We are setting up Auto Enrollment (4%) plan with Auto Escalation (1% annually up to 10%).  When we looked at plan demographics we noticed that close to 40% of participants have elected flat dollar deferral elections instead of percentages. How would administrator auto escalate someone with flat dollar deferral election? Here are a few options we have considered.  

1. Divide pay period deferrals by the pay period comp and increase the flat dollar amount by calculated 1% if needed.  This approach would potentially hurt folks with variable comp through the year, who want to ensure max deferral (402g limit) and not losing any match (match is calculated with per pay period comp).
2. Exclude anyone who has elected flat dollar deferrals from Auto Escalation.  Wondering if that would be considered definitely determinable in accordance with Regulation §1.401-1(b)(1)(ii) and uniform for EACA rules.  Currently Top choice if prior sentence holds.  
3. Only apply Auto Escalation for participants who have not made any affirmative elections.  However, that would only limit this entire plan provision to the future new hires, who never make elections.

I would like to hear your thoughts and comments.  Are there any other approaches you have seen that you would like to share?

Thanks! 

I am working with an ESOP to get their problems cleaned up.  We need to file an amended Form 5500 for the a 10/1/2014 to 9/30/2015 plan year.   We can't access the 2014 form on FT Williams.  

I don't do really old forms like this very often but something in the back of my mind says after so many years EFAST2 requires you to submit very old 5500 on the current year's form.  So I am thinking this is right.  Seems very unlikely FT Williams would get this wrong also 

But can someone confirm this for me? 

Thanks

Hi, A Terminated employee was in the DB Plan with zero benefits. This is because the DC plan balance offset his DB Benefit (offset plan). During the 1/1/2018 -12/31/2018 plan year, this terminated employee received his DC Balance (this offset his DB benefit and therefore he did not receive a benefit from the DB Plan). Therefore, he was not included in the 2018 DB Val Report.  The valuation date for the DB Plan is 1/1/2018 (BOY Valuation date) there any way to justify removing this employee from the 2018 DB Valuation (as he received his benefit during 2018, however, it was during the 2018 year, after the 1/1/2018 val date)? Either way the Report numbers are all the same , since he did not accrue benefits under the DB Plan, the only issue is the participant count.----Thank you.

I'm sure this is obvious but want to ask anyway:

Client has discovered deferral contributions that were made late in 2018 and 2018 5500-SF has already been filed. 

Can I assume that they should now file an amended 2018 return indicating the late contributions?

Hi, guys.

I'm pretty sure I know the answer to this question, but just want to be absolutely certain. Is the max contribution to an IRA limit for the calendar year or the tax year? Since you're allowed to contribute in the following year, 2020, up to the tax deadline, that's another calendar year, but it's the same tax year, if it is to apply to the 2019 tax year. In short, can you contribute the max amount by the end of 2019 and then more or even the max again till April 15, 2020, to be applied to the 2019 tax year? I'd imagine not, but I appreciate your confirmation.

Let me tell you the reason I'm asking, in case it makes any difference and such a payment is treated in a different way, which is doubtful, but you never know. I was just laid off and I'll be getting a severance payment. I don't know yet exactly when I'll get it, but it'll be very unfortunate if it happens to be before the end of 2019.

Ugly IRA excess contribution situation over 18 years and potential $400K excise taxes.

Is there a person or department at IRS we could approach to make an anonymous VCP-type application proposing corrective action?

Thanks

We have two MEPs that are merging/terminating. I use both words because that is my question. The MEP sponsor is merging the plans into a larger MEP at another record keeper. There are a few adopting employers who are going to merge into another MEP and one or two who are going to spin off to their own plans. The prior TPA that we inherited this MEP mess from set up each adopting employer with their own plan document and not a regular MEP document with each AE signing a Joinder Agreement.  It has been my understanding that an adopting employer has limited choices when leaving a MEP: spin of and continue the plan, spin off and terminate the plan, or merge into another plan. There are the option because you cannot terminate the MEP. The MEP has a few "orphans"  (i.e. inactive employer) are not transferring to the new MEP. Can the MEP be terminated just like a regular plan termination or do the "orphans" have to be spun off and terminated?  

