PArticipatn termed in 2018.  Settlement for backwages was reach recently.  Is it eligible compensation?  Well outide the 415 post severance comp window but the interesting twist here of course is that theoretically these wages should have been paid in 2018 which presiumably the employer is admitting by agreeing to the backwage settlement in the first place.  I figure someone must have written an article on this at some point.

I am in desperate need of sound advice. I think I am going to get screwed by Pennsylvania law once again.

 My ex wife and I were married Sept. 1989, separated in March 2008 and were divorced in August 2009. I am a newly retired police officer and she is a nurse. We both have pensions. She is entitled to 25% of mine (I thought up to the date of separation which is 18 years). She was ordered by a judge to give me half of her 401k at the time, about $12,000 so I could roll it into an IRA that I opened. He told her not to touch it otherwise. I never got the money.  The judge required both of us to have a QDRO completed within 30 days following divorce. Neither of our attorneys followed through with our individual QDROs.

Fast forward to now. I am retired and can’t collect my pension. I just had my QDRO done, but my ex refuses to do one. She also says she recently took out whatever money was in that 401k, so the balance is zero. To top it off, the attorney who just did my QDRO says she is entitled to 25% of my entire career of 28 years plus $43,000 of the DROP ( which I paid into from 2017-present).  Is this accurate? How can this be fair? Is she in violation of the court order if she doesn’t get a QDRO done? 

What recourse do I have, if any? Please help...

A participant passes away, and her three children are her beneficiaries.  They are over 18.  They want to withdraw funds to pay for her funeral expenses?  Are they subject to the mandatory 20% income tax witholding and 10% premature distribution excise tax?  I would think not, since they can't roll this over.

It has been a long time since I had to allocate excess assets, and I couldn't find confirmation on this point.

If a plan terminates during 2019, but doesn't allocate the excess assets until 2020, is the benefit increase attributed to the allocation of the excess treated as a benefit earned in 2019 or 2020?   

An ongoing 401k Plan is changing investment vendors and the question has arisen of whether or not they can add auto enroll EACA provisions at this time.

I think the EACA provisions must be first day of the plan year start only (ie. as of January 1st for this plan) and cannot be implemented other times within the plan year.

I've been asked by the advisor if the EACA provisions can be added due to the SECURE Act changes that allow a plan to be set up virtually any time now. 

I am correct in that would be if it was a brand new plan, if the client is adding EACA to an existing plan it still needs to be effective with a Jan 1st date?

Thanks in advance.

are we required to calculate imputed income if we offer life insurance over $50,000? 

If an employee requests information on a benefit plan (medical, life, vision, dental) are we required to provide an SPD for each benefit plan offered?

Hi everyone 

I have 2 companies. 

Company A has existing for some time, I offered a simple IRA out for year 2020

Company B was formed in 2019 (Different state). 

An employee of company A, who has worked with me full time for many years resigned in 2018. Employee came back to company A in mid 2019, and when I opened Company B, employee relocated to the state Company B located in and came on board full time as an employee of company B in 11/2019

Should I be offering this employee the opportunity to participate in a simple IRA, given that employee was working for one of my companies making over 5K for multiple years.  

Or, should this be kept separated and wait for the 2 years period etc?

I own both entities, Company A, 50% with my wife and the company B 100%

I have no problem offering it out, and making up any discrepancy over the past 2 months if needed. Just want to to whats right

thanks

Hi,

In an  S-Corp, owner only DB Plan , the owner did not take  a w2 for 2019. The benefits are based on the 3 highest consecutive years of salary (over entire career). Can a contribution be made for 2019 since  a 3 year salary average was established  from prior years? 

Our legal group has sent me a few drafts of their ICHRA document and I wanted to know if anyone has a template that I can use to compare the content to to be sure we've covered all of the various topics. Does anyone have a template or access to plan document?  Thank you for any assistance you may provide

I had started for this employer in summer of 1998. I was separated from my Ex in in jan 2003 and the Divorce was finalized in summer of 2006. 
the  DRO only mentioned my401k and  not “all retirement plans” ( my attorneys mistake. He has since passed away ) which was 100% awarded to me in the property division DRO.  No QDRO ever filed. 
I retired in 2020 and I think Fidelity is asking for QDRO ( not sure b/c they are very non responsive and no transparency about the process). 

