I know the deadline to restate DB Plans for PPA had been April 30, 2020.  Do to the lockdown, was that extended at all?  I can't find anything, but wasn't sure if I missed it.  Have a prospective client that wasn't restated, so trying to determine if there's an issue.

Thanks!

Would employee's HSA contributions withheld from paychecks be a safe harbor exclusion? I don't think so, but maybe I am missing it.

Thanks for any guidance. 

A qualifying participant wants to take a $100k CRD from their 401(k) plan and roll it over directly into their Roth IRA since the tax liability can be spread out over 3 years.  Although this is not what the legislators had in mind when the CARES Act was drafted, I can't seem to find anything that specifically prohibits what essentially amounts to a Roth conversion.  Is such a direct RO legal?  If not, could the $100k be paid to the participant and then rolled over into a Roth IRA, or is a Roth conversion only possible via a direct RO?   

DB plan restricted employee retired at age 62, NRA is 65. The regulations say the payment is restricted to: A straight life annuity that is the actuarial equivalent of the accrued benefit and other benefits to which the restricted employee is entitled under the plan (other than a social security supplement).

The plan definition of actuarial equivalence is 8% UP84. The early retirement reduction is defined as 1/15, 1/30. The normal form is 5 C&L. Given the ER factors the plan's early retirement life annuity is much larger than the actuarial equivalent life annuity using 8% UP84.   

Is the subsidized ER benefit considered “other benefits”? Are the early retirement factors considered actuarial equivalence?

What is the restricted payment amount in this situation?

Employee stopped working for the company, therefore defaulted on the loan took out for primary home purchase. Loan is considered 'Deemed Distribution', 1099R is issued, and time has passed over a year. Employee called saying tax for the previous year has not yet been filed, although 1099R has been received. Can employee still pay back the loan, and not utilize the 1099R while filing for tax for the previous year? Thanks in advance! 

We were asked to look at this plan - they also have a 401(k) plan - and we referred it to another TPA. Too much of a mess, and ESOP's aren't our thing. But I did have one question, for my own edification. The plan diversification provisions provide that the amount may be transferred to the company's 401(k) plan. However, some number of prior diversification amounts were distributed in cash.

How might this be corrected? I can't see any way to fix, other than to go through VCP, and ask the IRS to bless a retroactive amendment permitting a distribution in cash? Is there another option?

Actually, it seems like this could qualify for SCP by amendment, under RP 2019-19 - other thoughts?

(2) Availability of correction by plan amendment in SCP. SCP is available for corrections made by plan amendment, as provided in section 4.05(2)(a), (b), and (c). In addition, a Plan Sponsor may adopt a plan amendment to reflect corrective action. For example, if the plan failed to satisfy the actual deferral percentage (ADP) test required under § 401(k)(3) and the Plan Sponsor must make qualified nonelective contributions not already provided for under the plan, the plan may be amended to provide for qualified nonelective contributions.

(a) Correction of Operational Failure by plan amendment for a Qualified Plan or 403(b) Plan. A Plan Sponsor of a Qualified Plan or 403(b) Plan may correct an Operational Failure by plan amendment in order to conform the terms of the plan to the plan’s prior operations only if the following conditions are satisfied: (i) The plan amendment would result in an increase of a benefit, right or feature. (ii) The increase in the benefit, right, or feature applies to all employees eligible to participate in the plan. (iii) Providing the increase in the benefit, right, or feature to participants is permitted under the Code (including the requirements of §§ 401(a)(4), 410(b), 411(d)(6), and 403(b)(12), as applicable), and satisfies the correction principles of section 6.02 and any other applicable rules of this revenue procedure.

