Hi,

I'm new to the board and I have a bit of an odd question. I'm dealing with an employer that was a party to a CBA in the past and part of the CBA required contributions for health and welfare to a multi employer trust. The Union unilaterally decertified some years ago, which prompted the Trust to perform an audit. In performing the audit, the trust determined that health and welfare benefits were owed on certain individuals. However, those individuals expressly opted to not receive the health and welfare from the Trust, because they could not afford their employee portion. As a result, these employees received health benefits through the employers non-CBA health insurance plan used for non-union employees. The Trust indicated that employees could refuse benefits, but they needed to file a form to do so. Obviously, these forms were never made available to the employees, nor did the employees know about this form. However, the employees expressly refused the Trust benefits to the employer, and did not want money withheld from their checks for contributions to the trust. The trust is seeking past due contributions from October 2010 through October 2017. The trust admits that no health and welfare benefits were paid to these employees, and it is clear that the trust will never (nor can it ever) provide health and welfare benefits to these individuals pursuant to its own Trust agreement. Anyone aware of any cases where a trust is seeking contributions for unpaid health and welfare benefits where the Trust never paid for the benefits in the first place? I will also note that the trust was not a self insurer in this instance. Pursuant to the CBA, the Trust was to purchase health and welfare insurance for the employees. It was not utilizing a pooled account. Let me know if anyone has any thoughts. Thank you.

We have a client with two plans (DB & 401k), and there are only two participants - the owner and his mother.  They have asked if they must have a bond.

I think that since technically it is an ERISA plan, a bond would be required, but it is only owner and momHow would you suggest I respond?

Group:

I am looking for studies performed after 2008-2010 market crash/recession that shows a greater number of employers wanting to set up an ESOP

vs. that of having employees retirement at risk of wall street casino.  I have found a few but not sure they are exactly what I'm looking for.

Thoughts and comments appreciated.

Thank you

Just because I don't generally handle SEP.

Participant has maxed out on his 401(k) at his employer, but he also has a side business where he has a SEP.  I don't believe that he can put any EE money into the SEP, but even if he's hitting the $56k between EE/ER in the 401(k) he could also maximize the ER in the SEP right ($56k)?

Let's say you have a 401(k)/PS, Safe Harbor nonelective, with 1 month eligibiity for deferrals, (entry date first of month coinciding with/next following satisfaction of eligibiity requirement), and 6 months/500 hours (entry date  1st of month coinciding with/next following satisfaction  of eligibility for both SH and PS. Plan IS top heavy. PS plan is cross tested, everyone in own group.Compensation for SH/PS is from date of participation.

So some people enter on 10/1/2019 for deferral purposes, and therefore get top heavy. Therefore, unless the "plan" of employer nonelective contributions is disaggregated, they are also required to get gateway. However, they have not yet satisfied the eligibility requirement to be able to receive a PS. Now let's suppose the "plan" does disaggregate the OEE's, so they are no longer required to get gateway. 

Two items to see if my memory serves: If the employer does NOT disaggregate the OEE's, how would one allocate a Gateway - seems like this situation would preclude cross testing. Agree/disagree? And IF the employer disaggregates the OEE's, and WANTS to contribute a PS for them, I recall the employer would be able to allocate to those OEE's who have otherwise actually satisfied plan eligibility, (say they were hired in February of 2019, for example) but gateway would still not be required, and this disaggregated "plan" could still not cross test. Agree/disagree?

Sometimes I think I remember things, and find out I don't...

P.S. - I suppose I should have considered document provisions that allow a gateway allocation  to participants who are not otherwise eligible to receive it. Some documents even allow it to people who are disaggregated if it is necessary to satisfy 401(a)(4). That wasn't available in the really "old" documents, and I think the "old" documents are what I'm remembering.

Questions re due date for corporate contributions to DC plans:

• We know corporate contributions now due 15th of 4th month (04/15 for calendar year).  Does this apply to both S Corps and C corps?
• Does extension now extend them to 10/15?
• We have plan with fiscal YE 05/31/19.  This means we file 2018 version of 5500s.  I can't find anything that tells me when that contribution is due - would it be 02/15/20 (old rules) or 03/15/20 (new rules)?
• Exactly when was this change effective?

I am just having a lot of history researching it to find out the history.  Everything I find just addresses current rules. Thanks for the help.

Company has two plans (A) 401k/Match (B) Profit Sharing.

Together they are top heavy (and individually, too).

Plan (B) states the TH will be made to Plan (B)

Plan (A) is silent on the issue.  The section in the Adoption Agreement does not even mention the existence of the other plan, it's entirely blank.

Does that mean technically the TH is due in BOTH plans?

Client has frozen plan with a subsidized lump sum interest rate using the 30-year Treasury less 50 bp. 

Plan is currently partially restricted under IRC 436, but in the current environment lump sums are valued at 1.16% - OUCH!

Does anyone have experience with or knowledge of getting a PLR allowing removal/changing of an unsustainable provision such as this? We know this is otherwise protected, but in the interest of protecting the future viability of the Plan we are looking into options.

Thanks

Group:

Clients' retirement plan (ESOP) is being audited by DOL for tax year 2017 to present.

As a side note, clients' same retirement plan (ESOP) has two audits running concurrently with TEGE and SBSE. 

My queries relate to properly responding to initial IDR and whether stating request is outside of statute of limitation is appropriate. 

1. Per IDR, DOL is requesting records (such as articles from plan sponsor entity which was set up approx 10 years ago). 

Is it appropriate to state in response: Outside of statute of limitation. 

How do other practitioners respond?   Send everything?

2. Also, IDR is requesting service provider fee agreements which would include my own attorney engagement letter. 

I've read conflicting articles and research saying that attorney fee agreements are not protected by atty-client privilege and other resources saying they are. 

I'd prefer not to give the govt carte blanche. 

Thoughts and comments appreciated.   Warm regards 

Joe Dadich, Esq. 

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