I've read through many overviews of the SECURE Act.  One item that isn't clear to me is whether an active non-owner employee can delay their RMDS beyond age 72, as they could under the old 70 1/2 rules. 

Thanks!

Two questions,   I have a final form 5500-SF to file for 2019.   The issue is there was an additional $5.29 in residual earnings that posted to the account after all the participants were paid out and the money was returned to the company in January 2020.    Can I accrue for this on the 2019 5500-SF and mark it final, or will I need to prepare a 2020 5500-SF and that will be the final one.   

Next question,  

Large plan terminated as of 9/30/2018.    Large plan audit was done for 2018, participants were paid out in 2019.     Does the plan require another audit for 2019, no contributions, just distributions,  if not, do I file a Schedule H again for 2019 but with out the audit attached?    I've never come across this issue before. 

Thanks for your help

Plan was signed 6/1, with effective date 1/1, but 401(k) effective 7/1. Since plan started mid-year, actual 401(k) and safe harbor match are based on compensation from 7/1.

Plan defines compensation for all purposes to be full year compensation.

This leads to two initial questions:

1. If 401(k) wasn't even available for the earlier period, is it possible to use full year compensation?
2. this would apply equally along the way to new participants who enter mid-year

Nice thing for those receiving contributions is they would be receiving greater contributions with full year compensation.

Thank you

Very new here and need clarification: for a plan to fully qualify under 125 must an employer offer an alternative to taking the employer sponsored health plan(s)? Example: Employer requires all F/T employees (no exceptions for F/T employees) to participate in sponsored health care plan(s) (employer/employee share plan cost). I'm confused on whether there has to be an alternate choice for the employee (there are different plan choices - Kaiser/Blue Shield/Etc.) such as pay into health plan OR cash-in-lieu/some other taxable benefit? Thank you for any help! 

My privately held company was acquired by an ESOP company almost two years ago.  I have been told I must go through the 6 years of vesting however I have now noticed that two other acquisitions that were also private companies their employees are fully vested at the time of acquisition.  ESOPS being federally regulated it appears my company's employees (only two) should be fully vested as well?  I cannot find any topics like this.  Thanks

A 403(b) plan with universal availability for elective deferrals. The plan uses the excludable classification of employees who work less than 20 hrs/wk.

Does the excludable class of employees get counted in a 410(b) coverage test for elective deferrals?

A group health plan provides for all of the categories of benefits under essential health benefits. An employee covered under such plan was hospitalized for two days in connection with surgery. He had made a $1,000 copay payment at the time he was admitted to the hospital. The participant also obtained pre-authorization for the hospitalization, as required by the plan. After he was discharged, he found that he was subject to a bill of just under $50,000 for his hospitalization. The plan provides for a $1,800 per day limit on reimbursement of hospital expenses. His plan paid $3,600 ($1, 800 per day) for the two days of his admission and after applying his copayment. Since hospitalization is one of the essential health benefit categories, I am concerned that this is in violation of the ACA prohibition on annual limits. Hospitalization, per the SPD, includes the following: semi-private room and board, use of operating and recovery rooms and equipment; use of intensive care and equipment, laboratory or pathological exams, x-ray exams, drugs and medicines provided by the hospital; blood transfusions and use of transfusion equipment; use of cardiographic equipment and supplies, basal metabolic exams, anesthesia supplies and equipment, oxygen and its administrationi, use of physiotherapeutic equipment and supplies and any additional  medically necessary services and supplies customarily provided by the hospital. I am concerned that the $1,800 per day limit violates the prohibition on annual limits.  Does anyone agree?

Imagine an employment-based § 401(k) plan allows—without waiting for age 59½, severance from employment, hardship, or some other distribution-permitting event—a qualified birth or adoption distribution (up to $5,000) within what Internal Revenue Code § 72(t)(2), as added by SECURE § 113, permits.

The statute defines such a distribution as one “made during the 1-year period beginning on the date on which a child of the individual is born or on which the legal adoption by the individual of an eligible adoptee is finalized.”  The statute does not require (and assume the plan does not require) showing an expense attributable to the birth or adoption.  The only fact needed to support a participant’s claim is the fact of the birth of the participant’s child, or the participant’s adoption of an eligible adoptee.

Assume the plan’s administrator adopts a new claim form, which has check-off boxes for a birth or an adoption, and for an adoption includes the participant’s statement that the adoptee is younger than 18 (or is physically or mentally incapable of self-support) and is not the participant’s spouse’s child.  Assume the form includes a strong statement about how a false statement can result in fines, imprisonment, liability for the plan’s expenses, and other legal consequences.

If you’re advising the plan’s administrator:

Is it enough that a participant states the necessary facts on the plan’s claim form, and signs it?

Or do you require a claimant to submit a copy of the birth certificate?

(Even if that aberration would frustrate normal processing for a plan that has electronic claims for all kinds of distributions?)

Do you require a claimant to attach a copy of the court order or other document that grants the adoption?

If a participant’s claim attaches instead a notarized affidavit stating a common-law adoption, would you advise the plan’s administrator to approve or deny the claim?

