Hi,

AN Employee terminated with an  ACRUED Benefit of $844. His DC account balance is 44,000. He is 45 years old. The 844 is due at age 62 (NRA). Since the AB of 844

is due at age 62, is it proper to discount the 844 (AB) TO HIS CURRENT AGE OF 45 (will use plan equivalence for this). This gives an accrued benefit of 263 at his current age of 45. Next, to convert the dc account to annuity based on the APR at his current age of 45, ie 235 monthly. And then finally to use the dc annuity  of 235 to reduce the AB of 265? Thank you very much

How would one go about calculating an RMD on a participant's voluntary account, since basis in the account has already been taxed?

We set up a traditional DB plan--not cash balance-- for a restaurant with 50 employees. We excluded bartenders and service people while covering the chefs, kitchen and dish washers and the vice-presiident of the business.  Though the plan  satisfies 70% coverage RPT and initially met the  40% participation rule, this year the minimum participant count is too low--39.2%. I am unclear how to fix this at minimum cost to client. Can I just cover 1-2 members of one of the excluded groups. Has anyone had this sort of problem and how was it fixed. Appreciate any thoughts on the subject. 

Plan currently provides SH 401(k) match contribution (100% up to 6%) on a payroll basis.  Can the plan be amended mid-year to reduce the match to 100% up to 4% prospectively for the rest of the year?

Under the proposed SECURE Act, RMDs will be limited to a 10-year pay-out for noneligible beneficiaries.  A life expectancy pay-out will still be available for eligible beneficiaries (spouse, minor children, disabled individuals, chronically ill individuals and those not more than 10 years older than the IRA Owner).  I am having trouble determining whether the current RMD rule that provides that if a non-individual beneficiary is named (estate, charity or non-look through trust), and if the IRA Owner dies before his/her required beginning date, then post-death RMD payments must be distributed within 5 years.  Under the SECURE Act, would this 5 year pay-out rule be increased to 10 years if a non-individual is the beneficiary?  Thanks.   

Can a hardship distribution be take from safe harbor source?  

If a participant in a Defined Benefit Pension Plan chooses to take a 5 year (60 month) term certain annuity, can those payments be directly rollover over to an IRA?  What if the participant is  over 70 1/2?

The office manager in a plan I administer (profit sharing/3% safe harbor) wants to be become an independent contractor paid via a 1099 instead of a W2 employee.  Nothing in her job would change, just the way she is paid.  I know this would make her no longer an employee, and she would no longer be able to participate in the plan, but not sure how to advise her on the myriad of other things it could affect. She is also the HR person, so I can't refer her to the HR dept. 

We use ftwilliam.com to produce our 5500's and Summary Annual Reports. In the General Information section of the SAR checklist, question 5 asks "Have all participants earned the right to receive benefits?" If you answer yes, it removes the "although not all of these persons had yet earned the right to receive benefits" language.

We're not sure how to answer this from a defined contribution plan perspective. Is this tied to whether or not everyone is fully vested, whether or not everyone is entitled to take a distribution from the plan, whether or not all of the participants listed in the count earlier in the sentence have a balance, or some combination thereof? If it's tied to whether or not everyone is entitled to actually take a distribution, it seems like there would be very limited circumstances when you would not include the language.

It's interesting that ftwilliam.com gives the option to include or exclude this language when the model notice in the DOL reg (§2520.104b-10) hard codes the language (i.e., doesn't provide for alternative language or qualify when you would or wouldn't use it like it does for other parts of the notice).

I'm inclined to just follow the model notice and include the language in all cases, but I'm curious as to what criteria others are using to determine how to answer this question?

Suppose plan A merges into plan Z. Plan A files a Final 5500 and shows the transfer amounts to plan Z. Also suppose Plan A uses a pre-approved document. Can Plan A file a Form 5310 to get a determination for its final year?

I had a client send me the following message:   I am just wondering what the general rule is/consensus on how they have to get the information to participants. 

"Has there been any changes to 401K regulations that would allow us to upload our 401K documents (attached) to our eSELFSERVE site for access instead of providing hard copies?

