We took over the administration of a 20 participant 401(k) plan about 6 months ago.

The plan uses one of the popular investment platforms. It works very well for the 401(k) plan. Apparently, over the past 3 years up to 10 participants (all under age 59 1/2) have taken in-service distributions of all sources (including salary deferrals). They claim they all wanted to move the accounts to their IRAs that are invested only in no load funds and have no fees. We did notice two participants took lump sums and did not directly transfer to IRAs.

Could this be corrected under VCP? If all just transferred to IRAs perhaps the fix would have been moving the amounts back to the plan (with earnings/losses). However, the lump sums pose a problem. Any thoughts?

Thanks.

What with a current downturn in the market, how long can a plan sponsor wait to distribute assets, having received completed distribution forms, including 30-day waiver?  (for a pooled account)

It is my understanding that a multiple employer plan must have a participation agreement in place for all entities including the sponsoring plan. If the sponsoring entity does not have a participation agreement can this be self corrected or must it go through VCP filing.

I'm looking to find the specific names of companies that have implemented Phased Retirement Plans, specifically allowing in-service distributions from the existing defined benefit pension.  Googling has only turned up generic articles on the subject. 

Thank you in advance for your help.

The 403b doc was restated, and now it is being amended again.  Does this new amendment need to get it's own administrative addendum to show that it's the change from the previous version?  Or does it get added onto the addendum that they had from 2010 that listed all the changes for the past ~10 years?  Thanks.

I have a client that included prior term and re-hire dates on the 2019 census. Should the prior year term and re-hire dates be taken off the 2019 census since they were already included on prior year census files? I would think that they could be taken off, but I'm not entirely sure.  

Thanks in advance for help.  

2019 Funding Requirement $100k,

Carryover Balance $0

Prefunding balance $150k

Employer elects to apply $40k of PFB towards funding requirement, but later makes $80k contribution (let's forget about discounting for this)

This results in excess contribution due to credit balance of $20k.  Does employer have option to add back the excess contribution to PFB, adjusted for actual return on assets?

Thanks.

In 2018, small plan sponsor adopted a SH 401(k) plan with SH match provisions, using the FtWilliam BPD.  For 2019 plan sponsor wanted to switch to the SH NEC so we prepared the SH notice with that language to hand out to employees by 12/1/2018.  Again for 2020 he wanted to do the SH NEC so again the SH notice had the SH NEC language and was distributed to employees around 12/1/2019 (right before the SECURE Act was signed).

Now that notices are no longer required if a plan sponsor wants to do the SH NEC, does the plan document need to be amended to remove the SH match language?  

Thanks.

Plan document states that safe harbor matching contributions (SHMAT) are determined/allocated on a plan year basis. Client makes SHMAT contributions payroll by payroll throughout the year.  At the end of the year, true-up contributions are needed. My question is: do the true-up contributions need to be adjusted for earnings?

Does anyone know of any updates on the upcoming Plan Restatements due to begin on 05/01/2020?

So I signed a QDRO when divorcing my husband after being married 17 years of marriage. I relinquished rights to my husband’s pension, in trade, I then got the funds that was in his annuity. A year later, we remarried. We were then married another 5 years until he passed away last year. I am receiving his pension but only half of what we thought. I’ve brought this to their attention and now they want my divorce decree. My question is, since I relinquished his pension when we divorced, can that affect me receiving it now even though we remarried? He passed away 6 months ago and as long as I don’t push it, they aren’t doing anything about it. But when I brought this to their attention, they got a company lawyer involved. Obviously getting something is better than getting nothing so I don’t want to push for the rest if I could potentially lose it all!! 

Is anyone aware of a source for a complete (and current) list of the various lawsuits in the recent high-profile actuarial equivalence litigation?  I believe there have now been 11 different cases filed, but want to confirm that I'm not missing any.  Thanks!

Client would like to allow employees to defer from all compensation, bonuses, etc.  Client wants to match on only base compensation, however.

The match is 100% of the first 3% of compensation deferred.  Since the match would be capped at 3% of base compensation, I'm assuming I have testing issues?

If the allocation compensation passes the compensation ratio test, am I good at that point?

Or do I need to test the match rates for BRF?

Thanks very much.

Client would like a two tiered match formula in which up to the first 4% of compensation deferred is matched at 0%.  Second tier 4 to 6% of comp matched at 50%.

Since each participant is matched the same at each level of deferral, is this an effective availability issue?  And assuming the match is communicated to all participants, an acceptable match?

Thanks very much.

Plan has consistently been using the prior year method testing otherwise excludible employees separately.  In 2017 plan failed testing but did not do refunds in time so plan can not permissively disaggregate otherwise excludible employees to calculate the refund/contribution under the one-to-one correction.

Is the one-to-one simply a correction mechanism, or does it cause the plan to have a change in coverage for testing purposes because 2016 and 2018 are being tested on an otherwise excludible basis but not 2017? 

I could not find anything specific in the statutes or guidance, and appreciate all comments. 

Thank you for this Forum. I have been a loyal follower, but have never posted. I work for a third-party administration firm. My question involves an issue that has occurred for one of our client plans.  I have searched for this topic on this Forum, but have not been able to find any prior threads. If there are other relevant threads, I would appreciate your reference to therm.

Have you had experience with determining whether a trust is in existence when a death benefit becomes payable from a 401(k) plan?

FACTS:  In 1989, a participant named his parents' Family Trust as the primary beneficiary of his 401(k) plan account (and a non-family member as the contingent beneficiary). The participant was the sole beneficiary of the Family Trust upon the death of the last of his parents.

In 2016, the participant set up his own Revocable Trust, but did not change his 401(k) plan beneficiary to be his Revocable Trust. The participant passed away in 2019.  

The trustee of the Revocable Trust has filed claim for the 401(k) plan death benefit.  Since this is not the trust named as beneficiary, the Plan asked for a copy of the Family Trust. The trustee has provided a copy of the Family Trust, but stated that the Family Trust no longer exists. There is no language in the trust documents connecting one to the other. The Plan has denied the claim, on the basis that the Family Trust no longer exists.

The Plan has now received a letter from the attorney representing the Revocable Trust, who has argued that the Family Trust still exists. The attorney has cited 26 CFR 1.641(b)-3 as authority that the trust continues. This regulation deals with termination of trusts in relation to federal income taxes. There is no reference to California trust law or any case law.

The Plan is now faced with determining whether the Family Trust still exists for purposes of paying the death benefit. I welcome any thoughts you care to share.

SS-4 for a plan listed plan name as "ABC Defined Benefit Pension Plan and Trust".  Adoption Agreement mistakenly showed plan name as ""ABC Defined Benefit Pension Plan and Trust"".  Plan is a couple years old and our actuary caught the mistake.

What is the best way to resolve this?  Would it be appropriate to do a retroactive amendment to correct the original documents?

I am just wondering if any of you have had a plan affected by a blackout period where deferrals were submitted  Late because there was an issue with the new provider accepting them?....Did you calculate lost earnings on the late deferrals?  

Hi,

We recently received K-1 for the partners. I'm not as familiar with the K-1's For the Form 1120-s as I am with the others. That being said, I'm not sure where to find the earnings that I will need to be used in the profit share allocations.

Can someone direct me?

Thank you!