What if I ask my ex for an affidavit that he understood the terms of DRO to include all retirement?  If my Ex agrees to do this will this be enough for the plan admin/ fidelity? Or it must be a court approved document?
A few related questions:
Do I get the QDRO? Or fidelity will provide?
Do I use theirs or get an attorney to draft one? Does the QDRO has a place for AP / Ex Sp  to sign off without getting a % of pension? dies the Qdro outlines the  $$ of pension for both participant and AP? Does Fidelity calculate that in their QDRO?

Thank you for taking the time to reply

I don't work with cash balance plans, so please forgive me if this is a simple question. 

1.411(a)(13)-1(d)(4)(I)(C) says "If a variable annuity benefit formula adjusts benefits by reference to the difference between a rate of return on plan assets (or specified market indices) and a specified assumed interest rate of 5 percent or higher, then the variable annuity benefit formula is not treated as being reasonably expected to provide a smaller total dollar amount of future adjustments for the participant than for any similarly situated, younger individual who is or could be a participant in the plan, and thus such a variable annuity benefit formula does not have an effect similar to a lump sum-based benefit formula."

What is the significance of this exception, other than that a plan with this type of formula wouldn't be a statutory hybrid plan? The 2010 preamble mentions that people wanted this exception widened to apply to more plans, so it seems there must be some advantage to fitting within the exception. 

A participant’s salary-reduction agreement called for $961.54 per pay.  The employer did this for all 26 pay periods, with no change to December’s last pay.  The participant’s deferral limit for 2019 is $25,000 [$19,000 + $6,000 age 50].

Assume the employer/administrator is unwilling to use the plan’s provision for a return of a mistaken contribution.

Must the plan’s administrator instruct the plan’s trustee to pay the participant a corrective distribution of $0.04?

Is there any non-frivolous argument for treating this as so small that a correction is unnecessary?

We took over a plan and discovered that a participant died ten years ago and her balance is still in the plan.  Had she still been alive, she would have hit 70.5 a few years ago.  All the plan sponsor has for beneficiary information is a few names and phone numbers, and when they were called, all are no longer in service (and there was no SSN information, so any detailed search is out).  The old plan document (before we restated it when we took it over) said that all benefits would have to be paid out within five years of death... and that clearly wasn't done.  The prior TPA was just one person at a CPA firm who was doing bare minimum (calcs, 5500s, amendments/restatements), so it seems this never was discussed.

I don't think that our usual  rollover partner, Millennium Trust, takes distributions for deceased participants (at least, not knowingly).  And it seems a little late to try and pay it to an estate now.  Any suggestions for the best thing to do with this $1,600?  Thanks.

Distribution requested at $1,000

Related Fees are $100

Would the 20% withholding apply to $1,000 or $900?  (So would 1099-R reflect a $900 or $1,000 distribution?)

Reviewing prior TPA contract, there is a 45-day notification requirement to terminate. What rights does TPA firm have to provide billable services in that time period when Plan does not want it?

On a recent takeover, we found that the account for one of the two participants is an IRA. The plan is a profit sharing plan and not a SEP or SIMPLE. Contributions for this participant are being recorded in the IRA as rollovers, however no distributions were reported on the Form 5500 and the value of the IRA was being included in plan assets.

The obvious correction is to transfer the IRA assets to an account which is under the trustee's control. Whether this can be self-corrected or needs to be done under VCP would depend on whether the failure is significant, as it has extended well beyond 2 years.

It could be considered significant in that it affected 50% of plan participants and a substantial portion of plan assets. It might also be considered insignificant as there was no impact to any participant's financial or tax situation due to the failure.

Has anyone ever encountered this type of failure before? How did you handle it?

Does anyone know if Datair will calculate a QNEC for a failed test?

If so, how?

H?ave never really seen much on these, probably because I haven't looked. I'll have to do some reading! But suppose you had a business with only 5 employees, who only wants to make employer contributions to an HSA for their employees, because they (employer) can't afford to pay insurance premiums. All employee/insureds are under a HDHP.

Is there any reason why a "SIMPLE" 125 plan wouldn't be appropriate here? Employees would presumably also contribute to the HSA.

Participant is living in her car due to being evicted last week. The plan uses the IRS safe harbor hardship standards which list a hardship may be taken to "prevent eviction or foreclosure". Is there a way for the participant to qualify  for a hardship on account of an eviction that has already occurred? She received a Court order of eviction for a date in the past - last month - but is just now applying for the hardship. Of course now she does not have rent, but needs money to live! Is there any way she can get a hardship at this point? Thanks!