hello!

I have a plan that amended the vesting schedule effective 1/1/2018 from an immediate vesting to a 2/20 vesting schedule.

I have an employee that was hired 9/2017.  She was eligible 1/1/2019 (1 year 1000 hour eligibility with 1/1 & 7/1 entry)

Does she fall under the old vesting schedule because of her hire date or does she fall under the new because of her participation date?

I appreciate your help.  Thank you!

I'm going to preface this by saying I know almost nothing about Puerto Rico rules. 

So if someone has a primer resource that they think has the answer - please let me know. 

Question  existing U.S. mainland plan, owner only. I am unsure of entity type, I suspect it is an LLC. I do not know which state. I will try to find out the details. 

The owner / business is moving to Puerto Rico and wants to keep their existing plan. Are there changes? Is this something that is going to be so complicated I should refer them to a different company? What things should they (I?) be aware of? I've tried some basic googling, but all of you are very quick and smart so I figured I would ask here. 

H & W were divorced on July 16, 2019. W was awarded 1/2 of Hs cash balance pension and 401(k) plans. I was retained by the attorneys to draft the DROs. I did so and submitted them to the plan administrator for preapproval on October 9, 2019. Minor changes were requested, made and resubmitted. Preapproval letters were issued on November 25 and December 9. The court approved the QDROs and they were submitted to the PA for processing. The PA now wants another minor change in both QDROs. Normally, wouldn't be a problem, except for resubmitting them to the court, which PA requires. 

I just learned that the AP died on November 25, so her signature is not available for the revised QDROs. My thought is to made the requested change but keep the QDROs otherwise as drafted. The only form modification would be to have the personal representative of the AP's estate sign in the place of the AP. Does this sound like a reasonable solution?

An organization wants to give retirees a monthly allowance to help them pay for medicare premiums. This is a not-for-profit organization that wants to provide a specific dollar amount to former employees that meet the 'retiree' criteria. They currently make a monthly deposit into each retiree's bank account. Is this the proper way to do so? Thank you. 

Does the son-in-law of the owner get attributed the ownership percentage of father in law?   I have daughter as HCE based on Dad's ownership.

Good afternoon,

We have an employee who is looking to voluntarily default on his $50k loan that he initiated in 2018.  He's paid back about $15k but now says the payments are too much and he'd like to stop payments and have the remaining amount defaulted and treated as a deemed distribution.  The employee is still contributing to the 401(k) and receiving match.  He also has about $12k he can take as a distribution.  The participant is 67 years old.  We've talked to our general counsel and they've informed us that we should allow the voluntary default because the employee resides in California.  The IRS doesn't seem to keen on allowing employees the opportunity to circumvent the law.   Has anyone heard of this?

Hello All - I have a question regarding 401K rollovers from a previous employer to a current employer:  I have $50K of funds in my previous employer's 401K program that I want to rollover to my current employer's plan.  $40K of the funds are Taxable and $10K are Non-Taxable.  I have the option of rolling over the total ($50K) to my current employer but also have the option of rolling over the $40K Taxable to my current employer and getting the $10K NonTaxable distributed directly to me.  If I were to pursue this option of rolling over the $40K Taxable to my current employer and getting the $10K NonTaxable distributed to me, would I be on the hook for any early withdrawal penalties/additional taxes on the $10K once I cash the check?  I understand it would be beneficial to roll the NonTaxable over, too, since I confirmed my current employer's plan would accept it AND I wouldn't pay taxes on it later but I could also use the cash right now.

Appreciate any input from the forum members.  Thank you.

So I'm a pretty junior tpa (I've been doing this for about 3 years) and while I've learned *a lot* I recognize that there are things (probably many of them) that I still don't know. This is one of those things.

So I was asked to do a profit sharing calculation on a plan that is just starting up, it's a calendar plan year with the first year being 2019. This plan has fairly average eligibility rules all around (18, 1 yos (1,000hrs), dual entry) but the business was not started until 7/6/2018 so not surprisingly most everyone won't be eligible until 1/1/2020.

Now the way the census is looking the two owners have a DoH of 7/6/18 and most everyone else has a DoH of 7/20/18.

Here's where my question arises. I was asked to write in a waiver of eligibility for the Profit Sharing source for employees employed on 7/6/18, which obviously will only be the owners. Meaning they'll be able to receive a profit sharing in 2019 and everyone else will have to wait until 2020 when they're eligible This should pass testing as well (it's a fixed class based pro-rata) as long as the owners stay under 25% of the payroll. Now I suspect this is likely perfectly fine, but it sorta "feels" discriminatory in favor of the owners in terms of the waiver of eligibility... so just wondering if this is something that should maybe be questioned or not? Either way I appreciate everyone's feedback and for taking the time to read this.

Over the past ten years I've been helping my disabled mom through a very ugly divorce. While it should be long over, her ex has now popped up and said that he would like her to give up her survivor benefit (he works for the USPS) and in it's place he would get a $25k life insurance policy on himself with her as the beneficary.

I'm assuming this is not in her best interest in any way, and is full of loopholes, but I am trying to figure out as much as I can. I've looked it up and per the QDRO she's entitled to the "maximum survivor annuity benefit based on your Federal service".  

Though also states "the AP is awarded a former spouse survivor annuity under the Federal Employees Retirement System in the same amount as the AP has been receiving or would receive as her share of the P's retirement benefits under paragraph 6a" (she's entitled to 9.6% so he has noted that this pro-rata share would be 55% of $384 (9.6% of his monthly retirement benefit). 

Either way, I'm guessing it's better than a random life insurance policy?

Any advice or feedback? Thank you SO very much. 

