Unclear as to whether the Suspended Loan Repayment Provision would apply to a new loan taken out currently.

Owner wants to allow all legal investments under the 401(k) plan, for all participants. The plan is fairly plan vanilla uses a popular custodian / recordkeeper. The owner wants to invest in some small startup LLCs and wants to use his plan money. Plan has about 40 participants. 

For a whole host of reasons I can think of why this is a bad idea, but I'm not great at articulating them, and don't want to look up citations if I don't have to. 

Does anyone have suggestions for articles, threads, publications that explain why this is such a bad idea? 

There are practical ones - like I don't know if the existing advisor will want to deal with outside accounts. Nor do I know if the pricing at the custodian will change if a large chunk of the assets are moved out. But I'm more interested in things that articulate the risk from a fiduciary and prudence standpoint. 

I have a 401(k) plan with life insurance policies (ugh!, it was a takeover).  One of the participants with a policy is terminated and is age 64.  Is it correct that the plan sponsor needs to either distribute the policy to him at age 65 or convert the policy to cash?  From what I read, if he were still working for the sponsor and not retired, the policy could stay in force.

A couple of questions:

1.  Plan accepts Prevailing Wage contributions and provides that they can be used to offset Profit Sharing.  PW contributions are 100% vested.  Although the plan document allows for  offset,  it doesn't address if those amounts used for that offset can also be subject to the Profit Sharing vesting schedule.  Does the plan document have to specifically allow for the application of a vesting schedule on those amounts that are used to offset PS?

2.   Can someone point me to a resource that discusses this in more detail?  I though that there used to be a Q&A on this site, but I am not finding it now.

Thanks for any guidance.

Does anyone know if you can terminate a Non-calendar year SIMPLE 401(k) plan, I.e. plan year is 7/1 thru 6/30, and start a traditional 401(k) plan in the same calendar year? I know for SIMPLE IRAs they always operate on a calendar year basis but I am not sure about the SIMPLE 401(k). Thanks!

Is there any way for the trustee of a 401(k) plan that is not terminating to legally roll over a large balance on behalf of a missing or unresponsive participant to an IRA?  

Plan Sponsor normally charges annual administrative fees to all plan participants.

Client has changed tpa.  Can same plan sponsor charge the following fees to participants:

• Plan Document restatement by new tpa when the restatement is not a required restatement but just from changing tpa
• 'Transfer fee' by old tpa for providing participant data to new tpa

Client established a separate 401(a) plan just for prevailing wage contributions.  They have a group of SCA employees who are the eligible participants.  Out of 35 total SCA employees only 15 received contributions and have account balances.  The other 20 had no excess after wages and other benefits so they received no prevailing wage contributions.

Question - for the Form 5500-SF, are the 20 who did not receive contributions considered participants?  The compliance and 5500 software we use says yes and I guess it makes sense - you don't have to receive a contribution to be a participant, you only need to satisfy the plan's eligibility requirements.  I wanted to put this out there to see if anyone agrees or disagrees.  The client is getting a large contract that will add more SCA employees and I want to be sure we don't push them into a 5500 audit for the 2021 plan year if it isn't necessary.

I'm having trouble finding a clear answer on the precise definition of an arrangement. 

Say a mid-size employer has a written policy, or a series of individual agreements, that applies to executives (say VP or above) who retire with 10 years of service at age 55 or later. Once they retire, the employer will reimburse them up to a fixed dollar amount per month for the retired executive's personal payment of individual health insurance premiums. Reimbursement will last until Medicare eligibility. Substantiation is required. No other medical benefits are provided; just a capped premium reimbursement for a fixed amount of time. 

What, exactly, is this? An HRA or something less? For purposes of ACA market reforms and related guidance, it's called an "employer payment plan," and the guidance seems to draw a distinction between an HRA and an employer payment plan. (In any event, if limited to retirees only, it's not subject to the market reforms.) The guidance makes it clear that this arrangement is a "group health plan," but it's not exactly clear to me what that would require given the exemption from the market reforms and lack of penalties. 

Does this need an ERISA plan document, SPD, 5500 if covering 100+ participants? COBRA rights? 

Any input appreciated.

Hello everyone - I hope you all and your loved ones are well. Can anyone provide me the IRC section for the 0.5000 safe harbor weighting for contributions?

