Client contributes 7% as er contributions if ee contributes at least 5%.  Less than 5% employees receives $0.  In testing this plan for nondiscrimination testing, would it fall under ACP or 401(a)(4)? 

my company offers 401K, but they're shady and don't deposit the funds in the 401K acct for months and only do it when they're caught after multiple reminders and much pressure. also no match. tired of the cat and mouse game with them. would like to contribute nothing this year and instead do my own IRA.

if i read this right https://www.irs.gov/retirement-plans/are-you-covered-by-an-employers-retirement-plan , if i contribute nothing to my 401K all year, then i'm not considered covered and i can contribute to IRA as if my employer didn't have a 401K plan.

am i interpreting it right?

Hello:  We have a client whose plan allows for hardships from 401k Deferrals and Safe Harbor sources using the safe harbor rules.  The participant is in a situation where his dependent needs to have a $2,000 prescription each month, and the medication is not covered under their insurance coverage.  The participant initially asked if it was possible to get a hardship to cover the cost of the medication for the next 3 years ($2,000 each month for the next 36 months).  My argument here is that he won't actually have proof of the hardship for a total of $72,000 - he'll only have a monthly bill for the medication.  Which leads me to him having to submit a hardship request each month to cover the cost of the medication.  Anyone have any other thoughts on this?  Suggestions?

Medical plan requires that a participant be "actively at work" to be eligible. The definition of "actively at work" includes the following:

"As required by HIPAA, absence from work due to any health factor (such as being absent from work on sick leave) is treated, for purposes of the Plan or coverage under the Plan, as being actively at work."

I have not ever heard of such a requirement under HIPAA. What provision(s) of HIPAA or the regs address(es) this?

As always, thank you!

I’m divorced for 7 years and all property and assets were split but not retirement and pension (QDRO). When we split we used her lawyer who was mediator trained and it greatly reduced the cost. I hired a lawyer to look over what I was signing as I needed someone with a fiduciary relationship towards me. Divorce went fine, I had my attorney draft QDRO through my company trustee for 401k and pension (and I paid to do that) but my ex and her lawyer for some reason never signed it(didn’t understand or didn’t want to deal with it). My lawyer a few years go said don’t press the issue as if he never signs it then it will not be agreed and not split (she passes away - I do not wish that as we have children).  

Pension if I work for 30 years she could be entitled to portion the 10 years while married (1/6 of pension)

401k when I had 600k her portion was 200k (from my recollection). Since I have been maxing it out and it’s grown is worth 1.2M. Don’t know how much her portion of growth would be but I imagine it would be 400k. Clearly that will need to be recalculated by working through the pension/401k trustee.

Question: should I bring this up and settle (ex will likely think I’m doing that for nefarious reasons - just always thinks I’m up to the worst despite trying to give her what’s fair) or should I listen to my lawyer? 

Benefits to do in my mind are to get it behind me and have clear understanding of what’s in my 401k. Downside is dealing with her on this and purely losing financial benefit. Clearly there is a legal recommendation and a ethical consideration (I always try to do right thing but it will come with drama and argument)

I appreciate anyone who has had experience on this topic.

We have a situation that I am trying to sort through.  Attorney sponsors a prototype document from a national provider.  Gets opinion letter on that document so all of the sponsored plans adopted by plan sponsors are covered by an opinion letter for that firm.  Attorney is retiring and will no longer sponsor the prototype effective 3/31/2020.  Plans adopted are in essence abandoned.  Per my reading of 2015-36 Section 10, those plans can’t rely on opinion letter and now fall into IDP arena.  

Assuming all amendments are up to date by 3/31/2020, is the biggest issue with entering the IDP arena is, if I understand, that the Plan wouldn’t be eligible for SCP under EPCRS.  Am I missing something?

ideally, we’d like to restate to our document (which conveniently enough is through same national provider) when Cycle 3 becomes available, hopefully before 12/31/2020.  They would avoid clients having to pay for a restatement to our sponsored PPA document  followed in close timing to Cycle 3 document.  

What risks am I missing? Are we on right track?  What would you do in this situation?

