Background:

A 401(k) plan had a safe harbor match provision with a 1 year (1,000) eligibility requirement when it was established in 2014. It has been TH for all year including the 2014 plan year.

There was a one time eligibility requirement waiver amendments in 2016. Because of the eligibility waiver, an existing employee (EE1) who works under 500 hours each year entered into the plan in 2016. However, this employee never deferred any 401(k) money to receive any safe harbor match.

The plan was amended in 2018 changing the safe harbor match to 3% safe harbor non-elective when the employer established a Defined Benefit plan in addition to this existing 401(k) plan. The eligibility requirement stayed the same (1 year of service) with 3% safe harbor non-elective allocation requirement of 1,000 hours during the plan year. the The aggregate plan has been TH for all plan years.

Question

Is this safe to assume the 401(k) plan was exempt from TH from 2014 through 2017 if the only contribution were deferrals and safe harbor match regardless of the one active employee who never deferred didn't receive any matching contribution?

Is this also safe to assume the aggregate plan is not exempt from TH starting the 2018 plan year because of the DB accruals?

If so, do I have to determine the plan TH status as of 12/31/2017 while the plan had deferral and safe harbor match contributions only (assuming calendar year plan) for the plan year beginning 1/1/2018 and provide TH min for EE1 for 2018 plan year and there after?

Or, do I have to determine the plan TH status as of 12/31/2018 as the aggregate plan had additional contribution besides deferral and 3% safe harbor non-elective (DB accrual) for the plan year beginning 1/1/2019 and provide TH min for EE1 for 2019 plan year and there after?

My biggest confusion is when should the TH min should start 2018 or 2019?

Suppose an employer had a 3% safe harbor nonelective 401(k) plan in 2020 with pro-rata profit sharing. In 2021 they adopt a scond plan, a new PS plan, retroactively to 1-1-2020 and it has each person in their own rate group. Can this new plan offset the minimum gateway by the 3% safe harbor nonelective provided to those same participants in the 401(k) plan?

Hi

Looking for advice for the scenario below:

I have an participant who is requesting a medical hardship and submitted a bill/invoice dated August 2, 2012 listing an amount due but no due date.     What is the acceptable timeline for this type of supporting documentation?    I thought only bills could be submitted for a 6 month time period or future medical treatment that is not covered or reimbursed by insurance.   Currently, I have required the participant to provide a current letter from the hospital stating the amount owed, due date, and confirmation that no further payments were or are being made to this invoice.

Any advice would be greatly appreciated.

Thanks

An employer wants to pay for all the participant related fees, so that no fees are taken from employee account balances.  However, they do NOT want to pay for the participant fees once the employee leaves employment and becomes a former employee.  If the employee fails to roll out the 401k account balance, the fees will be taken from their account.  

Anyone see any issues with this?  Is there guidance / best practices around this?

Plan uses a common record-keeper/custodian that also processes participant loans online. Principal. 

The plan assets consist of only deferrals and safe harbor match(100% vested, not QACA). The plan's loan policy restricts the loan proceeds source to just deferrals. Well, I suppose that's how my interpretation has always been of this particular policy language.

"Source of Loan. Participant loans are may be made from all available contribution sources, to the extent vested unless designated otherwise under this section." 

For this plan it is designated otherwise and specifies that only Pre-tax Deferrals and Roth Deferrals are eligible. 

John Doe participant has the same amount of $ in deferrals and SH match. The record-keeper is unable / refuses to process a loan for 50% of the participant's vested balance (essentially 100% of the deferral balance). They are insisting the only way it is possible would be for the plan to amend it's loan policy to allow loan the loan to be take from all sources. 

I disagree. Loan source restrictions on proceeds are common, for a variety of reasons, I see it done a number of different ways. What I don't usually see (maybe have never seen) is a source restriction on the 50% max value part of the calculation. I don't even think that is allowed, but I'm not able to find a citation. I remember the days when sponsors had two plans, a money purchase, and a separate 401(k) PS, and we would aggregate the balances between plans for the 50% calc, even though the loan was only allowed from the 401(k) plan. 

Am I wrong? 

If I'm right, does anyone have suggestions for pushback to the provider? Citations? 

I am working with a doctors office and their 401k plan.  They currently have a One year of service/1000 hours eligibility requirement to enter the plan.  However, they would like to change that to 6 months elapsed time requirement for new doctor hires.  The new doctors would not be owners.

If the new doctors make less than $130,000 (2021) and are not HCEs in their first year employment, then there would not be a discrimination issue for 2021, is that correct?

What if in future years their earnings are above the HCE dollar threshold?  Is that something that could be viewed as discriminatory a year or 2 after they are hired?  I would not think so since I think any eligibility discrimination would be applied in the year of hire.  But I wanted to check if that is correct?

