Employer pays the President's family coverage under group health insurance plan per an employment agreement.  For other employees, employer only pays for employee-only coverage (employees pay for any more on their own.  This clearly is discriminatory under IRC 105(h).  But does it violate the IRC 125 cafeteria plan rule against discrimination as to contributions and benefits?

Can you help with the following scenario:

P sponsors a QRP.  R and P are related employers, and R's employees participate in P's plan.

C and R are brother-sister companies.  

Just by the nature of C and R being brother-sister, does that by default pull C into the ASG with R and P?  Or would C be part of the ASG only if it satisfies the ASG rules on its own?

Thanks.

Opinions please on this unusual fact pattern.  Participant leaves employment with a vested benefit in a defined benefit pension plan in 2017.  Plan provisions permit him to elect an immediate lump sum distribution upon completing the appropriate forms and submitting certain documentation.  One item included in the application package is a Spousal Consent that must be completed by his spouse.  Note: he covered his spouse under various health and welfare benefit plans during his period of employment.

When he received his pension application, he indicated that his marital status is 'single-never married'.  We pointed out that he presented himself as being married during his employment.  He stated that he lied about his marital status and that he was not never married.  We prepared affidavits for him and the person who is not his spouse (PNHS) to complete.  He completed and submitted his own affidavit stating that he was never married to PNHS.  He indicated that he did not have a current address for PNHS.  We performed a search and sent the affidavit to PNHS via regular and certified mail. PNHS never submitted the affidavit, and did not sign for the certified mailing.  The affidavit sent by regular U.S. mail was not returned as being undeliverable.

Participant, of course, is super anxious to receive his distribution. We suggested that he submit an official copy/transcript of his federal tax return from the IRS for the final year of his employ with the company.  Our thought was that it would agree with his true marital status and along with his completed affidavit would permit us to distribute his pension.  Initially he stated he would request and send the tax return, then he stated that he did not file a return for that year/any year.  Recently, he is claiming that we have no authority to request copies of his tax return. 

Any suggestions?

Does the owner of a sole prop need to have current year income to have the Excess Asset from QRP Suspense Account Allocated to him over seven year?

There is some mention of the 415 applicability to limit the amount allocated (see attached).   But I didn't find anything that tells me if an owner of a sole prop needs to have current year income to receive allocation as the case would be if it was not from QRP.

irs_plr_2008-36034.pdf

Wondering,

anyone seeing (or acting on) situations where the 1/1/2020 funded ratio is "high" (90% or above) and the plan sponsor is instructing the actuary not to issue the 2020 AFTAP certification, thus letting the default percentages apply?  Could be useful when (1) the plan allows lump sums greater than $5,000 and (2) the sponsor is trying to save cash in the plan very soon after the assets have taken a dive. 

Any other thoughts on the process? the communication? etc?

Please consider the following facts:

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