My understanding is that the extension of the deadline for Required Minimum Contributions until 1/1/2021 is only for defined benefit plans and does not include money purchase pension plans.

Am I correct?

I personally would not consider a "length of service" bonus paid to be a taxable fringe benefit but I am encountering a plan where it was treated as a safe harbor comp exclusion taxable fringe benefit. To add a little more color, people who have been with the company 0-5 years to get nothing, between 5 and 10 get 1,000, between 10 and 15 get 2,000, etc. 

This is all the more important for this plan because it is a Safe Harbor Plan, and I'm tying to determine if the definition meets a 414s safe harbor definition of compensation.

I guess it falls squarely within a gray area, but in such cases I would lean towards the more conservative.  what do y'all think?

Curious as to how this is handled in most plans - specifically, tax exempt plans with no Rabbi trust. Some plans allow participants to direct "their' account (although of course it is employer money) and others don't. 

When it comes time for the participant to elect a distribution, and they choose "substantially equal" monthly installments, do the plans you see:

A. Take the account balance at the time of distribution, divide by the number of months, and pay a fixed payment - interest or losses on the funds absorbed by the employer.

B. Still allow the participant to have investment control, and the "substantially equal" payments can fluctuate with the underlying market value?

C. Other?

I've only seen "A" but I don't see many 457 plans.

We have a PR plan that only uses base pay for their definition of compensation.  So they have excluded comp.  Does this require 414s testing?  Does it matter if it is dual qualified? Do you have the PR code reference?

My understanding is that, for valuation purposes, accrued dividends are not included in the market value of assets. Is that correct?

Thanks very much.

Hello - 

I have an instance in which an employee met their annual limit for 401k, but the payroll was configured incorrectly and it deferred once more beyond the annual limit. RK says 402(g), but with the market how it is, it doesn't seem fair the employee would take a loss on their excess distribution since it was employer's mistake. Is there an alternate solution? I was thinking about reversing out the excess deferral plus earnings/losses through the plan and reversing the deduction through payroll so it's taxed properly for the employee. Any advice is appreciated.

For small sized TPAs, what kind of backup material, if any, are you keeping on file to support your PPP need for the loan application?  Ours was approved but we are wanting to be sure that we are able to prove that it was needed.

Can a plan sponsor adopt the special distribution under the CARES Act and offer the benefit only to terminated employees? The plan sponsor wants to avoid having a host of active employees taking advantage of the benefit. And what about employees terminated participants who have taken pre-59.5 distributions - are they going to avoid the 10% penalty if the plan sponsor does not amend the plan for CARES Act benefits?

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