FACTS:

CA employer sponsor Safe Harbor 401k plan

Eligibility waiting period is 1 Year of Service (12 mos, 1000 hrs)

Plan Entry Dates: 1/1 and 7/1 coincident with/following waiting period

Employee "A" is hired 3/15/2019 on full-time basis. Projected Entry Date is 7/1/2020

On approximately 1/15/2020  "A" apparently moves and does not show up for work, without any notice to CA employer/plan sponsor. Sometime thereafter the CA employer learns "A" claims to have become disabled since moving and has filed for state (and/or Federal) Disability; "A's" request is denied apparently due to failure to satisfy Disability requirements. "A" did work > 1000 hours from Date of Hire (3/15/2019) to the last day "A" reported for work (approx 1/15/2020). To date, "A" has not been in contact with the CA employer/plan sponsor. The CA employer does not want to send a termination notice in as it fears "A" may try to sue, claiming terminated due to disability.

The CA employer/plan sponsor wants to know if "A" must be provided with enrollment materials at this time (based on 7/1/2020 entry date). They would prefer not to reach out if it is not necessary.

The Plan provides:

1.63 "Period of Severance" means a continuous period of time during which an Employee is not employed by the Employer. Such period begins on the date the Employee retires, quits or is discharged, or if earlier, the twelve (12) month anniversary of the date on which the Employee was otherwise first absent from service.

QUESTIONS:

1.  At what point is "A" no longer an employee of the employer?
2. If "A" is still an employee, albeit an "inactive" employee, when is the employer obligated to provide Enrollment Materials?
3. If "A" is still an employee, albeit an "inactive" employee, what determines termination/severance from employment? Does CA employment law provide a standard for this situation, or, any federal guidelines?

It seems worst case scenario is "A" continues to be an employee, and, since "A" has 1000+ hrs and more than 12 mos have elapsed since DOH, "A" is eligible with an entry date of 7/1 - or is it the date "A" returns to service if later?  Failure of employer to provide Enrollment Materials at this time (or later if eligibility entry date is later date) can be corrected... but if "A" earns zero the correction will result in $0 contributions due.

Any help and/or insight is appreciated. Thank you.

Does anyone have a software that they love for tracking billable (and non-billable) time?

Is there any regulation for determining who is an active participant under a professional service DB plan? It appears regulations under §4006.2 may be obsolete. I don't see any regulations under 29 USC §1321 (ERISA §4021), which sets up the exemption.

I'm looking at a CB plan with 22 definitely actives, two eligibles but with a $0 HAC, and two terminated participants with accrued benefits.

There are different definitions for different purposes, but the definition of "active participant" for this purpose is elusive. By some definitions there are 26 actives, 24 actives, and 22 actives. Any direction is appreciated.

There were no age and service requirements for deferral but there was a 1-year wait for all other contributions.

From read the attached IRS Section 416.– Special Rules for Top-Heavy Plans, my understanding is that whenever a plan design with dual eligibility, those who don’t meet the 1-year wait are entitled to TH minimum regardless of what type of Safe harbor Contribution the plan offers,. including Safe Harbor match and some of the participants didn't defer. 

Please help me better understand the rules if possible include the codes that go over this topic.

In a statement from the DOL, among other things, they had this to say: 

“The new safe harbor is an additional method of delivery and does not substantively change the 2002 safe harbor.” 

Nice that it takes them 150 pages to issue a regulation that doesn’t "substantively" change the existing one. Our tax dollars at work!

Now, to be fair, I haven't read it, so maybe it provides more help than I expect. Since my expectations are very low, that's possible...

I am a federal employee and am going to get retired in 5 years. I was married once, we finalized a DIY divorce with a help of onlinedivorcer.com and during the time of marriage  or after that was over we didn't sign any papers regarding my retirement plan or pension. The divorce was over 3 years ago, we were married also 3 years and haven't got any common assets or property or kids. My present-day GF keeps pushing the wedding because she is sure that some part of my pension would go as a spousal support to my ex-wife according to the Texas state laws, however neither QDRO nor any other documents regarding my pension were signed. I am interested whether it's true and I am going to lose a couple of grands monthly and what should I do if it's for real? What happens if I get married once again?

