We have a number of plans that use "End of Plan Year" for F.3. Time of Payment (other than Death) - but want to waive that waiting period in cases of hardship.  We propose to use 3.d. to write in the language from b.(End of Plan Year) followed by "Acceleration of timing allowed for cases of Hardship (per safe harbor rules)."

My question is - in order to use Hardship as a criteria for allowing acceleration of distributions for terminated participants - must the plan allow Hardships as an in-service distribution option?  It was my interpretation that this section of the Basic Plan Document (Timing & Form of Payment -  Section 7.02, Article 7) is separate from Article 8 (In-Service Distributions and Loans).
(FTWilliam declined to answer)

Appreciate hearing others' experience. Thank you

-DB Plan is frozen

-Short Plan Year from 10/1/18 through 12/31/18

-Plan has a shortfall of $100,000

Question - For the purposes of minimum funding, do you pro-rate the shortfall amortization charge for 12/31/118?

Please provide source/link/site.  Thank-you

do not have a lot of details but A and B are merging. B is the survivor. the transition rule states that acquisition or disposition could be a merger involving a change in employer of the employees.  See the Reg below:

(f)Certain acquisitions or dispositions. Section 410(b)(6)(C) (relating to certain acquisitions or dispositions) provides a special rule whereby aplan may be treated as satisfying section 410(b) for a limited period of time after an acquisition or disposition if it satisfies section 410(b) (without regard to the special rule) immediately before the acquisition or disposition and there is no significant change in the plan or in the coverage of theplan other than the acquisition or disposition. For purposes of section 410(b)(6)(C) and this paragraph (f), the terms “acquisition” and “disposition” refer to an asset or stock acquisition, merger, or other similar transaction involving a change in employer of the employees of a trade or business.

so what exactly does a transaction have to look like to be considered a merger.in this case two medical type groups merging with one becoming the survivor but i don't think any money or stock is changing hands.   if the term merger is a term of art what would you want to know to determine if a merger occurred?

An accountant posed this question, and I'm not as strong on health benefits as I am on retirement benefits.  A small company that currently doesn't offer any group health plan acquires the assets of another small company, along with 3 employees from that company.  Those 3 employees had group health coverage and the acquiring company is continuing that benefit for them.

Does the company have to offer group health coverage to it's other employees?  Can the company create different classes of employees and offer some classes but not others?  Can the company have different employee contributory rates towards premiums (to be done through a 125 plan)?

The company has fewer than 50 employees, and all the employees are NHCEs.  The owner would not be included in the health plan.

Thanks for your input. 

Generally, plan termination resolutions will state that plan participants become 100% vested on the plan termination date.  If a termination is later rescinded by the plan sponsor or falls through due to say PBGC disapproval, is the 100% vesting locked in? Has anyone seen or used  language in a plan termination resolution stating  that should the plan revert to an "ongoing" plan status such 100% vesting will be inapplicable and the vesting schedule under Section x.x will apply?

Does anyone know of a site similar to BenefitsLink that solely focuses on PBMs and Rx plans?

A 401k plan is on a calendar year and ceases contributions in March. However, the effective date of the termination is in July. Which date is used to determine the prorated 415 limit?

If the employer had already ceased contributions with the intention to terminate, but did not make the effective date until several months after, aren't they essentially increasing the contributions allowed by the prorated 415 limit? 

Any guidance is appreciated! 

Does anyone have a sample participant fee disclosure for an FBO account option?  Participants can xfer balances between the main recordkeeper and "external" FBO accounts (still part of the Plan).  

If you'd be willing to share I would appreciate it!

A plan with large amounts of prevailinge wage QNECs is failing ADP. Here is my question:

1.401(k)-2(6)(iv)(A) says the following: General rule. Qualified nonelective contributions cannot be taken into account for a plan year for an NHCE to the extent such contributions exceed the product of that NHCE's compensation and the greater of 5% or two times the plan's representative contribution rate. Any qualified nonelective contribution taken into account under an ACP test under § 1.401(m)-2(a)(6) (including the determination of the representative contribution rate for purposes of § 1.401(m)-2(a)(6)(v)(B)), is not permitted to be taken into account for purposes of this paragraph (a)(6) (including the determination of the representative contribution rate under paragraph (a)(6)(iv)(B) of this section).

1.401(k)-2(6)(iv)(D) says the following: Special rule for prevailing wage contributions. Notwithstanding paragraph (a)(6)(iv)(A) of this section, qualified nonelective contributions that are made in connection with an employer's obligation to pay prevailing wages under the Davis-Bacon Act (46 Stat. 1494), Public Law 71-798, Service Contract Act of 1965 (79 Stat. 1965), Public Law 89-286, or similar legislation can be taken into account for a plan year for an NHCE to the extent such contributions do not exceed 10 percent of that NHCE's compensation.