Hi all.  We had a client with a db plan recently ask if they can stop offering new retirees the option to receive pension payments via paper check.  Client was also curious as to whether they can convert participants currently in pay status who receive checks to direct deposit.  I haven't looked into this yet, but I feel like there's no way either option is permissible.  

If anyone has considered this issue before, I'd love to hear from you!  Thanks. 

I'm not familiar with these - (other than hearing them advertised on the radio) - blurb from IRS included in link. Are these expenses allowable as "premiums" under a cafeteria plan? If not, can the expenses be considered an allowable expense under a Health FSA?

https://apps.irs.gov/app/IPAR/resources/help/acamnstry.html

A church plan employer is looking to exclude bonus from compensation for salary deferrals.  Are church plans subject to 414(s) testing.  I've received mixed responses.  Thanks.

This question is a piggy back question to the one posted by ratherbereading back in December of 2019.  I have the same situation, and understand that the ADP and ACP testing is applicable to the plan for 2019 since the Safe Harbor Match was suspended mid-year.  The Safe Harbor Match was funded to the point of suspension.  Are the Safe Harbor Match contributions that were funded to the point of suspension considered SH contributions, and thus can be used in the ADP test since they are fully vested?  Or are they to be considered "regular" match (non-Safe Harbor) for 2019 ACP testing purposes (as if the Safe Harbor feature was not in place at all for the entire year)?

Thank you.

I’m a 35 year old physician with his own practice. I’m about to hire a physician into my practice and pay them a salary of $400k. This physician would be my only employee. 

I want to start a DB and know I can exclude highly compensated employees. However, would that exclude me too since I make over $125k? Even though I own the corp 100%, I w-2 myself.

I want to start a DB but not include my employee for the duration of the DB. Thanks 

I have a solo 401(k) account that was set up in 2003 when my business was a sole-proprietorship.  A few years later I switched our company plan to a Simple IRA since at that time we hired employees and were no longer eligible for the solo 401(k). 

 I neglected to formally close the plan and in 2017 the balance grew to over $250,000 and I am now delinquent on 2 years of filing form 5500ez.  Penalties of $250 per day up to a $150,000 maximum penalty. 

My plan is to file for penalty relief for 2017 and 2018(reduces penalty to $500 per delinquency, roll the account balance into my TIRA and possibly close the plan.
The balance grew solely from investments; no contributions since switching plans.

Alternative plan:

I have read that as long as no contributions have been made, the plan can remain open in a "frozen" state.  
I was considering keeping the plan open If I can still take out a 401(k) loan from the account while the plan is in this frozen state.  I'm just not sure if this is allowed or even advised.

Any knowledge and recommendations would be appreciated. 
Thanks!!

I have an interesting situation.  The adoption agreement in question only has a last day requirement waiver for normal or early retirement.  I have a Participant that has met Normal Retirement Age but is not employed on the last day of the Plan Year due to death.  Would this person get an employer contribution?  I definitely admit this is a gray area and could be argued either way.  My thinking is leaning towards no since there is a separate waiver for death as an option in the adoption agreement.

This is on a Relius Document.

Our client maintains a safe-harbor matching 401k plan.  A long-time employee (HCE) transitioned to a part-time role and is now working less than 1,000 hours per year. (The eligibility requirement listed in the plan document.)

Is this employee still eligible to make 401k deferrals and receive the safe-harbor match or excluded because he no longer meets the eligibility requirements?  The document does not address this situation - only that the eligibility requirements are Age 21 and 1000 hours of service.

Thank you for your feedback!

Hello,

I have an HCE who mid year started to make employee contributions.  The documents states HCE's can not participate.  I know I need to refund them their contributions, my question is we are refunding  the 2019 contribution in 2020, do we treat this like a 402g refund and the 2019 contribution would be taxable in 2019 and earning in 2020, or is everything taxable in year of distribution, 2020

Would a QACA match of 100% of the first 6% be classified as safe harbor to avoid ADP/ACP testing on an automatic enrollment/increase plan.  I know safe harbor formulas can't match on anything over 6%, but I generally only see QACA matches quoted as one of these 3 options:

• Match 100% of first 1% and 50% of next 5%
• Match 100% of first 3.5%
• 3% non-elective for everyone (not a match)

Some sources I've found say 3.5% is the max possible QACA match, which seems like a fairly low limit for some employers that want to do more.

Plan has a traditional automatic contribution arrangement (no EACA or QACA).  

Eligible participant states that he signed an election form for 0 deferrals, which plan sponsor did not implement.  Plan sponsor continued to deduct and remit deferrals.

Is there a fix for this?  Can the deferrals be distributed to the participant if there has not been a distributable event?  I’m not seeing this in EPCRS.

Would appreciate opinions/comments on this.  Going through §112 of the SECURE Act referencing elective deferrals for long-term part-time employees.  Section 112 (a)(1) references §401(k)(2)(D) which is the Code Section that allows for a cash or deferred arrangement.  Section 112 does not reference §402A relating to Roth contributions.  Therefore a long-term part-time employee can make elective deferrals but not Roth contributions.  Is this an oversight?  Or am I missing something?  Thank you.