Apologies for the 100 level questions as my first time doing this.

Client made the 2019 deferral deposits pretty much 15-30 days after the payroll dates.

Assuming 7th business day as the safe harbor deposit date. Document is silent on when the deposits need to be made. This seems to be the standard. I am aware of the "as soon as feasible" clause which varies from employer to employer.

My understanding from the VFCP section 5(b) and the questions based on the "online calculator" page

• Principal amount is the per payroll deduction e.g. 3/1/19 for $200
• Loss date is the 7th business date from payroll date 3/11/19 (included 3/1 as the first business date)
• Recovery date is the date of the deposit 3/18/19 i.e. 6th business days from loss date
• Final payment date - assuming the same as Recovery date - I could not find anything on this as a definition.

Questions:

•  Are the dates correct as calculated above?
• The interest added by the employer to make up the missed dates, are they deductible. If yes which year (assume 2019 tax return not yet done)
•  As this additional interest correction added to the assets, for which plan year's 5500 filing should reflect them? Assume 2019 5500 filing is not yet completed.
•  What if during 2019 assets had a negative return or 25% return, does it matter how the assets perfomed? 

Any comments/suggestions are appreciated.

Thank you,

I have noticed that some plan administrators have been approaching employers about PEPs that they are planning to make available in time for the 2021 effective date. Does anyone have an idea of how flexible or inflexible the PEPs are likely to be regarding an employer’s preferences concerning eligibility, vesting, contribution formulas, loans, in- service distributions, etc.? None of the literature I have found on PEPs discusses this issue but flexibility in plan design would seem to be very important to an employer considering a move from a single employer VSP to a PEP.

Any ideas and/or guesses? Thanks.

Hi

Client files the LLC (single member - schedule c) tax return on 4/15 with no extension but the actual return was extended to 7/15/2020.

I just got the info and found out that additional contributions will be required for 2019. 

As the filing was extended to 7/15/2020 with no extension filing requirements, I believe the client can make the additional contribution and deduct for 2019 i.e. redo the tax return.

Thank you for your comments.

Hi all

My apologies if this was discussed before.

The normal 5500 filing was due by 4/30/2020 which was automatically extended to 7/15/2020 (if 5558 was filed, would have been the same deadline).

What is the deadline to certify AFTAP 6/30/2020 or 7/15/2020?

Have a great weekend and be safe.

plan document specifies subaccounts that contains pre-tax earnings or contributions, can be in-plan converted by eligible rollover distributions, into designated roth subaccounts. 

voluntary after-tax contributions go into a separate subaccount, than elective deferrals and employer contributions. Does a subaccount still count as pre-tax, if it does not actually contain any pre-tax earning or contributions, but otherwise can potentially contain pre-tax earnings? It is clearly not a designated roth subaccount.

inservice distributions otherwise not permitted.

If I am a 5500-SF filer, and my plan invests in the Pooled Separate Accounts of an insurance company, is the insurance company required to provide my TPA with Schedule A information?  I understand that I'm not filing a Schedule A as part of my 5500-SF, however, should the insurance company be providing full Schedule A information, or just information regarding commissions? 

Thanks very much to @Bill Presson for bringing this matter to everybody's attention recently (DOL says we should not include participant names and other "Personal Identifiable Information (PII)" on the Schedule 8955-SAA, for example)  -- here's a link to an article by Nevin Adams with details:

https://www.asppa-net.org/news/dol-stop-including-pii-form-5500-filings

Hello. I hope this post finds you and your loved ones healthy. I currently have a balance forward 401(k) plan, and I'm looking for a recordkeeper that has a platform which would permit participants to select a risk-reward portfolio instead of individual mutual funds. The plan sponsor would construct the portfolios using the recordkeeper's mutual funds. The participants wouldn’t direct the investment of their separate account, but rather they would select a portfolio. Participants's accounts would be updated daily. Thank you.