A client maintains a self-funded group health plan for its employees. There is a proposal to amend the plan to subject reimbursement for infertility services to a lifetime maximum of $25,000 per family  for in-network and out-of-network care. Are infertility services considered an essential health benefit which would make the proposed lifetime limit illegal?

Hi

Drawing a blank.

Looking at a combo plan design which is not the way I do but asked to look at it.

DC plan provides ADP SH Match, standard 100% up to 3% + 50% between 3%/5%.

PS portion has 1000 hours plus last day rule.

2 participants terminated with 750 hours and prior to EOY however they bot deferred.

Employer wants to make a profit sharing contribution (they are aware of the additional cost as they do not have 3% non-elective SH)

The plan is also combined with a DB plan so testing together. Let's say the gateway minimum is 7.5%.

Top heavy only in the DC plan (5%) and also required last day rule.

Assuming that the terminated employees were not excluded in the DB (and not accruing any benefits), do they need to get any profit sharing as gateway? 

If they are excluded within the DB plan categorically, I do not believe they need to get any PS allocation, correct?

Anything else I missed?

Thank you

A new plan is effective 1/1.....However, the plan sponsors did not get it all set up until later.  Deferrals started 10/1.   Do they have to  pro-rate either the deferral limit or catch-up.  I don't th ink so , but have seen conflicting opinions.  What about compensation?   I am thinking they use just 10/1 through 12/31?  actual compensation? 

I get that when a plan terminates unless a loan is paid back prior to distribution it is offset.  Can the participant pay back the loan after distribution?  For instance, deposit the outstanding loan balance into their IRA within 60 days?

Thanks

Under the old rules (pre-Secure Act), if you wanted to start a brand new SH plan the plan would have to be in effect for three months in the initial year. I assume this rule is still valid for safe harbor match plans but what about Safe Harbor nonelective 401(k) plans? Can you now adopt a safe harbor nonelective plan in December of its first year with the new changes of the secure act? Or does the 401(k) arrangement still need to be in effect for 3 months for either type? I just want to know if the ability to retroactively amend the plan to be safe harbor up to 30 days before the end of the plan year (and even after the year is over if 4% contribution is used) under the secure act applies for the first (initial) plan year? 

If I start today to learn compliance for 401(k) plans or for that matter all the DC Plans. What are the basics that i need to take care of at first to gets the fundamental right?

Is it unlawful for a severance pay formula with a 12 month look back to reduce the months worked by FMLA leave time taken by an employee? If all leave time is not included in the severance formula?

This is a long way off for us, but when the time comes to see a TPA business, how are terminated plans/clients or plans that moved on to another TPA typically handled?  For example, we have clients that have been gone for 3, 5 even 10 years.  If we were to sell the TPA business, who maintains responsibility for any out-of-the-blue questions or follow ups on those old clients, the new TPA or the one that is selling?  I assume that gets worked into the sales agreement, but in general, does the new TPA take that on?

Thanks

I HAVE A CLIENT WHO'S A SELF EMPLOYED ATTORNEY, SCHEDULE C FILER, AGE 65, AVERAGE ANNUAL COMP OF $700,000 (NET SCHEDULE C). SHE MAXES OUT HER DC EVERY YEAR AND WANTS TO CONTINUE DOING THAT.  STARTING THIS YEAR, HOW MUCH CAN SHE PUT INTO A DB ON TOP OF THE DC? iF ANY.

tHANK YOU.

I have not had a noncalendar RMD for DB/CB for many many years so a bit rusty (if a DC, based on 1.401(a)(9)-5, Q&A, based the latest val within the calendar year prior to he distribution due)

Cash balance plan, effective 7/1/2019 with 6/30/2020 year end.

Vesting is 100%  after 3 years and no service prior to 7/1/2019.

Participant who is already over age 71, will be 100% vested at the end of 6/30/2022.

When is the first RMD due, 4/1/2023? What benefit do I have to use?

For example

AB at 6/30/2021 is $1,000/month (0% vested)

AB at 6/30/2022 is $2,000/month (100% vested)

RMD at 12/31/2022 is?

RMD at 4/1/2023 is?

Thank you

As I understand the CARES Act rules re coronavirus-related distributions (CRDs), a distribution that otherwise qualifies for treatment as a CRD can “attain” that status either by (1) the employer designating it as such or (2) the participant treating it as such on his tax return. So, my questions are:

1. How does the employer designate a distribution as a CRD?

2. Can the employer designate a distribution as a CRD without amending the plan, for example where the employer intends that only distributions on employment termination will be designated as CRDs?

