the 401(k) are subject to a vesting schedule. 

Will the employees of the participating employer who participate in the 401(k) plan end up forfeiting non-vested amounts?  There won't be any partial plan termination. 

Thanks in advance! 

I have a prospective client who established a Solo 401k for him and his wife last year.  He did not fund it.  Turns out he has a part-time employee who was eligible.  There is no hours or service requirement.  Document preparer said that is their default when completing documents.  He doesn't mind paying a safe match contribution to the employee, but the issue is that she was not offered the opportunity to defer.  But how do we correct for the missed deferral opportunity when nobody deferred?  

is it possible to correct the original plan document to align with the client's intention?   Retroactive amendment? 

Can we just pretend the plan never happened since it was funded or filed with the IRS?  (just kidding)

Hi

Looking into a cb/dc combo for someone - both the sponsor and plan years are fiscal e.g. 7/1/2020 to 6/30/2021. Never worked on fiscal combo before.

DC has 401k + 3% non-elective safe harbor + profit sharing provisions.

A theoretical question:

The participant defers max for 2020 from 7//1/2020 to 12/31/2020 and max for 2021 from 1/1/2021 to 6/30/2021. So defers 39k within 12 month period. Salary and election to defer maximum from each paycheck - very high #.

Based on above, I should be checking for the following:

• Full 39k is included in the 410b testing
• Only one catch up? I have no idea on this especially if does catch up twice within one plan year.
• As the 415(c) limit is annual and within the plan year, the 58k limit is reduced by 39k of deferrals + 3% safe harbor this leaving very little for profit sharing (assume limitation year is plan year). So more goes to 410(b) and less goes to 401(a)(4).

Am I missing anything?

As someone mentioned during Derrin Watson's webinar last month, fiscal plans should be illegal especially with 401k features.

Thank you

It is my understanding that plan sponsors will be reimbursed for the COBRA subsidy through a credit against quarterly payroll taxes.  With a multiemployer plan that uses a TPA, there are no payroll taxes against which to take a credit.  How does the plan gets reimbursed?  Do they need to fill out the tax form and just put 0 for the payroll taxes owed?

What are your thoughts on whether an ERISA plan can participate in a private equity fund that invests in a medical marijuana processing company?

Has a PPT occurred if a government contract was canceled resulting in the involuntary termination of employees?  We are having discussions about the sale of a division and the result of a PPT. Does the fact that a government contract was canceled trigger a PPT?  It did not affect more than 20% of the workforce. Does it matter if more than 20% were let go? We think that would be a "no brainer" and if more than 20% were let go, we would recommend a PPT.  The cancelation of the government contract was not COVID related so we do not believe that the COVID relief applies. Thank you.

So my question is concerning an employer who would like to give his employees money when the plan starts (after meeting the eligibility requirements). This is a 401(k) Profit Sharing Plan, and this would be money that he is giving them as bonus or profit sharing from prior work they have done. Is this possible and are there limitations on how much he can give to each employee? The employer would like to give the employee that have been with him the longest a little more. I'd appreciate any feed back. 

Sorry, apparently I submitted this twice. Once is enough!!!

Long story short - participant loan apparently defaulted in 2018. Started making payments again in 2019, but should have been a deemed distribution.

Too late to correct under SCP, but can be corrected under VCP, as per RP 2019-19, Section 6, .07(3)(d).

Here's my question - the person involved is the company owner. Has anyone submitted under VCP in such a situation, and was there any problem with the IRS not approving it because it was the owner/fiduciary who defaulted?

Is a Plan Sponsor offering only Group MEC coverage to an eligible ICHRA Class of employees, also allowed to offer an ICHRA to that same Class of employees, since Group MEC is not Traditional Group Health Coverage (MVP), (only MEC), nor an Excepted Benefit under ICHRA Rules?  Same for offering the same ICHRA Class of employees both ICHRA and Group GAP coverage which covers a stated $ benefit amount of Deductible and Coinsurance?  Thanks, as I have been asked both, but can not find a definitive answer.

Reading a previous question, I just want to make sure I understand this. I thought that if a participant had an outstanding loan and they obtained a qualified event like the plan allows for early distribution, that the participant would be able to offset the remaining outstanding balance of the loan due to qualifying event. So if John was 58 when he took a loan for $10,000, after a year and half, he decides that he wants the remaining loan balance (say it's $7400 now) to be offset because he's now 59 1/2, I thought that was permissible. Am I wrong?

Two employers (A and B) under same control group each have separate plans (Plan A and Plan B).  Plan A terminates because employer A shuts down and many participants start working for employer B.  Most participants rolls assets from terminated Plan A into Plan B.  Plan B has predecessor language for eligibility and vesting for participants from Plan A.  They were given opportunity to take their balance or rollover to IRA or another qualified plan.  Question:  Are the rollovers from Plan A into Plan B considered "related" rollovers for top-heavy testing?

Owner does not want to complete beneficiary form because his spouse is his primary beneficiary and he has completed estate planning that his children are contingent for all accounts. 

Am I correct that a plan specific form needs to be completed so that the children would be considered contingent, otherwise should spouse predecease or owner & spouse die simultaneously, the plan's benefits will go to the estate rather than to the children?

Our client had a cash balance and profit sharing plan effective 2015. There was no 401(k) component, it was all employer money.

In 2020, they had an offer and thought they had sold their business, so they terminated their plans effective 12/31/2020 and assets were distributed. The deal fell through, and they'd like to put in a new CB and PS plan as of 1/1/2021.  Their payroll company is saying they can't do the PS plan, because they need to wait a year due to the successor rule. Is this true, if there was no 401(k) in the original plan?

Thanks - 

Sue