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

I am at a loss on this, in-network provider successfully sued patient for balance bill in state court despite denial of benifits with non-liabilty and both appeals being adminstratively denied for improper billing with non-liabilty of enrolle. Lawsuit was for breach of oral contract but the written ERISA contract had a hold harmless, and included language to prevent any form of out of network contract unless the provider informed the patient in writing services would not be covered under the plan (they did not). The judge ruled as if patient had insurance and would not correct to state it was Self-Funded ERISA, would this be a cause?

I am talking with an attorney who has a practice with no employees, just him.  He has dba business name and he puts all revenue through the dba which he reports as a sole prop on his tax return.  But he does not have an EIN and seem reluctant to create one.  He wants to start a 401k for himself.  Can he do that without an EIN?

Thank you for any comments.

cross-tested plan with individual rate groups requires 1000 hours and last day for contribution.  With the individual rate group classification, is it fine to allocate employer contribution (above and beyond top heavy and gateway minimums) to someone who did not make 1000 hrs but still employed on last day?  This is a situation of a generous business owner who does not want to leave a part-timer out of the PS contribution.

My scenario:  2 business partners start a cash balance plan for themselves a few years ago (no employees).  Partner 2 is given a 35,000 contribution credit each year, well below his 415 limit.

One year, Partner 2 decides to deposit 50,000 instead of 35,000, figuring (a) it's deductible within the cushion amount, and (b) we could always amend the formulas later when the plan terminates so that his benefit is exactly what's in the portfolio.

And then sure enough, corporate divorce between the partners at the end of 2019.  Partner 2 has contributed a total of 120,000 for himself, but his actual cash balance benefit is only about 114,000, which is what he got paid a few weeks ago.

So at first glance, too bad for him, especially if Partner 1 (now basically a sole proprietor, I suppose) has no intention of paying us to amend formulas for the other guy.

But now, amid the "divorce proceedings", it sounds as though Partner 1 wishes he could have just paid the guy more from the plan.

My question is, what's the typical methodology to increase a CB formula for someone who's an EX employee?  Assuming Partner 2 has no service for 2020, what would be the typical way to write up an increase for him?  He won't hit any kind of "hours of service" requirement to accrue more. 

I'm using ASC's checklist-formatted CB plan document, if that matters.  Can I at this point increase his benefit either for 2020 (where there may be no service) or any of the prior years (where at least there was), such as to bring his benefits due up to an "appropriate" amount based on the 120,000 he put in?

(Not fully up to speed on what sort of retroactive benefit increases we can orchestrate in a CB plan.)

Thanks....

--bri

I have a question regarding processing a distribution for a participant who exceeded the 402(g) limit.

Let's say he's $1,000 over the limit and he only has Roth contributions. The distribution has a gain of $200 and it is processed after the end of the year.

My understanding is that you need 2 form 1099-Rs - one with code BP (for $1,000) and one with code B8 (for $200, which is the earnings amount). I have 2 questions:

1) Is that the correct approach?

2) If it is, what would you report as the Roth Basis on each of the 1099-R forms?

Thanks!