We have a situation where the client has an overfunded DB which is just sitting in an investment account; client wants to set up a profit sharing plan, with a 25%, no 401K.  Client is self employed with employees, not a PBGC.

Is this doable?  Usually, we would set up  a combination DB and a 6% profit sharing plan.

Not sure how this would work with an overfunded plan when no contributions can be made.

Group, 

Taxpayer received DOL inquiry and IDR for its ESOP and 401k plan right before Covid. 

As I began coordinating with service providers, Covid pandemic hit. Of the almost 100+ IDR requests I had only received a handful.  The investigator provided us with an extension until end of May. 

I note the DOL Notice 2020-01 doesn't provide any relief for enforcement actions at this time. 

I may not be looking in the correct Govt website or other forms of guidance for relief.

Anyone know if the Dept of Labor will allow enforcement actions to be suspended while businesses (and my taxpayer/client) are still dealing with the pandemic?  Thoughts and comments appreciated. 

Thank you 

I'm wondering if this is a possible upcoming issue with respect to loan defaults.

Assume a plan is not allowing participants to suspend their loan payments (I think the IRS Q&A said this was optional?).

Loan program allows a grace period to the end of the quarter following the quarter in which the payment was missed. 

If I'm laid off in the second quarter due to the coronavirus, my loan would default 9/30/2020, and I could claim the defaulted amount as a CRD.

If I'm laid off in the 3rd quarter due to the coronavirus, my loan would default on 12/31/2020, one day after the last CRD is allowed?

I'm probably missing something here so fire away!

Owner age 83, has been taking RMD's since Age 70 1/2.  He wants to take a distribution in 2020 in the same amount as would be required if he took an RMD.  

Question , can he take as an RMD OR must he take as a regular distribution and have the 20% mandatory withholding taken out?

Thanking you in advance for any help.

Be safe everyone.

Richie

Does the CARES Act allow a "qualified individual" to repay 2020 Roth IRA distributions within 3 years?  The law says that only CRDs that are eligible for rollover under section 408(d)(3) can be repaid, and it doesn't look like that section covers Roth IRA rollovers. 

Thank you.

A client wants to fund the employer profit sharing with the PPP loan that they received.   It's a new comp plan with 1,000 hour last day rule.     What would be the best way to calculate the amount they can put into the plan?    could it be deposited to the participants accounts or would they need a suspense account?    

This is the first question I've gotten on this, so I'm hoping it's an outlier and not the beginning of a trend...

The plan uses W-2 definition of compensation.  The sponsor noticed that their payroll company was not applying the deferral election for those who elected a percentage of compensation to be deferred against what was being coded as "FFCRA EE Sick" pay on their paychecks (so it was being calculated from "regular wages" only).  The plan sponsor asked the payroll company, and the response was to double-check the plan because "by default" FFCRA wages aren't included.

I admit that I haven't paid much attention to FFCRA from a consulting standpoint, since I figured that it wouldn't matter - taxable wages are taxable wages, so we'd count them.  But this deferral thing is concerning.  I don't know what payroll company they're using, but what can they be thinking?

Does this really give everyone a blanket suspension on loan repayments until July 15?  I didn't read it that way, but the latest ERISApedia webinar with Derrin Watson said that's what it meant (though the loan has to be caught up by 12/31/20).

So... since you don't have to be a "qualified individual" like for the coronavirus suspension, are all loan repayments for everyone suspended until then?  Or just if requested?  I assume this is mainly a mechanism to postpone defaults.  And of course the Notice doesn't say anything about accruing interest or reamortizing... I don't see the recordkeepers just giving everyone a few months off.

Imagine a group of commonly controlled business organizations.  All have a § 401(k) plan.  None is a safe-harbor plan.  The group has no troubles with coverage, ADP, or ACP tests.

Some plans allow hardship distributions; some don’t.  Imagine that resulted in § 401(a)(4) discrimination in favor of highly-compensated employees.

For a year that ended, what may the employers do to cleanse the discrimination defect?

If it can’t be done by self-correction, what would the IRS ask for?

Doing a DB plan termination. Of the 40 participants with a lump sum greater than $5000, two selected an annuity. We had everything set for June 1 lump sum distributions but the plan sponsor is only now dealing with the annuity purchase. Am I correct that because the Notice of Annuity Information is just now going to be provided they cannot pay the lump sums until the 45 day advance notice requirement is met?