I know they left the distribution rules somewhat vague, but here's the situation we are trying to determine if someone qualifies for a loan:

Participant's father passed away due to COVID and the member is seeking a loan to pay for the funeral.  We know the participant and spouse have not lost any pay due to the pandemic (and may actually be making increased salary due to hazard pay).  So, would paying for the funeral qualify?  Curious as to others thoughts.

Thanks in advance!

I have a few questions.

1.  Is the CARES Act RMD waiver an optional or required provision for plan sponsors?  

2.  Does the plan sponsor need to amend their plan document to allow the waivers?

3.  We have an 80 year old employee that retired on 12/31/2019.  My understanding was that she was exempt from the RMD under the "still working" exception until she retired.  Now, she should have had her first RMD by 4/1/2020 (which still hasn't occurred).  If she had worked on 1/1/2020, her first RMD wouldn't have been required until 4/1/2021 (notwithstanding the CARES Act).  So I believe we are late in processing this RMD, correct?  Do we need to process this ASAP?  Does she have rollover options as part of the CARES Act?

Thanks for any thoughts.

After sitting in on quite a number of webinars including with the ERISApedia folks, I believe I have it correct with regard to the COVID loan repay suspensions but one can never be sure.

Participant works for a dental office.  The majority of the office is closed but said participant is, at least at this time, being paid full pay.  Participant's spouse had hours reduced and now his Company has completely shut down and let everyone go.  Participant would like to defer loan repays because husband is now not working at all.  Is it correct to say that this participant would NOT be a qualified participant under the COVID rules in order to defer her loan repays?  

If the plan made the interest payments for late deferrals from 2017, '18 and '19 in 2020, do I still need to do a 5330 for all those years?  Or just 2020?

Employer  A sponsors a 403(b) - immediate eligibility. They also make a fixed match contribution. 

 Employer A will fully own the new entity Employer B.   They want to offer all benefits under Employer A with the exception of the 403(b) Plan to the Employer B group.

Whether the employees are paid under Employer A's EIN or the Employer B's EIN, can this group be excluded. Doesn't the universal availability preclude  the exclusion of a class of employees ( in this case the employees of the new entity)

When there is a controlled group, can the sponsoring employer , excluded one of the controlled groups in a 403(b) Plan? Or does the universal availability  supersede the ability to exclude a group of employees?

Hello,

I've seen various methods used for the calculation of interest rate on 401(k) loans, but am not sure what part of the code specifically addresses this.  Anecdotally, I have seen rates in plans such as 'WSJ Prime plus X%, or even using the rate of G funds for a TSP.  If anyone could point me to guidance on this it would be helpful. I'm looking to set a rate that is as low as is appropriate while maintaining proper boundaries on how low the number can be.

If a plan allows rollovers from "401(a)" plans, does this include a governmental TSP? I know TSP distributions CAN be rolled to IRA's, qualified plans, etc., but does a TSP specifically need to be listed under the plan types that can be rolled in, or is that covered under the umbrella of 401(a)? 

P.S. - it seemed to me that it does constitute a "qualified trust" under 401(a) - also see paragraph (5)(G) of 401(a) which specifically exempts governmental plans from paragraphs (3) and (4). It just isn't entirely clear to me, so I thought I'd check to see who else might have considered this issue.

I had been asked to calculate the 50 J&S for Money Purchase Plan participants. I did not find any actuarial equivalent provisions in the plan document. What mortality and interest rate should I use? 

Does the temporary $100,000 loan limit (from the CARES act) apply to Defined Benefit plans?

Five years ago a 401(k) plan implemented an EACA with an auto enrollment of 6%. The plan administrator has decided that 6% is too high for future participants. The administrator would like to lower the percentage for new participants only to 3% effective January 1, 2021 (calendar year plan). The record keeper is a large national vendor (who is also the document provider) states that if they lower the % on January 1, 2021, they must lower all auto enrolled participants to 3%. This includes any participant who was auto enrolled at 6% during the past 5 years. They state that the EACA uniformity rules will not allow new participants to be enrolled at 3% while leaving the existing participants at 6%.

Is the record keeper correct, in that if the EACA % is decreased, it must be decreased for everyone who was ever auto enrolled in order to keep the EACA benefits?

Thank you

I am sure this was discussed and it is a very basic question:

My situation is reverse of what is going on, sponsor wants to add SH rather than eliminating it.

Existing 401k plan with deferral and discretionary match options. they provide 10% of deferral as match.

Plan consistently fails ADP for the past 3 years.