Hello:

I have a 401(k) Plan sponsored by a Sole Proprietorship that terminated on 12/31/2018.  As part of the process to get all of the participants paid out, it was determined that none of the owner's 2017 401k deferrals were deposited to the Trust.  The owner deducted $24,000 on their individual tax return, and it was reported as a contribution on the 5500 form (and included in all of the necessary testing).  The accountant is asking whether it is still deductible on the 2017 tax return if the deposit is made today (2019).  I'm thinking, from the plan's standpoint, this will be treated as a late contribution and applicable earnings will be deposited along with the $24,000 and the tax return stands as is.  His other option is to amend his 2017 tax return to remove the $24,000 deferral.  Any thoughts?  Let me know if you need more details to provide your feedback.    

I have a plan that uses prior year testing.  Eligibility is 2 month with monthly entry.

For 2018 I tested without statutory exclusions.  I passed the testing for 2018.

I am running a projected test for 2019.  The plans fail the adp/acp test.  In Relius I can select the statutory exclusion " test separately"  box.

Are there any rules for switching between statutory exclusion from one year to another? 

Appreciate your help!

My record keeps is telling me Relius doesn't do coupon loans.  Does the program have the ability to generate a book?

I'm trying to talk a client (a big client) out of having coupon loans.  They don't want to take on the responsibility of taking money out of people's paychecks.

I'm trying to go the "you need to be reasonably sure these loans will actually get paid off, and coupon loans makes this job very difficult" route.

Any other thoughts?

My divorce was finalized in 2004; it included a QDRO.  I recently retired (2018) and after several of the payments I received a letter from the Plan Administrator advising me that the calculations were incorrect ($60,000) and they will be deducting a couple hundred dollars out of my monthly payments.  Now I am stuck!  How can this error happen and I suffer the consequences 14 years later.

Can a non-spousal beneficiary withdraw more than the required amount?   Plan does not allow for partial distributions after termination.  The RMD is about $500 and she wants to take $5,000.     IF she can, would the whole distribution be taxed at 10% or just the RMD amount?    

I have long term disability through my company as well as Social Security Disability. My daughter qualified through me as a Family Supplmental Benefit until she turned 18. We managed to get it extended until she graduated from high school. My company plan subtracted my Social Security and hers from their benefit that was payable to me as an offset. No where in the policy does it address what to do when the family benefit goes away. I notified the disability company when the family benefit ended. Several months later, I noticed on my monthly EOB that they 'quietly' reduced my total benefit by the amount that was paid to my daughter yet they did not increase my payout. So it is a numbers game at this point. I have found on the internet the same situation and the lawyer advised that person that they were entitled to that part of their benefit to be reinstated again. I sent a certified letter to the company recently asking for either an explanation or the back benefit and for it to be reinstated. It has been ignored. My questions are: Am I entitled to that benefit and the back wages? What should I do now if I am? Hire a lawyer? This is a big name insurance company and I worked for a large company. Should I contact others that I feel sure have been done the same way to initiate a class action suit for them also?

We have a client that wants to have us work without their SS#'s.  I know Relius has an Employee ID feature where DERs can be done just with EE#'s. 

Has anyone ever taken this approach? How did it go?  I assume the whole point is to allow us to do the work without SS#'s.  I assume the SS# can be blank?

I realize there will be some inefficiences, but I think I can work around those.  Obviously it's not a 10 person plan so worth a little extra effort! 

Controlled group.  3 companies A B & C.

A does not pass coverage on its own, B & C do.  

I can test A & B together, b/c together they pass coverage excluding C.  C passes excluding A & B.

Can A & B have different SH formulas?  Ie, one a 3% and the other SH Match?

If not, could I have A with SHM plus a discretionary match (that satisfies ACP SH) and B with just the SHM?

If a profit sharing plan terminates do all participants become 100% vested (even terminated participants)?

I have a prototype document that reads service requirements for elective deferrals/profit sharing completion of 1 year of eligibility service.  Hours of service necessary for a year of eligibility service 1,000 (not to exceed 1,000).

Does this mean they have to work a year with at least 1,000 hours and then enter the plan on the next entrance date or they can enter on the next entrance date once they complete 1,000 hours even if it has not been a full year?

Does anyone know if Relius Documents can prepare spanish notices?  I guess I doubt it but curious to know if anyone knows the deal...

Hi!

If you have a Savings Account and there has been established a beneficiary, then I have the possibility to change the beneficiary while this is an active account at the bank.

But if the money has been escheated. How do I reclaim the money without the benificiary getting to know that I'm reclaiming the money? Can I change benificiary while the account is in an escheated state?