so it is clear that the 402f notice is not required. What about something stating 10% is default withholding (unless chosen otherwise) and the repayment period and the stretch taxes and all that jazz? seems like it should be required, but is it in notice form?

I have a client who took his RMD in January 2020 for 2020 from his IRA.

Due to CARES can he put it back in the IRA now?  It has been more than 60 days since he took the RMD.

Advice please.

So client amends the plan to add all of these wonderful new options.  What are the obligations to tell the participants about the options?  I happen to think we should be telling them about the options proactively.  Perhaps that is based on more on ethics than law though.  What is the law?  

If a plan sponsor maintains both a cash balance plan and a defined contribution plan and the plans are top heavy, it is my understanding that the top heavy minimum must still be funded, regardless of the DB plan’s frozen status. But my question is, would that contribution amount be 3% or 5% and would the amount depend on the contributions funded by the Key employees?
 

Available for DB plans?

I assume plans would need be amended to include a withdrawal provision and then add the $100K COVID-19 language?

I believe I have the answer, but can't seem to find the actual language so I apologize.  In the 401(k) + Cash Balance Situation, when calculating the EBAR to test both plans combined would you include the 3% Safe Harbor in the equation?

Again, I apologize if it is a simple question just can't seem to put my fingers on it.  Thanks again everyone!

I apologize if this has been asked before, but has it been established that if a spouse gets furloughed/loses hours a participant falls under the "adverse financial consequences" to determine eligibility for the in-service distribution/loan under the CARES Act?

Thanks everyone!

Just curious on how others will treat the new distributions for top heavy testing purposes.  The main concern is the ability for participants to contribute the funds back into a plan.  If the money isn't paid back, I assume it'd just be treated like other in-service distributions. 

If the money is recontributed though, would these funds be ignored?  Or would the balance associated with it be included in the top heavy balance (and then you'd probably have to back out the in-service so it's not double counted)?

Thanks for your thoughts!

Can anyone confirm if the disaster area declaration for the state of California is sufficient for the new hardship reason for disaster areas.  The hardship reason mentions that the employee's principal residence or principal place of employment was located in an area designated by FEMA for individual assistance with respect to the disaster.

When I look up the declaration on FEMA for California I do not see dollars designated for individual assistance, only of Public Assistance.

I see in the declaration though the dollars are available for "crisis counseling" for individuals.

Does anyone know if we can apply the hardship reason here in California, assuming of course the plan was or will be amended timely.

Thanks very much.

We are getting many calls to submit the 12 month suspension request to the recordkeepers for loan repayments by participants who were laid off from their jobs.  Would there be any advantage or disadvantage to waiting until closer to the end of the cure period to submit the 12 month suspension form to the recordkeeper?

Have a profit sharing only plan with a current plan year end of 6/30/20. They have talked about changing to a calendar year end. Is it too late to amend for a 12/31/19 plan year end? They extended their taxes so would still have time to make payment. Or did they have to amend before 12/31?

Are people recommending a board resolution to discontinue a discretionary pay-period match?

How about to start a discretionary pay-period match?

I have always done it, and there is a bit of a disagreement in the office of how important it is.

When a retirement plan has always used a safe-harbor regime (or has used one for many years), the plan’s sponsor might lack information to predict what coverage, non-discrimination, and top-heavy test would show absent the safe-harbor treatment.

Consider, while a good-enough sense of this information might be obvious to those with the data, it might be almost an unknown to the plan’s sponsor, and might be a complete unknown to the plan sponsor’s lawyer.

If a plan’s sponsor wants information to help the sponsor decide whether to discontinue a safe-harbor contribution, how quickly does a recordkeeper or third-party administrator turn around that testing?

(While I know it’s often not a realistic assumption, assume complete and clean data.  And assume the service provider’s fee is paid in advance.)

What 1099-R code should be used for a coronavirus related withdrawal for a participant under 59 1/2?  Can we use code 2 so they are not subject to penalty or use code 1 and let them sort it out when they do their tax return?

Shout out to Derrin Watson who on the ERISApedia webcast today provided an important clarification regarding hardship distributions under the FEMA provisions, as described below.  The definition is more specific then I had realized.

Abridged version of the reg:

(7) Expenses and losses (including loss of income) incurred by the employee on account of a disaster declared by the Federal Emergency Management Agency (FEMA) …provided that the employee's principal residence was located in an area designated by FEMA for individual assistance with respect to the disaster.

 How do we know if the state was in a FEMA disaster area that was designated for Individual Assistance?

1. Go to this website:

https://www.fema.gov/disasters

2. From the state drop-down, select the State .  Click on the “Apply" button.
3. Click on the link for Covid-19 Pandemic (if there is one!). Make sure you click on the most recent one!
4. Go to the Financial Assistance section.
5. If it says “Individual Assistance” then the employee is eligible for these hardship distributions.  If for example it only says “public assistance” then it does NOT qualify.

Hi, 

The ppp loans cover retirement plan contributions. While it is highly unlikely, does this by any chance include DB Plan contributions? Thank you.

I have read several commentaries saying that the increased loan maximum for "qualified individuals" is an optional change, but that the loan repayment provision is mandatory. Any thoughts? Thanks.

I have seen some discrepancy in summaries of the RMD rules for 2020 under the CARES Act. Section 2203 (a)(I)(ii) says that the RMD rules are suspended for 2020. Section 2203(a)(I)(ii) adds what I thought was a special rule/clarification that required beginning dates in 2020 are effectively suspended. 

But, I have seen summaries that imply that the RMD suspension ONLY applies for distributions for those participants with required beginning dates in 2020. 

So, which is it: are all RMDs suspended in 2020 or only those for required beginning dates in 2020?

Believe it or not, I am working on valuing a DB plan that is only now moving to using individual data.  Back in the 80s/90s, when this change was happening how was the change defined in the FSA? (it's before my time) Any feedback in this would be helpful.