3. If an employer does not designate an otherwise qualified distribution as a CRD, does the employer have to withhold 20% even if the participant treats it as such on his tax return?

Thanks.

Hi. An employee just notified us that he forgot to include a dependent child on his dental coverage when electing the plan during open enrollment in November 2019 (the child was selected to be covered under the medical and vision plans). We are wondering if there would be any administrative type reason to allow the child to be covered, retroactive to 1/1/2020 or if doing so would violate Section 125/ERISA rules? There has been no qualified life event or status change to permit a mid-year enrollment. This is purely an issue where the employee just realized their mistake 7 months into the plan year.

Thanks!

Is the DOL accepting electronic type signatures on the form 5500, such as an Adobe signature?  Or are hand signatures the only signature method?

Thanks.

I hope someone can verify that I understand this correctly.  401(k) plan has 100%-4% enhanced safe harbor match.  They added a discretionary match of 100%-15% for NHCE only in 2019.  Since the discretionary match exceeds 4%, ACP testing applies.  If I test all of the matching contributions together the ACP test fails - a lot of NHCE still didn't participate even with the extra generous match.  However, I believe 1.401(m)-2(a)(5)(iv) allows us to exclude employees who are only receiving the 100%-4% enhanced safe harbor match from the ACP testing.  Since that group to be excluded includes all of the HCE, the ACP testing automatically passes.

Is that correct?  In other words, as long as the HCE are excluded from the discretionary match, ACP is going to be automatically satisfied regardless of the discretionary match formula being used for the NHCE.

If a plan is terminating and the termination is not related to the COVID virus will those who take a cash lump sum be subject to the 10% early dist excise tax?  I would think they are subject to the tax because the payout was not instigated as a COVID distribution.

AND... should we offer a COVID distribution option anyway?

Hello everyone,

I hope you and your loved ones are well. For a sole proprietor who sponsors a defined benefit plan, how does one determine how much of the contribution gets deducted on Schedule C for the employees and how much gets deducted on Form 1040 for the sole proprietor?

Treasury Regulation 1.402A-1, Q&A-5(a) states that distributions attributable to designated Roth contributions that include amounts that would not be taxable if they were distributed to the participant must be made via direct rollover if rolled to a designated Roth account of qualified Plan. Essentially, this Treasury Regulation requires that designated Roth rollovers between qualified plans be facilitated via direct trustee-to-trustee rollover, not via the indirect 60-day rollover process. IRS Notice 2020-51, Q&A-8 states that RMD distributions from a plan may be rolled back into the same plan, provided the plan permits rollovers and the rollover satisfies the requirements of IRC 402(c).

If a participant receives an RMD from a qualified plan in January, 2020, and such RMD includes designated Roth contributions that would not be taxable, can this individual make an indirect rollover back into the qualified plan from which it was distributed, notwithstanding Treasury Regulation 1.402A-1, Q&A-5 which generally requires Roth accounts to be rolled over via direct rollover?

 IRS Notice 2020-51 did not address this Roth rollover issue - - in fact, the word Roth never appears in Notice 2020-51.

Any reason why the SMM can't function as the Notice, as long as it is given at least 30 days in advance, and the procedures for changing a deferral election are included?

The SECURE Act requires full distribution of a 401(k) account balance within 10 years for a designed beneficiary (i.e. a beneficiary that is not an eligible designated beneficiary). However, it doesn’t appear that SECURE Act amends Section 1.401(a)(9)-5 regarding RMDs from DC plans. Under A-1(e) of 1.401(a)(9)-5, with respect to annuity contracts, specifically refers to 1.401(a)(9)-6 relating to 401(a)(9) being satisfied through an annuity contract purchased through an insurance company.

The question is regarding a joint and survivor annuity, such as a 20 year period certain, under which the beneficiary is not an eligible designed beneficiary as defined under SECURE. If the participant dies with 14 years remaining in the period certain, can payments continue for the full 14 years remaining or must the full death benefit be paid to the beneficiary within 10 years as required under the SECURE Act? It appears the full 14 years would still apply since the SECURE Act does not appear to have amended the provisions relating to an annuity purchased within a DC plan.

Good morning to all,

Is it your understanding that the 10% early withdrawal on distributions made from a 401(k) plan has been waived for all withdrawals across the board for anyone making a withdrawal in 2020, or is it your understanding that this break on the 10% penalty is only available for CARES Act related distributions (CRDs), which in turn is only available if the employer has chosen to adopt the CARES Act distribution provisions for the plan?

Your advice is always greatly appreciated.