Sponsor wants to proceed with a safe harbor match, let's say effective 7/1/2020, standard 3% of the first 100% plus 50%.....

How will the plan satisfy SH for 2020 and is there any testing that needs to be done? How are the salaries considered for the first part of the year and second part of the year?

Assume that the discretionary match is made at the time the deferrals. So for the first 6 months, they made the match which is way less than the actual SH match amount would have been.

Thank you

Employer ( controlled group)  has three  plans

403(b) and 401(a) for the not for profit entity

401(k)  Safe Harbor for the for profit entity

The for profit entity will move to a not for profit status  late  in September. The employees in the 401(k) will be enrolled into the 403(b) Plan. They are paid by the employer of the 403(b) Plan.

They want to merge the 401(k) into the 401(a) Plan.

1. Can 401(k)  plan merge mid year since it is s Safe Harbor Plan?

2. Does the 401(k) lose its Safe Harbor status for 2020 since the contributions stop as of 9/1?

3. If the merger is not permitted, does it remain "frozen" for new contribution until it can transfer on 1/1/2021? Again does it lose it's Safe Harbor status in this event?

thanks

Our company announced our plan was being  amended for CARES over the next few weeks and participants can expect the changes to be adopted. 
 

just curious if anyone knows what balances are typically available with these things as standard (I realize there not one necessarily). Vested/invested, employee/r contributions, etc. 

never knew there were so many categories for a 401k balance. I’m fully vested and mostly wondering what categories might be unavailable when the plan is rolled out. For example, the available for a “hardship withdrawl” currently is only $44k buy vested balance is significantly higher than that. 
 

thanks for any advice/help 

Most IRS offices are closed.  I have a few DB plans for which we will need to file a Form 5307 application.  The IRS website says they "continue to process determinations for employees plans," but it's not entirely clear what that means.  (https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue)

Obviously, I will push the application submission dates off as far as possible, but does anyone know if U.S. Mail and/or FedEx/UPS packages are currently being delivered/accepted?

Thank you!

Pre-SECURE Act rule inquiry (based on a fictitious couple):

participant dies at age 90 (after starting RMD's). 

surviving spouse who is the sole designated beneficiary is age 99 in year of death.

ULT factor in year of death for participant is 11.4

SLT factor in year after death for surviving spouse is 2.9

So factor in year after death is max(11.4-1, 2.9) or 10.4, which is then subracted by 1 each year thereafter?

A client of mine, company A, recently purchased company B; it was a stock purchase. Company B was a subsidiary of a big conglomerate and participated in their 401k, which included Roth contributions.

Company A's plan does not allow Roth, and they'd like to keep it that way. They don't even want the Roth rollovers coming into their plan.

Employees of B were not given distribution options. They were told that all funds would be transferred to company A's 401k (before A had considered the Roth issue). However, if they could bring all assets EXCEPT Roth, they would much prefer that. But is that allowed in a merger? Can the merger instrument state that only non-Roth assets will be merged? And Roth assets will need to remain where they are?

I saw the great discussion on the PPP earlier in the week, which pertaining mainly to prefunding 2020 contributions.

Are 2019 contributions eligible for consideration in the PPP.  For example, employer was planning to fund a 2019 profit sharing contribution by their 2019 extended tax filing deadline, and makes the deposit during the 8-week window?

Thank you.

I know there are discussions about this.

Have an employer who terminated 35% of participants. If this coronavirus situation improves by November, they may hire half of the terminees back. Apparently there is no special coronavirus exception to the partial plan termination rules.

This is a plan year determination so we really do not need to determine whether a partial plan termination has occurred until after 12/31/2020 in this case.The employees where all laid off on March 28.

Since these days most former employees want their distributions immediately, how are others handling this? My thought is if someone is 40% vested, they get paid their vested benefit now and if it is later determined that a partial plan termination has taken place, they subsequently get paid their remaining 60%. Does this seem reasonable?

What if it is later determined a partial plan termination has occurred and their remaining 60% was worth $20,000 when they received their distribution, but it turned into $10,000 by the time they received their subsequent distribution due to plan investment losses. )?

Thanks!

Even in years with no disaster or public-health emergency, many administrators of employee-benefit plans—whether acting directly, or by some agent—routinely extend a Form 5500 due date from July 31 to October 15.

If the Labor department doesn’t grant a coronavirus delay, is there a practical consequence beyond the make-work of completing and sending an extension form?

I ask because BenefitsLink writers often school me about gaps in my knowledge or experience.

Has there been any relief measures put into place for Safe Harbor Match Plans that are also Top Heavy?  Company is looking for ways to manage their costs during this time.

TIA