Husband and wife own a small business and sponsor a qualified retirement plan.  Both are over age 70 1/2, and take RMDs.

Husband died in 2019 before taking RMD.   As his beneficiary, wife took his RMD, and also took her RMD.  The balance in the plan was then rolled from the pooled account into an IRA in the wife's name and the plan was terminated, in 2019.

The questions is:  how many 1099-R forms must be filed?  One for his RMD paid to her from the plan as beneficiary, and one to her for her own RMD from her account in the plan, and a third to her for the rollover to the IRA.  Is there any reason to do a separate RMD for his remaining balance in the plan that rolled to her IRA?

Thanks!

I apologize, I'm sure this question has been asked and answered - so if someone could point me to the correct thread, I'm happy to read up on it. 

I also wasn't sure if this question was better suited for the distribution message board or this on. 

I don't deal with PBGC covered plans often - so my apologies in advance if I am using the wrong terminology or asking the wrong type of question. 

PBGC covered plan - terminated and closed. There were a about a dozen participants whose benefit was sent to the PBGC per the lost participant rules. 

We are now preparing 1099-Rs for the plan. The participants who elected something ( lump sum cash, rollover, etc) I have no problem preparing the 1099-Rs. But I don't know how to report those whose benefit was transferred to the PBGC. 

Do they get 1099-Rs? I'm thinking yes - but I've been wrong before

If they get a 1099-R what code goes on the form?

I'm sure there is a publication or guide that deals with this - I'm just not sure where to look. 

I called the PBGC for an answer and was told I would get a call back - but I haven't heard yet so thought I would ask all you smart folks here. 

The flat benefit formula using the fractional accrual rule--the question I am having is when is the 415  comp limit first applied. Is it to the projected benefit first, or  to the accrued benefit. We have  a plan document where it is not specified.  My interpretation has been that without specific language in the plan as to when it is applied, it seems it should be applied to the projected  benefit first since we can't accrue a fractional benefit to something that exceeds 415. In this plan the normal retirement benefit is 300% of average comp for 25 yrs of service at NRA.  Consider an employee who is 40 yrs old, NRA 65 and has $300,000 average salary. 

I am trying to determine the proper calculation for an RMD for a non-spouse beneficiary.

The original account holder was a greater than 5% owner and was taking RMDs before the time of his death. His sole beneficiary, his wife, became the account holder and opted to leave the funds in the plan. She continued to take RMDs using the uniform life table based on her D.O.B.

This beneficiary, now the account holder, died and the account fell to her sole beneficiary, her daughter. Her daughter opted to leave the funds in the plan as well. The beneficiary was 88 at the time of her death in 2017, in 2018 she would have been 89. Using the single life table, this results in a factor of 5.9. The daughter was 68 in 2018 which results in a factor of 18.6 using the single life table.

Is the single life table the correct one to use in this situation?

If so, am I correct to use the greater factor of the two and reduce the 18.6 factor by one each following year?

If not, what is the proper way to calculate the RMD for the daughter?

We have one participant for which RMDs should have been taken for last ten years, and were not.  Since it is only one participant, we think we can use SCP (even though it is several years) to correct.  My question is the correction process and how to report it.  We intend to calculate the missed RMD amounts, with earnings.  When we distribute those amounts, do we just issue a 1099 for 2020 and the participant includes in income for 2020?  Or does he have to amend each tax return and include the individual RMD amounts in the year each one should have been paid?

For the Form 5329:  do we file one form for all of the years?  or do we file a 5329 for each year impacted?  We plan to request a waiver of the excise tax.  My understanding is that we fill out the form and request the waiver without actually paying the excise tax.  The IRS will come back and either grant the waiver; or deny the waiver and then demand payment of the excise tax at that point.  Is that correct?  If the waiver is denied, how do we report payment of the excise tax?

Good Morning,

Have an integrated profit sharing plan, that is top heavy.  It also has basic safe harbor match as well as discretionary match (66.67% up to 6%)

I have a new participant that entered 7/1, the plan uses date of entry comp.  I am trying to determine her profit sharing allocation.

i.e full year comp 30,000, entry date $15,000, she is receiving the SHMT 3.5%, her disc MT is 2.68% of  entry date comp

When i run the profit sharing, (the allocation is 3.22%) should she get 3% of full year, or just the 3.22 of entry date comp? 