Does the term "Notwithstanding" in 1.401(k)-2(6)(iv)(D) mean that if the representative rate calculated in 1.401(k)-2(6)(iv)(A) was greater than the 10% discussed in 1.401(k)-2(6)(iv)(D) then we would still be able to use amounts in excess of 10% if the plan's representative rate calculated in 1.401(k)-2(6)(iv)(A) was greater than 10%?

Facts: Company A and Company B are members of a controlled group and they adopt one single 401K plan with profit sharing discretionary component.  Can each company pass a separate resolution to fund a different profit sharing percentage each year.  Company A 3% and Company B 0% or some other %?

A client excludes bonus from compensation for deferral only.  They include it for SH and PS.  They use full 415 comp for 410(b) and 401(a)(4) testing and are passing.  The 414(s) comp test is failing when excluding bonus from deferrals.  Am I correct that really isn't an issue as long as they pass the general test on full 415 comp?

Can you have Multiple Employer Plans in the Section 125 plan arena, similar to qualified plans? In other words, could an Association (of some sort) sponsor their own plan, and have unrelated (and by that, I mean not part of a controlled group or ASG) member businesses adopt the plan as Participating Employers, and have all testing, administration, 5500's if required, etc., done separately for each business,  but there is no "MEWA" where contributions, etc. are being pooled?

I'd have said not - and any "unrelated" business would just adopt a plan on their own. But perhaps this is a normal and common arrangement?

Participant's employment is terminated.  He does not apply to for his pension annuity benefits, that is, to enter payout status?

Has he "retired"? 

Does it matter if he has or has not reached early retirement age of 55 at the time of termination.  

I have an Hopkins v. AT&T situation (see link to case below) where at the time of divorce the husband had terminated his employment and had previously elected his wife to receive his survivor annuity benefits, but the court did not award her survivor annuity benefits.  Under Hopkins retirement prior to divorce would lock ex-wife into survivor annuity benefits.  

Wife's attorney says that his termination of employment was tantamount to retirement and locked in the wife as survivor beneficiary per Hopkins.  Husband's attorney say termination and retirement are two different things and he has not yet retired and since the court did not award survivor annuity benefits to the wife she doesn't get them. 

I cannot find a clear definition of what "retirement" means.  

Hopkins can be found at https://scholar.google.com/scholar_case?case=9954117838131396049&q=hopkins+v+at+%26+t+global+information+solutions+co&hl=en&lr=lang_en&as_sdt=20003&as_vis=1

Thanks.  

We took over a traditional DB plan and 401(k) plan with 5 participants. Both plans are sponsored by the same employer and have whole life insurance. It appears each plan meets the incidental benefit rule. DB benefits are under 100 x expected monthly benefits and 401(k) plan premiums are less than 50% of aggregate contributions. In addition, it appears that all participants in both plans have comparable coverage.

Is there a problem with participants having this much life insurance across two plans?

Thanks.

I have a SIMPLE 401(k) Plan, one active participant.  My contact reported to me that there were no deferral or matching contributions during 2017 or 2018.    My contact left the company two weeks ago.   The new contact has been reviewing files and it appears that the former contact did not fund the 401 (k) Plan.     I'm not sure where the money went, but it didn't make it to the plan.    Can this be corrected by self correcting?  or should they file through the VCP Program?   I'm not sure the best way to fix this would be.   I've never come across something like this.     

As I understand, if I want to make a VCP Filing for late deferral deposits, Form 8950 is used when filing with the IRS and a User Fee applies.  Is it true that filing this same VCP Filing with the DOL has no User Fee and Form 8950 does not apply, if filed with the DOL?

Is anyone aware of any authority that would support  a view that a defined benefit multiemployer pension plan could exclude retirees from a mass distribution of an updated SPD?   Even though the language in 29 CFR section 2520.104b-2 is somewhat inconsistent, it appears that retirees in pay status are not excluded from a mass distribution of an updated SPD.

Is a Simple 401(k) considered a successor plan to a 401(k) plan. 

We have a client who wants to terminate their 401(k) plan as of 12/3/19 and start a simple 401(k) plan as of 1/1/20.  Is this allowable under the successor rules?

Certain unfunded deferred compensation plans maintained by non-governmental tax-exempt organizations (in existence on and not modified after August 16, 1986) are grandfathered and are not subject to Section 457(b) limits. Does anyone know how deferrals under these grandfathered plans are reported on Form W-2? is it still Code G of Box 12 or another Box and/or Code?  Including grandfathered amounts in Box 12, Code G may cause an apparent exceeding of the 457 deferral limits.

Organization has no employees, only 1099 contractors. The contractors can purchase vision, dental and disability insurance through the organization. Is the organization required to file a 5500?