Hi Folks,

I'm looking for some input from folks smarter than me.

How will auditors look at plans with post-10/15 contributions for the 2019 plan year? Specifically, I'm assuming that these contributions are not reported on the 2019 SB (since they haven't been made yet) as of the time of filing. Will they be left off of the audit report? Included as a footnote? If the plan sponsor amends the filing post-10/15 to include the contributions on the SB, will the H/audit also require amendment?

Thanks for your thoughts on this!

Bug

Good morning, this falls under the "please don't shoot the messenger" heading.

A prospect for a non-ERISA 403(b) Plan, which is a church, is asking whether they can take advantage of the "tax credit under the Secure Act".  We don't see how this could benefit an entity that does not pay any taxes in the first place, but we were still asked to research the question.  Maybe we are missing something.

Thoughts?

Thank you.

I was just looking at an engagement agreement, and I saw something that I don't recall seeing (or perhaps never noticed, because I don't necessarily review a prior TPA's engagement agreement) before. It states that the TPA will bill the Plan Sponsor for services, then goes on to state that the TPA may deduct the service fees for the services directly from the participants' accounts upon non-payment of fees by the plan sponsor after 60 days.

Is there any problem with this from a legal standpoint? It feels funny, but maybe it is fine as long as the plan sponsor/fiduciary has authorized it. Is this a common provision? 

An employee expects to be laid off in the next couple of months, the employer is closing a local office and the employee does not intend to move to the new location.   Can she change her health plan election when electing COBRA?  
 

She is still employed and they are currently in their open enrollment period.  She is currently in Plan A and would normally continue in this plan.   However Plan B Is less expensive. If she cannot change she may choose Plan B now. If she can change she will stay on A For now and then decide between A and B when the COBRA decision must be made later. 

The info I’ve found seems contradictory, it say generally you cannot make such a change, but then it says there are exceptions that allow the change for HIPAA qualifying events. And losing group coverage eligibility is a qualifying event.  I’m a pension guy, just trying to help out a friend and want to make sure I’m getting it right.  Thanks.  

I have a potential client with the following facts:

Person A owns 73.33% 

Person B owns 16.66%

The remaining 10% is owned by a trust. The Trust is an irrevocable trust where Person A is the grantor and Person A's children (ages 25 & 27)  are the beneficiaries. Person A's brother is the trustee of the trust. The children are set to receive 1/3 of the benefit at age 30, 1/2 at age 35 and the rest at age 40.

I am trying to figure out if the children's benefit in the trust should be attributed to Person A, creating a controlled group with a separate company person A owns 100%.

Any help would be greatly appreciated.

Are individual states required to comply with the relief enacted under the Cares Act with regards to waived 2020 RMDs, Aug 31st due date for rollovers, & one IRA rollover per year exemption?

I was told NYS is not following the Cares Act & was asked how to handle RMDs that were taken during 2020 & then rolled over into IRAs after 60-days for state tax purposes.

Wouldn't it be based on how the states define eligible rollovers & if they cite the federal code & regulations?

How is a Family Limited Partnership (FLP) considered for controlled group rules? Specifically, when multiple companies are involved and individuals own portions of some of the companies (perhaps constituting a brother-sister controlled group or combined via ASG rules) and then the same individuals own other companies but only through an FLP. 

I'm new to this and I heard that when people leave a company, they tend to leave their 401k behind. Is it a big problem for the employer to keep all those orphaned 401k's? If so, how should we encourage people to rollover their 401k when they leave? Thanks!

Is it clear that a plan loan "deemed distribution" (as opposed to a "loan offset") cannot be treated as a CRD by a CARES Act qualified individual? 

Employee participates in Plan A for part of 2020 and contributes the maximum of $19,500 employee Roth Contributions. Employee terminates service and moves to a different company where he/she is immediately eligible to participant in Plan B (there is NO controlled group between the two entities). Plan B permits after-tax voluntary employee contributions. No employer contributions are allocated in Plan B. Can the employee deposit a maximum of $57,000 as an after-tax voluntary contribution?

I believe the employee contribution is a calendar year limit (maximum of 19,500), but is the after-tax voluntary contributions subject to the 415 limit which is a Plan limit?

Is it clear that a plan loan "deemed distribution" (as opposed to a "loan offset") cannot be treated as a CRD by a CARES Act qualified individual? 

So I'm just curious, not being even remotely tech-savvy by today's standards. Let's say you (plan sponsor, and/or recordkeeper/TPA in conjunction with plan sponsor) decide to avail yourself of these new regs. Does it open up big potential holes for a breach of security, when a gazillion participants are receiving e-mails stating that their statements are available, and providing a hyperlink or instructions, etc. on how to access them? A lot of participants have internet access that isn't as secure as perhaps what they have at work, and it may be easier for passwords to get stolen, ghosted, whatever?

It just seems like in a general way, the more things are done via internet-based applications, the more potential security breaches come into play. Just wondering what folks think about this aspect, entirely aside from whether the process is better/worse/indifferent from an administration viewpoint.

Are governmental defined contributions plans subject to the 6-year restatement period? If so, are their restatements due the same time as 401(k), profit sharing and money purchase deadline of 7/31/2022? 

Calendar year plan, employee is hired during the last week of 2019.  However, the first paycheck they receive isn't until the first week of 2020 (and counts on the 2020 W-2).  Does the universal availability clause require that the participant be counted as a participant in 2019, even though there is no official 2019 compensation?  And this plan has an ACP Test - I would say that the participant had no opportunity to receive a match and therefore can't be counted in the 2019 ACP Test... but I would have to include them in a coverage test.  I don't really have a basis for that (yet), but it seems ridiculous to include someone in a test that they had no opportunity to take advantage of (hmm, so then why include them in 410(b) testing?).  Any sage advice?  Thanks.

when is a plan actually considered disqualified?  does the IRS have to formerly disqualify before it is considered disqualified? i know the IRS can reach back to open years but was wondering how the SOL applies to plans that might not be qualified due to failures (but not formerly disqualified by the IRS)

https://www.businessofbenefits.com/2020/08/articles/403b/are-there-partial-terminations-of-403b-plans/

The information in this article, while interesting (and I didn't bother to evaluate it), makes no difference to us, as our plans provide for 100% vesting upon full or partial termination anyway. I expect most plans do...

I just realized that my previous employer didn't pay most of my payroll deductions or the company match for 9 years into my account.  I don't even know where to begin getting my money back.  Can someone help?   

An attorney has a P.C. (100% owed). he also owns 50% of a CPA firm with which he is associated. No doubt, this is an A-Org/FSO ASG. Sometime in 2020 he sells his interest in the CPA firm. He still works there, but is no longer an owner.

Does this break the ASG in 2020? When do we make that determination? First day of the year? Last day of the year? Any day of the year? I don't see any guidance on this. If this were a controlled group issue, does the determination date differ? 

Hi

I was asked the following:

401k plan effective 2017 but no deferrals were made nor any other contributions i.e. bunch of participants (owners + rank&file) as of 12/31/17 but no assets.

2018 had deferrals and other contributions.

Same for 2019.

Client sends data for the first time since inception, last week.

They had to file 5500 for 2017, correct?

2018 they did not.

DVFC for 2017 and 2018, correct?

Thank you,