Group:

I did not see a specific area to post this so I've posted here.

And I may not be asking the question properly so please bear with me.

12/31 fincls/tax return reflects $400k in bank account of entity owned by ESOP.

These are funds that were just paid into account and going to be used as loans for business purpose.

I recall a discussion some time ago on a similar issue but not sure if there was a complete answer

other than "it depends".

For valuation purposes, can the appraiser make the statement and assessment that those

funds are earmarked and not part of the overall valuation?   Which will reduce the overall value.

Also, I apologize that this is off topic, but I've recently had a contractor I worked with leave

the profession and am looking for a project-based individual with experience in ERISA/ESOP

related valuations and research. I am trying the Benefits Link job posting for the first time

and thought I'd add my request here. 

Thoughts and comments appreciated.

Can anyone recommend an attorney in southern California area?  Need to correct a document flaw

Final Rule released this morning, and is scheduled to be published on 5/27/20

Happy reading!2020-10951.pdf

In recent weeks, we’ve seen many BenefitsLink discussions about ambiguities and uncertainties in what the Paycheck Protection Program pays for.

In other contexts, a businessperson might get a written opinion to show that what one did, if later found to be incorrect, relied on a reasonable interpretation.  Applied for this context, one might seek a law firm’s or accounting firm’s written opinion that a borrower’s use of PPP assistance is a reasonable interpretation of the borrower’s documents and the guidance the government had published.

Is anyone doing this? 

Came across situation where business owners have been excluding multiple employees from 401k program. Most employees (5 current employees and unknown number former)were not informed of plan.(Some for over 10 yrs) they are all eligible. I’m not even sure how to start unwrapping this barrel of worms. Most asked about 401k on hire but we’re told wasn’t available. Doesn’t mention in employee benefit package So owners feel they don’t hav to offer access

I have a client who has about 60 employees, with a small portion being classified more or less as a leased employee that they send to other corporations (roughly 10% as of today fall in this class).  I don't foresee any issues with 403(b) or any other testing, given the size of the group, but currently they are offering a 401(k) Plan with a 4% Safe Harbor Match.  What they want to do is not be required to do the match for these leased employees, but want to be able to allow them to contribute.  

My first thought is to have two separate plans setup:

1) The current plan, just amending the document to excluded these leased employees, and continue with the 401(k) + Safe Harbor Match
2) A new plan (#002), which only covers the leased employees and have a 401(k) with a discretionary contribution

I can't think of any issues that may be caused by this, but I wanted to bounce it off everyone to make sure my thinking was correct and I wasn't overlooking anything.  I don't believe I can just excluded the leased employees from the Safe Harbor Match, but allow them to participate in the 401(k).

Thanks everyone and I hope everyone is well and staying safe.

We are early in the research process but a 403(b) plan that was created in 1989 apparently has never had a plan document.  I would like to eventually get them through VCP.  Would this be acceptable since we have nothing to go on?

Thanks

Referred to a 403(b) plan that was created in 1989 and has never filed a 5500.  Well under 100 participants.  I am not sure how far back any records go and what can be obtained.  

How far back can/should we go to correct via DFVCP? Also, is the DFVCP amount capped at $750 for non-profits no matter how many late filings?

Since this is a 403(b), I know that through the 2009 plan year, the information required on the 5500 was pretty limited.  I do not believe financial data was required.  Would this make 2010 plan year an acceptable starting point?

Thank you

Because there is a higher incidence of COVID-19 positive test results for residents of a long-term care facility (i.e., a nursing home), State X mandates that all residents and staff at the facility be tested for COVID-19 by a specified date. Those individuals who test negative are required to be retested within one week to rule out a false negative on the first test. There will only be a second retest if and to the extent that the Centers for Disease Control and Prevention mandate it. My question is, in light of the no cost-sharing of COVID-19 testing imposed by the Families First Coronavirus Response Act, as applied to a self-funded plan, does this mean that the plan (or employer) is saddled with the cost of conducting the testing? Can the plan deny coverage for the retest as not medically necessary?

Just found out that client is part of a controlled group since 2018 (even though we ask this question every year).  The transition period for coverage expired 12-31-19.

Plan #1 is a very small 401(k) plan with a generous match.  Because of the controlled group status, one participant who was NHCE is now HCE due to top paid group, and we had to redo the 2019 ADP/ACP testing which now fails.  QNECs will be contributed for 2019. 

Plan #2 is an 80-person 401(k) plan that converted to safe harbor match as of 1-1-20.  2019 ADP results remain the same and refunds were already made.

Plan #1 will not pass 410(b) for 2020, although plan #2 would pass, on a controlled group basis.