Thank you

401(k) Plan terminates a/o 12/31/20.  Two payrolls are receivable a/o 12/31 and hit the participant's individual brokerage accounts in January.  This is a partnership with Safe Harbor 3% NEC, so partners' shares and 3% amount are TBD.  All rollovers/distributions are in process with a hopeful close-out date of 2/28/21.

I don't think I can do a Final Return for 2020 showing "liabilities" to zero out the ending account balances, especially when partners' final number is unknown.  I think the final is a 2021 Form 5500.

Anyone disagree?

Active employee is being told that she must take a 17 year retro payment of her CB Plan because she was earning more on her Interest in the plan than she had made in her best 3 years that ended in 2004.  IRC 415 was mentioned in this case.  She is well past retirement age because of being covered under the old workers comp rules from the 80's.  They are offering her a Single Annuity option of much more money than is being offered as a Lump Sum payment due to her not receiving payments since 2004, along with interest and penalties I believe.  If she takes the Single Annuity option she will continue to receive a monthly annuity for life along with this retro payment.  All 10,15, and 20 year options would have to be started as though it was 2004.   What options do I have with this retro payment?  Can any of it be rolled into a Traditional or Roth IRA?

I have a DC plan terminating at end of its current fiscal year in June 2021. Any thoughts as to whether it needs to be restated before terminating? I am thinking that it may need to be.

Hi, 

Is SAR sent to anyone who had balance in the plan that fiscal year or to everyone in the plan, however do we determine who should be receiving the SAR. 

So, plan termination date is 9/30/2020. They will now be restating to the new Cycle 3 document, to keep everything clean. What date would you use as the restatement date? 9/30/2020? Other? I'm not really sure on this. Ultimately may not matter that much...

Hello,

Helping someone who has a Traditional IRA at one company and has a Solo 401k plan with Fidelity (I think its called Keogh Plan but it is a self-employed 401k).

He's trying to consolidate accounts at Fidelity who tells him that he can move assets from Traditional IRA to the Keogh Plan as the Keogh Plan is a Qualified Plan.

Is that correct? 

Can he do that?

What are the pros and cons of doing this?

Thanks

We have a client who currently sponsors a 401(k) plan but would like to convert it into a 403(b).  Is that something that can be done through a simple restatement of the Plan Document?  Or would we need to terminate the 401(k) and start a brand new 403(b)?

Thanks in advance!

Example-  I have an ESOP plan that includes a 401k deferral feature.  The employer would like to remove the deferral feature, including all the deferral assets and close the accounts.  Is it possible to write the partial plan termination amendment to terminate only the deferral portion of the plan that would create a distributable event for the participants?

A Non-ERISA 403(b) plan sponsor would like to stop sending plan contributions to one of the investments for this plan.  Is this a permissible action for this plan sponsor or an action which will endanger the plan's Non-ERISA status.  (The issue is not about terminating the investment arrangement nor is it about moving the plan assets to another investment.  The plan sponsor simply wants to stop sending plan contributions to this investment.)

I have told the sponsor that this is too close to the "line" and that I would advise against it, but I cannot find an authority which confirms this advice.

Thanks

PNJ

If Plan B (small plan) is merged with Plan A (large plan) would the Schedule of Reportable Transaction be required to be filed by Plan A if merged assets exceed 5%?

I'm thinking it would not be required because Plan A is the receiving plan.

investment advisor who manages some assets on a discretionary basis and some assets on a non discretionary basis.  purchased an ERISA Bond as fiduciary who "handles assets" for the discretionary group of plans.  Subsequently it is determined the RIA has custody of all the plan assets it manages by virtue of its ability to authorize and initiate third party distributions and payments.  the question - is custody for this reason comparable to handling assets under ERISA?    

I need clarification on wording signed by the court on 1/7/21 - This Order assigns to the Alternate Payee, myself as the husband 55% of my ex-wife's Account as of December 31, 2018 including any investment experience thereon from December 31, 2018. She passed away in March of 2020. Funds have not been transferred as of yet. It states under Death of Participant: In the event that the Participant dies prior to the transfer of funds, such Alternate Payee shall be treated as the Participant's beneficiary to the extent of his assigned interest as set forth herein. My question: Does the amount of payment still hold at 55% as stated in the QDRO whether or not my ex-wife had signed the QDRO prior to her passing.

If a plan sponsors both a US 401(k) and a Puerto Rico plan (not dual-qualified) do HCE's that participated in both plans need their compensation and contributions aggregated and tested in both plans for nondiscrimination testing?  

Its my understand the new age 72 RMD RBD is not required to adopted by a 401(k) plan - 

Assuming i am correct - Could a participant who would then be required to take their 401(k) RMD at 70 1/2 (plan rule) roll the funds (tax free) into a traditional IRA where they would have roughly 18 months before before having to take an RMD?

Thank you