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?

I'm probably overthinking this.  Participant has vested balance of $90,000.  Take out a loan for $35,000.  We display their account balance now of $55,000 and a loan balance of $35,000.  6 months later, Participants wants to take a second loan.  The second loan calculation would be based on the $90,000 ($55,000 account balance plus the $35,000 loan balance) and not just the $55,000 account balance, right?

I'm a sole proprietor that has a Prototype Profit Sharing Plan that was abandoned by a national provider.  Can someone recommend a provider that offers Prototype plan documents? 

Another BenefitsLink discussion includes some observations about how much or how little help the new Default Electronic Disclosure rule offers if an employer/administrator lacks email addresses for the portion of participants who are severed from employment.

A 2002 rule allows electronic delivery if, with other conditions, the employee/participant can access the communications using an email system the employee uses as “an integral part” of the employee’s work for the employer.

Under Wednesday’s new rule, there is no such “integral part” condition and an employer-provided electronic address can be enough to invoke the new regime if the employer assigns the address for some employment-related purpose beyond the retirement plan’s communications.

A retirement plan’s administrator may continue to rely on such an address (if there is no bounce-back or other operability defect) after a participant’s severance from employment.

If an employer/administrator seeks to grow the population of (future) former employees who can remain in the new electronic regime, should an employer assign an email address for every employee?  (Imagine an employer tells its employees that human-resources and safety announcements will be sent to employees’ employer-provided email addresses.)

What do BenefitsLink people think about whether that way is practical or impractical?

Several pieces come into play here. Situation - Employer A has a 401(k) plan. Employee X has a participant loan, and terminates employment in December of 2019. However, Employee X continues to make repayments on the loan, as permitted under A's plan. Employee X subsequently goes to work, for Employer B. In May of 2020, Employee X is laid off from employer B, and is a "Qualified Individual" for COVID purposes. Employee X now defaults on the loan with Employer A's plan. Whew!

First, purely with regard to the COVID loan delay provisions under the CARES Act, Assuming employer A's plan will allow the CARES Act delay, would it apply to a terminated participant from a different employer? I incline toward this being an employer decision when they do the amendment, but I'm not certain.

Second, at the very least, there is a delay in the deemed distribution/offset due to the IRS Notice 2020-23 provisions applicable to all loans with due dates during the applicable period. 

Finally, when this loan does default and is offset, is this a "Qualified Loan Offset" under IRC 402(3)(c)? I would tend to interpret the statute that this would only apply if the offset occurred due to the termination with Employer A, and not because of a termination with a subsequent employer. Thoughts? Other observations? 

(ii)Qualified plan loan offset amountFor purposes of this subparagraph, the term “qualified plan loan offset amount” means a plan loan offset amount which is treated as distributed from a qualified employer plan to a participant or beneficiary solely by reason of—

There's always a new question! Tax-exempt 457(b) plan. Participant retiring, and is going to take monthly installments for some number of years. The recordkeeper or TPA or whoever handles this is going to be charging a monthly fee to calculate each month's distribution. Employer wants to know if this can be charged to the participant's "account."

I've reviewed their plan document, and it is silent on this issue. It provides for payment of Trustee fees form the plan assets if it is a Governmental plan, but this isn't. While it seems reasonable to have fees charged to the participant's account,  (which is a general asset of the employer, not in a Rabbi Trust) I can't find anything specifically addressing this issue in the regs. Is this just a matter of State law? Or have I missed something? Anyone ever dealt with this issue? 

Company A owns Company B

Both companies run separately and have different EIN's.

Company A wants to offer one plan covering all employees equally in both plans.

Single or multiple employer?

So the Employer did not take out 401(k) from bonuses.

Correction is a 50% QNEC (with earnings).

However, the participant's deferrals are Roth.

Is she now losing out b/c the earnings on the QNEC are taxed, where the earnings on a Roth deposit wouldn't have been?

A non safe harbor 401(k) plan with 3 months eligibility wants to add the 3% SH nonelective by December 1 as provided by the SECURE Act.  However, they only want to add this feature for not otherwise excludible employees who are age 21 and have a YOS.  They will test the otherwise excludible group under ADP/ACP.  Can they do this?  I could not find anything that prohibits it.  Thanks for any comments, insights, and citations.

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!