Is the only solution to combine both plans for ADP/ACP current year testing for 2020?  Plan #2 won't be happy with the prospect of a failed test and refunds for another year.

Thanks.

We have a client (CA corporation) who's employees are only his wife and himself.  They are in real estate investment.

Wife owns 100% of a second company who's employees do work for the husband's company.

They were told by their accountant that in this way the employees wouldn't have to be covered by the plan.

Is this a controlled group or not?

I believe CA is community property state and therefore each would be attributed direct ownership of the other's company.  And would this also be considered an affiliated service group?

Second related question:  We have another set of clients where the husband is 100% owner of a construction company and the wife is 100% owner of a property management company.  The two companies are totally separate and unrelated to each other.  Do we have a controlled group>

Got an interesting question just now.  Can we have a policy that says if you are ever an HCE then you will always be part of the 403b and you will never go back to the 401k.  The purpose would be to avoid people flipping back and forth between the two plans.

I can't think of anything that would prevent it.  I guess the only issue would be coverage.  So if I have NHCE's not covered by the 401k plan, I need to pass a coverage test.  But if we're talking about a larger organization where the NHCEs dramatically outnumber the HCE's (as happens to be the case on the inquiring client) that should be a non-issue.

Anyone have (or know where I can get) a copy of the basic plan document for the CitiStreet Associates LLC Prototype Non-Standardized 401(k) and Profit Sharing Plan #01? The form adoption agreement (all I have) is dated 2002.

TYIA!

401k plan changed payroll providers at the beginning of 2019.  For the first three payrolls of 2019, they accidentally keyed the employee deferral amounts into the company match line (not sure why that was even set up, since there isn't a match in the plan!).  The plan sponsor "fixed" this by taking the deferrals from the first two paychecks out of the third paycheck... but never took the next step of fixing the "match" from the third paycheck.  So the net effect is that there is a February 2019 payroll where the normal deferrals were paid by the employer.  Since this was never fixed, the W-2s have the wrong amount, in the sense that they don't match the deposits, and also if you multiply the deferral election times the compensation, it's not right... but the W-2 does match what was deducted from compensation, so is it really wrong?

Most of the amounts in question are <$50 per person, though there are a couple that are about $100.

What kind of correction should be made?  It seems like something needs to be done.  In the plan, the participant is not short any money; in fact, it's the employer who is short about $2K overall.  There is a profit sharing contribution to be done, but it's a set percentage (one of those few plans remaining) - I could recommend that the excess for each participant offset their profit sharing, but I'm not sure that's OK since it was an employer error.  It would feel that the employee would be losing out on the amount they should have in their account.

I am an experience benefits attorney but I have not had much ESOP experience, and I need to develop this skill. I would welcome any opinions about the resources and webinars available through NCEO or any other organizations. Thanks!

Former client (and someone I'm still friends with)  asked me to look over the mess of the new administrators (rhymes with Daysex).  Plan is a 3% Safe Harbor Non-discretionary.  For whatever reason the 3% has only been allocated to those employees that are deferring.  Last time I checked in on the friend, that battle was still being waged.  It wasn't resolved by the end of 2019 to any extent.  The client is a sole-proprietor with 10-15 long time employees.  So, maybe 12 are still due their SHNDC and the tax return of the Sole-P has yet to be processed. 

So, how does Daysex generate a 5500 for signature when so much is still incomplete?  Does anyone prepare a 5500 before the sole-p's income is known or final contributions receivable are calculated?  It's certain to be in the $60k-$75K range.  I guess, if I'm Daysex, I can say I only report what's on the books on December 31.  Never, ever have I seen this.

Good evening.

Do any of you fellow practitioners have suggestions on where to find the best 457 training for new staff?  I've looked on ASPPA and NIPA and am not finding training designated towards just non-qualified 457 plans.  I would appreciate any suggestions. Thank you.

Business 1 - 401k plan is currently in place - 1 Owner. 

Business 2 - Business Opens another location 6 month later - that owner is the Parent to Owner 1 above.

Can Business 2 just adopt Business 1 plan as an Adopting Employer, since they will create a Controlled Group?   Would there be Plan Amendment needed only for that?

So client asked me to calculate their SHNEC and PS for 2019 earlier this year.  In March they confirmed that they wanted to do both but in April they changed their mind and said they only wanted to fund the required SHNEC.  Apparently they have filed their corporate tax return for 2019.

Today they came back to me and are asking if they amend their corporate tax return for 2019, can they fund the 2019 PS that we had calculated for them and they later decided not to do?

I am having internet problems, so I can't search the EOB.  I will be looking thru the paper copy of the 2018 version while I wait for the IT people to come, but thought I would post the question here too.

TIA