If a quarterly participant statement reflects all fees and expenses deducted from a plan does that meet the annual 404a participant disclosure requirements? 

Does anyone know what is required to be submitted for the summary documentation for VFCP filings?  I know my client meets the requirements to file summary documentation, but not sure what constitutes summary documentation.  Does it have to be authorized by the plan's recordkeeper to reflect that the contributions were deposited and the amounts, or is a report of the contributions deposited to the recordkeeper sufficient?

Company A buys 80% of Company B, effective 10/1/2019; Company B's owner retains 20% ownership of B.

Both companies sponsor calendar year 401(k) plans, but B's employer contribution is not as generous as A.

After Company A buys 80% of B, they become a controlled group.

Can A and B continue to maintain separate 401(k) plans with different ER contributions?

Do they have to be tested together or can they be tested separately?

If they have to be tested together, when must that begin?

Thanks for any help!

So hey, anyone see this new addition of a Paperwork Reduction Act notice to the DOL's model Summary Annual Report?

Not sure how half a page of unrelated text reduces paperwork.  Also.....is there a deadline where this becomes mandatory?  It's enough of a slog to get an SAR to fit on one page after it's been generated by our software.

I feel like deleting it until something more obvious and official dictates it has to , has to, be in there.

What say the rest of ya?

Thanks!

--bri

I think the long week is getting to me because I keep questioning whether I'm looking at this correctly.  Any input greatly appreciated

• Plan has pooled/trustee directed investments
• Participant loans are allowed
• loans are NOT treated as a segregated investment

Im looking at the mechanics of the loan itself rather than fiduciary issues, but there is some disagreement in my office and this is one of those days where I would gladly take a coffee-IV.

The way Im looking at it, it is still a participant loan secured by the participant's balance. The loan interest is credited to the plan trust as a whole rather than back to the participant account.  

• Bud Weiser has a $100,000 account balance and borrows $50,000.
• for 2018, Mr Weiser has repaid $10,000, $1,000 of which was interest.
• Before Mr Weisers account is credited for 2018 earnings, his 12/31/2018 balance is still $100,000, $59,000 in pooled investments and $41,000 as a participant loan.
• The $1,000 Mr. Weiser paid as loan interest is added to the plan trust gain/loss to be allocated among pro rata for all participant ending balances
• Mr Weiser's share of the pro rata investment earnings is limited to the $59,000 that is part of the pooled investments

The opposing view is that the trust made the $50,000 to the participant as an investment, and it did not actually come from the participants account balance.  

• The 12/31/2018 balance for Mr. Weiser is $100,000 before it is adjusted for earnings
• The loan should be tracked separately from Mr. Weiser's account balance in the plan

Am I crazy, or is the opposing view describing an extension of credit (secured by plan participant assets?) as a plan investment rather than a participant loan?

Thanks

J

Participant is older than 70.5 and still working. The plan only allows withdrawals with an RMD, so if they take a withdrawal this year they will also take an RMD. If they take a withdrawal + RMD this year, and continue working next year but don't take any withdrawals next year, will an RMD be required next year? are the RMDs permanently triggered? thanks.

 I have gotten loans in the past and not had any problems but last week I tried to get a loan to try to pay off credit card debt and the 401(k) company says hardship only and clearly in my addendum it says there is no restrictions on my policy  no hardships can they do that? 

Can an employer sponsor a 401(k) and a SEP at the same time?

Only 3 employees plus owner (who gets no compensation except health insurance reported on K-1 as guaranteed payments).

One employee long-term, other two employees less than 3 years service.

Owner wants to reward long-term employee but doesn't want to create big taxable income for him, so considering doing a SEP contribution.  Long-term employee would meet 3-of-5 years eligibility but other two employees would not for the current year.

Thanks.

Anyone offer 3(16) services as a TPA?  What details can you provide with regard to experiences?  Thank you.

I have a QDRO that pays a specific dollar amount plus gain/loss through distribution date. Can the participant specify the fund he wants the alternate payee to be paid from or does it have to be pro-rated across all funds in his account?

An alternate payee is ready to take her QDRO distribution out of Nationwide.  Part of the money she received from her ex spouse is Roth money.  There is no prohibition on her rolling the entire Roth balance out, correct?  She's either rolling everything to an IRA or to another 401k plan.

I work on a mid-sized DB plan that generally doesn't pay lump sums, but has opened up a lump sum window until the end of the year. One terminated participant, who would like to take the lump sum, was born on 7/1/1960. Therefore, he will complete 59 1/2 years on 12/31/2019. If his distribution is not processed until 12/31/2019, can he avoid the early withdrawal penalty?

Thanks for any responses!

My employer is closing our 401k Safe Harbor account 8/31/2019.  As of yet they have given no written notice of this and also indicated they would not be required to make the 3% contribution for the year.   Is this correct ?

J

I am trying to find a table that would come close to a rate for a very very old governmental plan (that was using an insurance company annuity rate of about $130 F/$112 M age 65 - interest would be 6.5%

Any legal issues with an employer policy that pays employees full pay when they take intermittent FML, but no pay for employees taking continuous FML?

If a plan excludes those who work less than 20 hours/week as ineligible to make deferrals and the match requirement is a year of service (no hours), would those who work less than 20 hours/week be excluded from the 410(B) test for the matching even if they have more than a year of service?

HI ALL.  I AM  LOOKING FOR 412(i) PLAN TPA FOR 1 PERSON PLAN.  THE PLAN WOULD BE FOR ME.  

THANK YOU,

RAY J. Jr.

I have a question on how to calculate the 25% deduction limit.  The IRS says:

However, an employer’s deduction for contributions to a defined contribution plan (profit-sharing plan or money purchase pension plan) cannot be more than 25% of the compensation paid (or accrued) during the year to eligible employees participating in the plan (see Employer Deduction in Pub 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans).

My question is - who are considered eligible employees participating in the plan?  For profit sharing purposes, does this include employees who were participating during the plan year but terminated before the last day of the plan year, specifically if the plan document states that profit sharing won't be paid to employees not employed on the last day of the year?

Thanks!

Recent acquisition (last year or two).  Both plans are calendar year.

Scenario A

Both plans have the exact same match formula and eligibility.  Can I merge these plans together mid-year (Say May 1 2020)?  Eligibility would be expanded to additional people after the merger because the surving plan has a more liberal eligibility policy.

Scenario B

One plan with a dollar for dollar match on the first 4%, would merge into a plan with the basic safe harbor match.  I assume this would be a reduction in match?

I know Notice 2016-16 solicits comments on the need for additional guidance, but what are we to do in the interim?  I feel like Scenario A is doable but probably not B.

I saw Tom Poje had posted the idea of changing the plan year ends to create a short plan year, but I just don't think that is realistic in this case.

I have a participant who has terminated from his 401(k) and has maintained his account balances in the plan. He is over 70 1/2 and has started to take RMD's. He now wants to transfer all of his assets into an IRA and use a portion of those assets to make charitable donations. He was told by his accountant that he is not allowed to transfer his entire balance as the amount of his RMD for 2019 would need to be removed first. Everyone agree with this?