• Summary Plan Descriptions
• QDIA Notice
• Enrollment Form

eSELFSERVE is accessible on mobile phones.

We use for all our benefits (medical, etc).

In the past we were told that unless the associate had a work email, we should print (27 pages +).  Please advise"

Any help or cites would be great!  Thanks!

Suppose you have a safe harbor 401(k) plan (safe harbor match). In addition, the same employer has a cross-tested profit sharing plan. Both plans cover the same employees although the 401(k) plan has an earlier entry date.

My understanding is that the Safe Harbor 401(k) plan can stand on its own and the profit sharing plan can stand on its own as long as it (the profit sharing plan) passes 410b and 401(a)4 on its own. In other words, aggregation is not required for the average benefits percentage test in this case.

Or, is it required that both plans be aggregated for the average benefits percentage test?

Thank you. 

I have a pre approved plan, ABC Profit Sharing Plan , Employer ABC Corp. PYE 12/31/18

Effective 1/1/19  Articles of Incorporation with a Statement of Conversion changed the name to XYZ, Inc.

The EIN is the same.

I don't know what  should to do about the plan. What changes do I make? Does ABC end and xys adopt the plan?

This is a California company. PLEASE HELP

Brain cramp! Participant terminates with outstanding loan - rolls loan note over to new employer's plan. Reported on 1099 as code G, or not reported at all?

A potential client is leaving an MEP (Multiple Employer Plan) and wants to start a new stand-alone plan mid-year with the intent on moving the assets over to the new plan. The plan is NOT safe harbor. 

Since this will be a successor plan, does the new plan require a short initial plan year or is there a way to avoid the short plan year?  

Has anyone had any experience with the iRS regarding recoveries of withholding overpayments made by a pension plan or is aware of any guidance? For example, assume that a pension plan continues to pay benefits to a deceased retiree's bank account and the joint holder of the account retains the funds or the funds are returned to the plan by the bank.  An IRS letter dated May 15, 2003 from the Office of Chief Counsel entitled "IRS Letter on Recovery of Erroneous Withholding" states that the plan can file Forms 843 and 941c (apparently Form 941c was replaced by Form 941-X).  The guidance contained in this May 15, 2003 letter appears out of date. And it would appear that IRS Form 945x is more appropriate.

IRS Letter May 15, 2003 re withholding recovery.pdf

Client's attorney is proactively (no problems or lawsuits anticipated, just want to have an objective look) hiring actuarial firm to do actuarial equivalence study respecting client's frozen defined benefit pension plan. Client has hired a particular actuarial firm for consulting on lump sum window, and other matters through the years. The actuarial firm does not consider itself to be a fiduciary respecting the plan, but in terms of best practices, does anyone have thoughts on whether or not another actuarial firm that has never worked before with the client's plan should be selected to do the study or if it doesn't matter?

This is a new one to me. Has anyone ever dealt with this? A participant died and left a 60-month preretirement death benefit payable. No beneficiary designation, no spouse, no children. The plan contacted his mother, who would be the default beneficiary under the plan terms. She said she wants nothing to do with it. Apparently the participant has a sister as well, but the mother said the sister wouldn't want it either (she would be next default beneficiary after the mother). 

What would you do if the default beneficiary refuses to apply for the benefit? I'm also assuming that we wouldn't be able to get her to fill out and submit a formal disclaimer of interest. 

Plan Admin/Trustee did not want to offer Roth.  Roth was added during the 2016 restatement in error (?) and was not found out until now.

So an employee selected roth on the enrollment form but the administrator went back to them and said we do not offer roth and then the employee placed the same percentage in pre-tax but never crossed out the roth.  So everything moved forward and the employee did not miss $1 of the safe harbor match.

The plan has as internal audit and this employee was selected.

What is my legal correction?

Everything I am reading relates to missed deferrals, missed entry, missed eligibility..... and how to fix..... making up the difference....

Basically I want to do a retro amendment... just not sure... any ideas....