I'm a Relius document user and am seeking advice (since they don't seem to respond as quickly as they used to). They posted a notice on the site with regard to the safe harbor notices saying to select 166b on the checklist and then:

"Clients can run a provisional report within RD ASP using the logic string in paragraph 166b as their selections. This report will assist in determining what action, if any, is needed regarding 166b for 2020 annual notices".

Can anyone out there tell me how to run a provisional report in RD ASP???

If not, does anyone out there have suggestions on the safe harbor notice revisions due to the hardship distribution changes that have not been incorporated in the SPD (or even an SMM) at this point? Some folks hemmed and hawed at ASSPA Annual, but I didn't get anything concrete in the sessions I attended.

Thanks.

James

401(k) plan allows for entry / change to employee deferral contributions on Jan 1st and July 1st each year.  An employee was eligible to start deferring on 07/01/19 and was given notice of their eligibility to defer.  The employee did not inform the Plan Sponsor that they wanted to defer until the end of September 2019.  The Plan Sponsor starting withholding with the next payroll.  Would this be ok based on the SH brief exclusion rule or should the employee deferral contributions be refunded and the employee informed that they may start deferring on 01/01/20?

50% owner sells ownership in C-Corp, will be paid $500,000 per year for next 5 years as payment. Continues to work for C-Corp and draws a salary. Can this person open up an S-Corp to receive the $500,000 per year and have the S-Corp start a qualified plan just covering himself?

Good Afternoon  All -

Participant took a loan 2 years ago ( 5 year note) and has been making payments as required via payroll deduction.

Participant has told the employer she can not afford the payments and to stop the withholding - she will default on the loan.

1. The loan program requires payments be made via payroll deduction until the loan is paid in full

Can a participant  just stop their deferrals?  Seems to me,  if the employer allows this employee to stop, they have opened the "black hole" for others to do the same. Some how the IRS would have to view these as  sham loans - done as a way to get funds not otherwise available.

Doesn't stopping the loan payment cause the loan to violate 72(p)?

I have read some states mandate if the employee tells the employer to stop a withholding, the employer must stop. Even though this is contrary to ERISA.

Thank You for  Friday afternoon help!!

Plan terminated and final short-year 2017 5500-EZ was filed (single/owner PS plan).  All known assets were rolled over to an IRA in 2017.  It was discovered recently in 2019 that 2 plan investments- stocks worth a fairly substantial amount - still exist.  It was apparently discovered due to dividends being paid this year.  These 2 investments were held outside the main brokerage account but per the client, were/are titled in the plan's name.  Client wants to rollover these 2  investments now to an IRA.  Due to the passage of time between plan termination and now, I'm thinking it would be a failed /excess IRA rollover.  How do we fix this?  Any ideas?

Under a multiemployer health and welfare plan, an employer and a local union enter into a collective bargaining agreement which includes a provision that permits the employer to request detailed claims information (which has been santized of HIPAA protected health information) from the fund. The fund is not a signatory to the collective bargaining agreement but later an individual who is both a local union officer and a union trustee for the fund signs in both capacities assenting to the preceding terms, including the portion of the CBA allowing the employer to request detailed claims information. Does the signature  on a letter by an individual who is both a local union officer and a union trustee for the fund in both capacities bind the fund to comply with the employer's request for detailed claims information?

I recently had another Investment professional mention to me they are using Index funds because of DOL guidance that any deviation from Index funds should be documented in terms of reasons why you are not using Index funds. Has anyone seen any guidance like this?  I cannot find any guidance except for ESG guidance.  Is there any specific investment guidance from the DOL regarding which funds should be used?

TIA

We have a client with DB and PS and the only participants are him (100% owner) and his mother.  There are no other employees and so no other participants in the foreseeable future.  What is IRS position on bonding for such a plan?

Why is this not the definition for a deferred vested benefit in a 401k plan?

If you terminate employment and you have a vested retirement benefit that you are not eligible to receive until later, that information will be reported by your plan to the Internal Revenue Service, which, in turn, will inform the Social Security Administration (SSA). This information must also be provided to you by the plan. The Social Security Administration will tell you, upon request, whether you were reported as having a deferred vested benefit under any plan.

Why report a person on a form if they choose to keep their funds in a participant-directed 401k account, receive quarterly statements, has access to real-time balances on the website, and do not have to wait until retirement date in order to take a distribution?

Are the IRS and DOL entertaining waivers of late filing fees?  I was under the impression that after the advent of the late filer program, they didn't want to be bothered with "my dog ate it" stories.  I just heard someone say that they do it regularly.

Also do(n't) late filing penalties go back to the original due date if you miss the extension?