With the 10 year payout requirement for non-designated beneficiaries, what are your thoughts on using a charitable remainder trust to facilitate a lifetime (or 20 year) income stream?

Obviously, it does not have all the advantages of the stretch, but it does provide for tax deferred growth and income stream beyond the 10 years.

Thoughts? 

An individual owns is 100% owner of a company sponsoring a non-elective safe harbor 401(k) plan.  After several years the same individual starts a new company in in which he owns 85%.  The new company will not be adopting the existing 401(k) plan and will not adopt it's own plan.

The plan document defines compensation as all compensation paid by the "Employer" and references the controlled group/affiliated service group code sections.

Am I correct that for allocation purposes, if a participant earns compensation in both companies, all of the compensation would need to be included unless the plan was amended to specifically exclude it?  Further, if the compensation from the new company was to be excluded under the plan, the compensation would need to be tested for it to be used for testing purposes and the safe harbor contribution?

Thanks very much.

I have a non-Safe Harbor 401(k) Plan that will be terminating by 04/01/2020. According to the ERISApedia webcast, an Amendment is required for terminating plans ("presumably" - their word). 

I have not seen any Amendment language for this. Anyone else?

I just found out a week ago, while having my taxes prepared, that our company offered the SIMPLE IRA plan.  I noticed the "X" on box 13 and to be honest, never looked/noticed before.  Please excuse my fail to notice previous years.

I started in 2012 and checked all my past W2's and all had the check from 2013 on.  I asked the owner about this and he setup a meeting with me a few days later.  After initial investigation on his part he came to the conclusion that I wasn't aware/notified of the plan and he was concerned and assured me that this was 100% unintentional.  He stated the program was established/implemented in 2008 and he's aware that some employees have been contributing and others haven't.  I should mention he's VERY hands off in these situations and relies on other parties to take care of HR types of tasks, given we are so small and we don't have an HR dept.

I confirmed with other co-workers and most all were totally unaware as well.  One EE in particular has been employed since 2005.  Since we've always had 2 facilities (corporate/warehouse), up until 2017, it's feasible to understand a potential communication issue (albeit unlikely) due to 2 sites but still not excusable.  The employer recognizes the severity of this and is working with others to understand the impact and come forward with a plan to amend/repair.  I want to stay positive and optimistic and take him at his word about the total lack of proper communication and give him the benefit of the doubt with this revelation.

My concern is how something like this (involving possibly up to 10+ employees [past/present]), spread out over that 11-year time frame and how this will possibly be rectified?  If I can assume this was an honest mistake, as the owner stated, can this be fixed by the tools/guidelines in place for this sort of thing?  My hope is that it can because I would obviously want this to be a viable program and would like the years I missed out on, to be properly/fairly compensated and have a good program going forward while I'm here.

Basic details:
Plan established 2008.
Magically appeared on my 2013 W2 and ever since then (box 13).
     I will say that the EE that has been with the company since 2005, verified that the checkbox was not checked until 2013 as well so that's a little concerning.
Notification/forms were not presented for a majority of the off-site facility EEs and can't speak for the corporate side EEs.
Employer said he signed up for the 3% matching option (I'm aware of how those work since I've been studying the ins and outs of the SIMPLE IRA program feverishly since I found all this out).
Employer did state that our broker did tell everyone but I know this is obviously not true and I haven't seen him since I started in 2012 and he's never spoke to me about anything, that I can be sure of.

Trust me, based on all I've been reading concerning similar situations, I realize the word "egregious" comes to mind but wanted to find out from the professionals in this forum if this plan is recoverable or a lost cause?

I think that explains my predicament and really looking forward to some good advice from this forum.

Thanks for the help!

DR245

Currently active DB plan with about 25 active participants.  Employer will be hiring about 100 new employees later in 2020 and then more in the near future.  Employer would like for those employees not to participate in DB plan.  He will start a 403b plan in near future.  There is one HCE in DB plan.  If DB plan is frozen to new entrants effective say, 4/1/2020 and new 403b plan is established, will 401(a)(26) still apply to DB plan.  And if so, if DB plan is also amended to freeze and exclude HCEs, will 401(a)(26) still apply, or will plan satisfy 401(a)(26)?  Thanks. 

My question is the following:

Corporation A maintains a 401(k) Plan in the US.

Corporation A is a US company with foreign subsidiaries.

Corporation A has a number of employees that come and work in the US from their Canada and Paris offices. 

Can employees that have worked in the foreign offices have their time counted towards eligibility and vesting when they come over to the US?

Client makes profit sharing deposits during the year and also has a Cash Balance Plan.  In 2019, the profit sharing contribution deposited into the plan was greater than was deductible for combined plan purposes  (e.g. profit sharing exceeded 6% due to it being a service company).

Since the owner’s portion is not deductible and is below the 415 limit, can the money stay in his account and be treated as after tax basis for taxation purposes.

Is t his distribution subject to any withholding.  I assume no since it can't be rolled?  Correct me if I am off base here.

SIMPLE IRA plan has excess Employer match contributed for 2 participants for 2019 plan year.  The excess match totals $120, but excess is less than $100 for each participant.

Rev Proc 2019-19 says if the excess amount is $100 or less, the Plan Sponsor is not required to distribute the excess..

The question is whether that $100 limit applies by participant or does it apply to the plan as a whole?

Thanks!

Trying to run eligibility in Relius and getting the following error under Plan Specification Errors:  Sub PerformBulkWriteNet () :Database write error.    Relius no longer has their chat, so I put in an Incident but who knows how long it will take them to respond.  Anyone ever have an error like this?  The plan specs are fine.