We were asked to assist a client who had a 403(b) plan since 2004 but never formally adopted a plan document or filed a Form 5500. 

If the client adopts  the plan document before the June 30 deadline, are we in compliance, or do we need to file a VCP for the plan document issue? Is the June 30 deadline only for defects to an existing plan document or can we use it for a plan that never had a plan document?

For the late 5500, the client will filed under DFVCP.

Thank you.

Client wants to take a COVID related loan of 100,000 and also take a $100,000 COVID related distribution. I haven't seen anything about a 100,000 loan and a 100,000 distribution.  I know that the $100,000 COVID distribution limit is from all plans.  But wasn't sure if that includes loans too.

A CPA asked me about this yesterday.  His client has money left over, and has no existing retirement plan.  So rather than return it, he'd like to open a profit sharing plan for his employees and pre-fund it with the PPP money (understanding that at the moment it may not be deductible).  Seems like it would be allowable, if maybe not quite in the spirit of the program...

We have had a 403(b) plan that has been inactive for well over 10 years.  It is a hospital plan that was previously bought out and taken over by a new medical organization.  No new contributions going into the plan past 10 years, just withdrawals.  The plan has never had more than 100 participants and currently have around 50 accounts in it.

Since the plan data is easy to obtain, the new organization has chosen to file 5500s each year even though I do not believe they have been required to.

The deadline for a new 403(b) document is almost here (June 30th).  Even though the plan is frozen and allows no new participants, a new document is still required, is that correct?

Thank you

We're looking to takeover a 401(k), currently the employer is in a MEP with Tri-Net; and set up a cash balance defined benefit for the same employer.

Does the employer "terminate" participation in the MEP?  Would Tri-Net consider this a plan termination (should probably ask them) and the prospect install a 401(k) SHNE as well as the cash balance plan for 2020 minus any deferrals made in 2020 and using full year's W-2 with the Employer as the Sponsor.

Apparently this is an employee-only plan.

Any help is appreciated.

We have a client that moved from one recordkeeper to another.  They were provided with several notices by the new rk and the funds have already been transferred.  Yesterday, we found out the client did not distribute any of the notices.  What are the penalities for something like this and does it require reporting to DOL/IRS?  Thank you.,

This is probably been discussed before and I am just not finding what I want.  Plan has a 25% match on deferrals, but the first 3% aren't matched.  I should know this, but I've never seen that formula.  My understanding is that participants not deferring 3% would still count as benefitting for 410(b) and also count in ACP test.  I think to test for BRF also.  Is that correct and if so do I include those who do not contribute anything as non-benefitting? 

Thanks for any guidance.

I missed my window of eligibility to participate in the DROP (Deferred Retirement Option Plan) plan with the FRS (Florida Retirement System).   I contacted FRS in March 2020 when I was ready to apply for DROP and received an email back telling me that I WAS currently in my window and had until August 2020 to apply.  I applied in May 2020 and received a denial letter saying that my window had actually passed.  I sent a letter of appeal asking them to reconsider as they had misinformed me of my window.  They apologized for the misinformation but told me that they did not have the statutory authority to change their decision.  I have worked under the FRS for over 30 years and had planned for my entire career to participate in DROP for the last 3 years. This will have a rather serious negative effect on my retirement. I cannot believe that there is no one who can override this decision.  I also cannot believe that my retirement system (FRS) does not alert us when we are in our window so that something like this doesn't happen.  Does anyone know anything about this, or how I might be able to get this decision reversed. 

Having trouble understanding Coronaviris Related Distributions in a currently terminating plan.

Is it the sponsor's option to allow distributions as part of a termination to be CRD'S?

If a notice of termination has been sent can the sponsor still opt to allow CRD's?

Thanks in advance.

For those plans that just don't participate in the automatic force-out process and therefore aren't following the helpful provision that's in their document: is it a cutback to remove it?

My apologies if this was discussed before.

Clint obtained PPP for payroll. Can they make deferrals?

Thank you

Client has FSA that includes dependent care reimbursement, health insurance premium conversion, and the medical expense reimbursements.  Two questions: 

1. One employee has $1210 left in Daycare balance, but day care was closed and now summer camps have been canceled.  Is there any way to convert back to taxable income?
2. Other employee's insurance premium has increased.   She wants to use the amount designated for medical expense reimbursement to pay the premium difference.  She doesn't have enough expenses and she doesn't want her pay decreased to cover the premium when this money is sitting there.   

I'm not very familiar with cafeteria plans, but both asks seem untenable.  Any other suggestions on how to remedy?  

We have been administering hardships as follows for our clients:

-If the document said "all sources" are available for hardships, then we allowed from QNEC/QMAC/Safe Harbor.

-IF the said  just Elective Deferrals then we treated them as not eligible.

This treatment appeared to us at least to be the most logical path forward.  The problem is that the Corbel/FIS Amendment was drafted it forces us to choose a default of "QNECs are available" or "QNECs are not available."  A binary decision which will lead to probably half of our amendments requiring employer sign off.  I prefer to have a formula that says "IF all sources is selected in the Adoption Agreement, then QNECs are available.  If individual sources were selected in the Adoption Agreement, then QNECs are not available."

What are others doing with this?  I'm not sure how other document providers handled this, but I guess it doesn;t have to be exclusive to Corbel/FIS.  Are others in the same pickle?

If a participant took an RMD in 2020 as a stock distribution and was determined to meet the CRD requirements, can that repayment during the 3 year window be made in the form of stock or does it have to be at the cash value of the stock on the date it was distributed.

Thanks for your help with this!

When does a self-employed individual truly have a termination of employment allowing him to take a distribution from his qualified plan? Is it:

1. When he moves from one type of business to another? (So he's effectively terminated is current trade or business)

2. When he runs the same type of business, but he significantly relocates it?

As an example, suppose a real estate agent has moved from one agency to another. Is the trade or business -- my real-estate business with company x? Or is it -- my real estate business?

I am looking for some general thoughts and experiences. I realize we are likely in the IRS world of facts and circumstances.

I have a plan where two 19 year old employees were automatically enrolled in the plan on February 1, 2020.  The eligibility age is 21.  They were both just terminated due to COVID 19 related matters.  Their account balances are less than the total amount of employee deferrals contributed to date.  What sort of correction would need to be made? 

If I am a "qualifying participant" pursuant to the CARES Act, and I take a loan today and request a suspension of the payments, when would my first payment be due?

I thought it would be June 1, 2021 (i.e., a full 12 month suspension), but I have seen a reference to January 1, 2021, and a separate reference to March 27, 2021, as the next payment date for any loan suspended as per the CARE Act.

Thank you in advance for your guidance.

Scenario:  Client terminated plan on 3/1/2020.  All assets distributed to the 3 participants by 5/1/2020.  Client wants to file final 5500-SF now. 

Question: Do we use the 2019 5500-SF as there is no 2020 5500-SF yet available?  

Other than the risk of bankruptcy or other loss, is there any problem with an employer sponsoring a HRA for eligible retirees with notional accounts  tracking reimbursement from current operating funds?

Plan Sponsor maintains a Safe Harbor 401(k) Plan with Basic Safe Harbor Match.  Safe Harbor match is calculated annually per plan document.

Plan Sponsor would like to calculate safe harbor match for the period covered under the PPP Loan which they received.

Should this safe harbor match be calculated for the PPP period and can it be allocated to the participant's directed account at their asset custodian?