I don't see anything against but wanted to make sure, is there a restriction that prohibits an in-service distribution from a 403b plan being rolled back into the same plan within 60 days? I don't think so but not 100% sure either.

 Can a forfeiture account be used to fund QNECS that cover a lost opportunity to defer (plus gains)?  

I am aware that testing corrections can be funded from forfeitures, but i was looking for clarification or consensus on QNECS to cover LOTD.

One other hanging question.... For missed matches, are they included in the ACP, posted as a QNEC/QMAC,  or  can it be a non-elective subject to the same vesting as the match source?

Seeing as how SAR's are distributed many months after the end of the plan year, to what extent do Plan Sponsors need to provide the SAR in the following instances:

1 - retirement plan where the terminated vested participant has zeroed out their account since the plan year end.

2 - health and welfare plan COBRA participant who is no longer on COBRA

We have a plan that has been frozen since 2010 and currently only pays monthly benefits.  The plan is covered by the PBGC.  They're debating terminating and are exploring the options of adding a lump sum option/window to "unload" some of the liabilities.  To use round numbers, let's say this plan has: 1 participant who is active on deferred retirement, 10 participants who are terminated but not yet at NRA, 10 participants retired and in pay status (5 of these are at RMD age).  My questions here primarily circulate around possible discrimination issues..

-If they amend the plan to add the lump sum option (without the use of a window), this would only open the lump sum option up to participants that have terminated and are not yet in pay status, correct?  Would this potentially cause discrimination issues since it would not allow participants currently in payout status to elect a lump sum?

-If we add a lump sum window for the participants already in pay status, would it be ok to only offer it to any employees who are not part of the "Top 25 paid HCEs"?  We have 3 HCEs: 2 are in pay status and the other is the active deferred retirement.

The plan is fairly well funded an probably won't have any issues with the 110% asset rule for the top 25 paid HCE's, but we're hesitant to jump right to terminating and offering lump sums and/or annuity purchases for everyone since that could potentially be a high cost.  Ideally, we'd like to stagger the payouts so we can analyze after each step.

I am preparing a Form 5500-SF for a 401k plan with only 47 participants.  The asset platform provided information for Schdule D & C.  I know I don't need to attach a Schedule C, but I am second guessing about whether I need to prepare and attach the Schedule D  to the 5500-Sf.  Thanks for feedback.  

A participant had medical expense about 3 years ago. He has not paid the bill and it is now in collections. Can he request a hardship distribution request for this expense?

Thanks.

Hi all, 

Could you help me understand two questions with regard to health insurance plans? 1. Should premiums for covered family members be counted in the premiums paid to insurers? 2. Should covered family members be counted in the number of participants? 

Thanks so much!!!

Group:

I'm drafting a Self Correction Plan (SCP) to correct insignificant operational failures

for an ESOP and looking to see if anyone has a sample (redacted?) document they are willing to share?

Also looking for robust article on SCP's its history and recent changes including

Rev Proc 2019-19? other than what I've found in my initial research.

Willing to pay if needed. 

thank you in advance.

Participant is allowed to defer more than the 10% limit that the plan allows.  Not catchup eligible.

Per EPCRS, and Excess Allocation arising from a deferral must be distributed to the participant.

What 1099R code is used on that distribution?

Sorry about the length in advance !

Plan A for Company A:  At the end of 2019 this plan matched 100% of 3.5% contributed –and was merged into Plan B.  This plan had a 2-Year Cliff Vesting program for company match dollars (0/100%).  In addition, this plan has the same automatic enrollment features (e.g., start at 3% and increase 1% each year until 6% is achieved) as Plan B.

Plan B for Company B:  At the end of 2019 this plan matched 100% of the first 1% and then 50% of the next 5%.  This plan had a 2-Year Cliff Vesting program for company match dollars (0/100%). In addition, this plan has the same automatic enrollment features (e.g., start at 3% and increase 1% each year until 6% is achieved) as Plan A.

Effective 1/1/2020, the two companies merged to become Company AB.  Effective 1/1/2020, all employee contributions were INTENDED to be matched at 100% of the first 3.5% contributed, the more generous formula.  Their intent was to transfer the money from A to B in the first quarter of 2020, but COVID happened and they delayed until the market settled down; that transfer was initiated in the Fall of 2020 and has been completed.  Now, Plan B has 100% of the money for Company AB.

However, the new Plan amendments never provided for the more generous standard----100% of the first 3.5% match. Nevertheless, all company B employees received the more generous match even though the new plan did not provide for it while it was being contributed. 