A client just shared that the management letter from their audit "strongly suggested" that the plan sponsor (!) contact participants who were still invested in the Target Date 2010 and 2015 funds to remind them that they were in funds whose dates had passed.

Am I crazy, or is this wrong on so many levels?
I realize that you might not know me well enough to realize this isn't actually an "or" question... LOL

My client is a multiemployer pension plan that has terminated in a mass withdrawal.  It is projected to become insolvent and run out of funds in the next plan year. Its only sources of funds are two employers who made complete withdrawals and are making installment payments of withdrawal liability. As you likely know, in that situation, the plan has to be amended to eliminate benefits in excess of the greater of the amount of the plan's assets or the extent of the PBGC's guarantee. See ERISA Section 4281(c). In addition, to the extent that benefit payments under the insolvent plan exceed the resource benefit level (i.e., the difference between the plan's level of benefits and the plan's assets, but no less than the PBGC guarantee), any benefits above the PBGC guarantee shall be suspended. To me, there may be little or no difference between the level at which benefits have to be eliminated versus the level at which benefits have to be suspended. Has anyone seen a sample amendment to reduce/suspend benefit levels of the type described here? If so, could you please supply me with a copy?

Is Vested Amount of 401k net of outstanding loans?  Do I subtract the current loans from the vested amount, or are those loans already accounted for the the vested amount?  

Thank you.

I have a participant whose loan was repaid on one payroll, however the loan payment deduction was not stopped for two more payrolls. Can I just refund the incorrect deductions to him?

I don't know why this is bothering me, but it is. ERISA 403(b) plan.

If a plan has a NRD of age 60, and wants to amend it to age 65...

Currently all accounts are all 100% vested at all times. In-service withdrawals are NOT currently allowed other than for hardship or disability. Allocation conditions for employer match/nonelective are NOT waived for termination of employment after attaining NRD.

I don't much see the point in amending NRD to age 65, as it doesn't accomplish anything under the current terms of the plan. But if they did amend, is there any problem? I don't see a cutback of any benefit, but it just feels odd - anything obvious I'm missing?

Plan year end is November 30th.  Plan will be terminating soon after December 1, 2019.  Last favorable LOD dated 4/28/2018 with respect to amendment and restatement signed February 10, 2017 that had an effective date of 12/1/2016.  The LOD states that it considered the 2015 Cumulative List of Changes in Plan Qualification Requirements.

In conjunction with a plan termination soon after December 1, 2019 I  presume that there is an amendment needed that considers a more recent Cumulative List.  If so, what is the year of the latest Cumulative List that must be included?  

Could the Cumulative List amendment requirement be sidestepped by adopting a volume submitter plan by the end of this cycle's end date of 4/30/2020?

Thanking everybody in advance who weighs in.  THANK YOU.

A client terminates her DB plan (non-PBGC) and proceeds to transfer all of the assets to her IRA.  After informing her that she must return the funds over and above her accrued benefit, she refuses.  Participants have not been paid out and the amount transferred exceeds her §415 limit.

If the situation persists, what are our obligations and duties with respect to the client and how should we proceed.

As I see it, we could

1. withdraw and not perform further services to the plan.
2. correctly fill out final Form 5500, knowing it will prompt an audit.
3. report the failure to the DOL as a criminal fiduciary
4. 1 and 3.
5. 2 and 3.

Do professional designations affect the result?  Thoughts?

A couple married on September 7, 2007 and divorced on July 16, 2019. The plan is a cash balance plan with Koch Industries (Georgia Pacific). The Judgment of Divorce awards the Alternate payee 50% of the Participant’s vested account balance under the plan earned during the marraige. I drafted the QDRO according. The plan administrator denied preapproval of the QDRO, stating that a single valuation date is required. To be fair, the QDRO quidelines state as much. However, since this a common J of D provision, I have used the above language successly with other plan administrators. 

I have researched alternative formulas like: Value on date of divorce x months a participant while married/total months a participant x 50% = award to Alternate Payee. Does anyone have a better idea, especially if you have worked with Koch Industries?

We administer a 401k invested with Voya.  Two trustees, husband and wife; the husband died a few years ago and his account has remained open.  Voya has thus far refused to rollover his account into hers since she has requested.

The plan is the beneficiary and she is the contingent; both are over 59 ½.

Voya is telling me she can not rollover his account into hers for RMD purposes.  Neither are close to 70 ½.

Since he is dead, he can't take an RMD anyway, so what is their rationale?

Is the approved interest rate when calculating an EBAR in a Cash Balance Plan still between 7.5% and 8.5%?  I was discussing this with someone and know that used to be the acceptable range, but I wasn't sure if that had been changed or indexed.

Thanks!