Between all employer sources she is receiving greater than 3% of full year comp. 

I just want to make sure meeting the top heavy requirements for an integrated plan.

Thank you for your help!

I know quite a few years ago the rules were changed by getting rid of the 3-day rule regarding the length of some 80-26 loans, but I have not been able to find any guidance regarding how long such a loan can remain unpaid.  Also, seemingly absent is anything addressing the amount of the loan in relation to the amount of ongoing expenses.  For example, a large profit sharing plan is constantly making distributions to terminating participants.  The plan's assets are held in two accounts, one with TD Ameritrade for all of the equity investments, and a bank account specifically for payouts.  The trustees are reluctant to liquidate securities to make the payouts and would prefer to make 80-26 loans to the bank account. The trustees, who try to pay terminees asap, try to invest as many assets as possible in stocks, thereby sometimes leaving the plan cash poor.  Would it be acceptable for the employer to loan the plan $40K so that terminees over the next few months can be paid out when the actual amount of cash needed is currently unknown (which could result in the cash just sitting there for months)?  How long can the loan remain outstanding? 

I'm guessing there may not be any restrictions regarding how soon an expense must be paid after the plan receives the loan.  In the absence of any guidelines, I would be curious to hear how such loans are typically handled, especially since loans lasting over 60 days must be in writing and I'm not sure how to word the promissory note.  All help is greatly appreciated. 

We have a 401(k) plan that terminated effective 03/31/19.  Last contributions were paid to John Hancock 03/04/19 and last participant distributions made 08/19/19.

For the final 2019 ADP testing, do we use comp only through 03/31/19 or the full year, or is it our choice?

We have a 401(k) plan that terminated effective 03/31/19.  Last contributions were paid to John Hancock 03/04/19 and last participant distributions made 08/19/19.

For the final 2019 ADP testing, do we use comp only through 03/31/19 or the full year, or is it our choice?

A large payroll company (10,000+ payroll clients) marked box 13 with an X for a 401(k) participant who made no elective deferrals to the plan nor receved an employer contribution for 2019.  There is no DB plan.  So the employee received no employee or employer contribution into the plan account in 2019 nor was there any employer accrued contribution 2019.  The employee was planning to do a deductible max IRA.  the employer specifially told them - no X for this person.  The Payroll company said because there were 401(k) loan payments they had to mark Box 13 with an X.  That has to be wrong in my opinion.  I gave them the IRS instructions on this with examples of no employee nor employer contribution but it doesn't say anything about loan payments - probably didn't think it needed to!  Comments?

We are part of a CPA firm, and perform plan administration and reporting services for clients of the firm.  Mid-2019 we billed plan sponsor for 2019 plan work.  Plan Sponsor was not happy with the amount of the bill and told CPA they were going to find someone else to do TPA work, but CPA would continue to do their accounting and tax work.  Today we learn they did not like other TPA options and so decided to stay with us.  Unfortunately, they did not inform us (or the CPA) of that decision.  They want us to continue to perform TPA work and reporting for their plan for 2019 and going forward.

During the time we thought we were fired for TPA work, we prepared the SH notices for our clients, but did not prepare one for this particular client, thinking they had another TPA doing their retirement plan work.  So I think it is highly probably that no SH notice was distributed to participants.

They have had a SH 401(k) plan for several years, and deposit the SH contribution along with the employee deferrals every pay period.

Can they still be a SH plan for 2020?  Any options??

Thanks!

We had a large plan client that stopped communicating with us and stopped filing 5500s several years ago.  Now they have contacted us to bring the plan up to date.

This will mean DFVC filing for 7 years (thru 2019) - all large plan 5500.

Q:  Do they need a separate audit for each year or can they use one comprehensive audit for 01/01/13 through 12/31/19?

Plan Sponsor changes name and plan name in middle of the year.

What name should be used on 1099R forms and 1096 forms?

Old name or new name?