Question is can we amend the plan now under SCP to provide retroactively for the more generous match that company A and B employees both got, or must we go under VCP ?

Section 4.05 (in the SCP section) in Rev. Proc. 2019-19 says the following:

No employees were disadvantaged. In fact, former B employees benefited by the higher match—the plan just did not properly provide for it at the time. It’s also well within the 2-year period for SCP.  What do you think ?

A plan is using the safe harbor rules for hardship distributions.

A participant incurred a medical expense in 2019 and has been paying the bill off over time.  There is currently an amount still owed on the original expense. 

Two questions:

1.  Assuming the document is silent on this specifically, can the participant request a hardship for the amount of the medical expense that is still outstanding even though the original expense occurred two years ago?

2.  If #1 is a "Yes", assuming the plan document allows for additional hardship restrictions, is it acceptable to say for example, that hardships will only be allowed for an expense that occurred no more than 6 months from the date of the request?

Thanks very much.

This is a 2-part question.  Was the deadline to distribute excess deferrals postponed to May 17 this year?   Secondly, suppose an employee participated in two 401(k) plans during 2020 (unrelated employers) and funded $19,500 in Roth deferrals to both plans.  (Yes, this is a true case!)  Is there a remedy for this error or should we ALL be trying to do this???  The penalty of "double taxation" doesn't apply, so what does??

Does anyone have recommendations for getting plan materials (SPD in particular) translated into Spanish?

A quick search doesn't seem to turn up any firms focused on translating or providing ERISA documents in particular, but I thought familiarity with plan concepts would probably help provide a more accurate substantive translation.

I have a client that got a notice from the DOL regarding potential prohibitive transactions due to there being delinquent contributions during the Plan Year.  I haven't experienced this before, so can someone tell me what the fix/response is and what is involved?

Thanks in advance, I really appreciate it!

I was wondering if someone could help me with a question.  I have two doctors whose businesses do not constitute either a controlled group or affiliated service group.  They have a shared employee relationship where one doctor pays the shared employees through his payroll and the other doctor reimburses for his attributable portion of the pay.  I know the proposed regs years ago were never finalized but are a good guideline.  My question here is prior service crediting.  One doctor's business started in 2018 and the other back in the 90s.  I have one employee hired back in the 90s.  Both doctor's have a 401k plan and the 2018 company started his plan effective 01/01/2020.  Would I credit the service from the older company back to the 90s for this employee?  Or is it permissible to credit all hours of service going forward from inception of the shared employee relationship?

Thanks so much in advance for any help anyone can provide.

Employer missed the SH match for several employees in 2020.  Most of the other employees were ok.

It is a payroll-based SH Match, and therefore, the contribution must be made no later than the end of the quarter following the quarter in which the deferrals were taken.

Did they just blow the SH protection for both ADP/ACP tests and Top Heavy?

Hi

I am trying to locate a rev-proc (may be a notice) that came out sometime 2016 (if I recall correctly) where it mentioned automatic approval of valuation date for an end-of-year valuation date to either the plan termination date or switch to beginning of year valuation. Just cannot seem to find it but remember it as it was specifically addressing terminating plans.

This was something before Rec-Proc 2017-56.

Any help would be appreciated.

Thank you

We have a client with a safe harbor 401(k) plan that imposes different elective deferral eligibility requirements for NHCEs and HCEs. NHCEs may begin making elective deferrals on the first day of the month following the first day of employment or re-employment. HCEs must complete 12 months of service before entering the elective deferral portion of the plan. However, in practice, HCEs have entered the plan at the same time as NHCEs (that is, the first day of the month following the first day of employment or re-employment).

On a separate, but possibly related note, all eligible employees must complete 1 year of eligibility service to receive the safe harbor match.

We have not seen a plan eligibility provision like this before, and wonder if this provision was intended to address early participation rules and nondiscrimination testing requirements. Has anyone else seen this provision? If so, in practice have you only applied the HCE eligibility provision to 5% owners (because a new employee cannot be a HCE based on compensation that first year)?

Money Purchase Plan terminated 3 years ago.  Only accounts left are for lost participants and each has over $5,000.  Record keeper will not cash the accounts out and move to an IRA because of the spousal consent issue.

What can the sponsor do to get this plan closed up?

My ex husband requested a distribution from my pension.   He was allowed as we had signed a QDRO.  However when my employer calculated his lump sum, they calculated it for 29 years of my employment.  The QDRO that we signed said the calculation should have only been for 19 years( while we were married). So they gave my ex too much money.  What is my recourse?