A participant was on military leave from October 2018 until March 2019.  She received a safe harbor contribution for 2018 based upon actual 2018 pay through October, but now needs to receive the 3% safe harbor on the compensation that she would have earned during her period of military service.  Likewise, she will need a 3% safe harbor on missed pay for 2019, but this will not be calculated until the end of the year when we calculate the contribution for all employees.

USERRA indicates that the make-up 2018 contribution should have been deposited within 90 days after her return to employment or by the time that the other safe harbor contributions were deposited.  This make-up contribution is now LATE.  Is there a know correction to this error?  I did not see anything in EPCRS, but maybe was searching for the wrong terms.  Do I need to calculate earnings from the 90 mark after re-employment until now? 

Thanks!

Looking at ECPRS 6.07:  

Quote

"However, these correction methods are not available if the maximum period for repayment of the loan pursuant to § 72(p)(2)(B) has expired."

Question 1

72p2B on its own references exclusively the 5 year term.  But regs for 72p2C is what provides the grace period. I have a loan for which the 5 year term expired in June 2019. Are we entitled to use a grace period as well, giving us until 9/30/2019?  Admittedly I’m having trouble getting there…

Question 2

And then as a follow up, if that is not available, 6.07(2) seems to suggest that even if the loan was deemed in 2017, we can “cancel” the 2017 1099-R that was issued by the recordkeeper, have the employer fund any applicable withholding, and issue a new taxable 1099-R for 2019. Am I reading that correctly?  Everything at issue here was clearly not the fault of the participant (there is general agreement that the recordkeeper let us down).
 

Does anyone know of a reason that we cannot mail several 5558 forms in one envelope? we mail them certified.    WE have about 10 clients who need an extension of their 5500-SF and 5500. 

Client has a safe harbor plan and allowed a hardship distribution to a participant last week.  Current AA does not allow for hardship withdrawals.  Can I retroactively amend a safe harbor plan to add hardships?  I thought that a 30 day notice requirement still existed for making mid-year changes to SH plans.  Does Rev Proc 2019-19 allow for this type of Self-correction?  I could not find any language regarding safe harbor plans.

Thanks for your input.

Anyone knows of a designer and/or TPA that designs and/or administers defined benefit plans including the 401(h) health expenses benefits part, for financial advisors' clients?

A plan has 70 participants. The plan sponsor is part of a controlled group with well over 1,000 participants. The assets are in a 103-12 IE.

The plan has been filing a 5500 for at least the last 10 years. Can it start filing a 5500-SF?

Met with advisor in 2009 and agreed upon “moderately aggressive” portfolio.   Realized in 2015 all monies going to a money market. Unhappy, Met with advisor to plan new course of action.  2019 Just realized majority of money still sitting in money market. 

Missed out on last 10 years   What recourse  do I have for his inaction and incompetence?

Any bright ideas on this one? A very small governmental employer (app. 7 or 8 employees) thinks they want to set up an HRA for one person. Well, this won't fly, as the one person is a "Highly Compensated Individual" under the testing rules (is in the top 25% by compensation). I don't know why they want to do this anyway, (apparently something to do with Medicare, but that's unclear) -  since they can't do that, they wanted to make everyone eligible and pay their group health premiums with HRA funds. That can't be done either. And a QSEHRA isn't available if the employer provides group insurance.

I think they can't have their cake and eat it to, but wondering if there is something obvious that I'm missing?

I have a 401k plan that wants to remove the automatic enrollment features.  Does anyone have a sample notice they can share for announcing this to employees?

I have a plan for a collection of medical practices (we'll call it ABC Medicine).  There are 7 doctors, they all have equal ownership in the partnership (LLC).

The plan document says they are NOT an ASG, and that they are an MEP.  There are participation agreements completed for each doctor's practice.  The doctors' practices do not have any employees.  The employees are all employed under ABC Medicine.

Since the beginning, we have tested this plan as if it is an ASG and only recently did the plan document issue come up.

Can you help me understand the difference between an ASG and an MEP?  I believe this is an ASG, but I need to be able to explain this to the client.  And what kind of VCP corrections will be required if it is an ASG?

Thanks in advance!

Self correction by amendment. We meet all of ther equirements, the only "issue" is it so happens that predominantly HCE's.

The issue is Taxable Fringe Benefits were taken into account when they should not have been. We want to amend retroactively to 2018 as the corection to include TFB.

Is that a problem?  There is nothing in the new "correction by amendment" that is problematic. It references me to section 6.02 for correction principles, but it seems I can check off all those boxes too (i.e., it is consistent with general principles).

Thanks in advance!

Plan sponsor (with high employee turnover) eliminated 401(k) plan's fixed matching contribution effective 1.15.2018 and, after payment of expenses, has over $6,000 in forfeiture account. Document provides that match forfeitures be used to reduce match for the plan year in which they occur and to pay expenses.  Sponsor will continue to pay expenses from the account, but it may take a few years.   

Does anyone think there would be an issue?  It's not like the account accumulated over a period of several years and we're following the terms of the plan.  Not sure what else we can do.  

Very unusual situation - we have a plan that was terminating PYE 06/30/19.  They moved money to checking account and paid everyone out.  Then without consulting us, instead of closing the account they kept it open and put in an additional $250 to cover bank fees.  They now have about $167 remaining.

Whereas we had planned to file a final 5500 for PYE 06/30/19 showing the plan terminated, they actually have no participants and a small bank balance remaining.  Technically, it seems we would have to have them clear out the account and file a final 5500 for PYE 06/30/20.

Any suggestions as to how you would handle this?

Good morning... in the case of a multiemployer health plan maintained by one of the building and construction trades, an issue has arisen as to whether employees of some of the employers who do not perform work traditionally in the trade, e.g. clerical, could be permitted to join the plan.  The concept would be not to include them as non-bargaining unit employees, but to actually have them join the union and participate as bargaining unit employees.  Any knowledge as to whether this is permissible or not?

One of our DB plans is considering termination by buying annuity contracts from an insurance co. This plan has about 40 participants, half of whom are nonresident aliens. The plan does not allow for lump sums (other than for small benefits).  The plan's assets is about $18 mil.

We have contacted several insurance companies and none would provide a quote, either because the plan is too small or because it covers nonresident aliens.

Can anybody recommend an insurance company that would be willing to sell annuities for this type of plan? any help would be appreciated.

29 C.F.R. § 2520.104-46 provides its excuse from an audit of a plan’s financial statements only if, among other conditions, at least 95% of the plan’s assets are qualifying plan assets—much of which involves regulated banking, insurance, and securities businesses.

Imagine a small-business retirement plan with 100% of its assets in non-qualifying assets.  An officer of the plan’s sponsor serves as the plan’s trustee.

If a TPA goes about its work normally, how likely or unlikely is it that a TPA would see information from which the TPA would know that the assets don’t qualify for a § 2520.104-46 waiver?

Can I allow union employees to make elective deferrals but exclude them from the safe harbor match or do I have to set up a separate plan for them?

Company A sponsors a Safe Harbor ( 3%) auto enrollment plan.  They recently purchased another company via a stock purchase. Purchased company is also a Safe Harbor (3%) auto enrollment plan. They intend to merger (not terminate) the acquired company's plan  into Company A's plan.

Trying to figure out if merger can occur mid year, or if  it has to wait until 1/1/2020.

Thanks you.

Hi to All,

If you saw the John Hancock webinar today on the EPCRS program and how to use it, you will understand where my questions originate.  There was a lot of coverage of enrollment errors and the corrections seemed quite complex.  Actually I should have said that the corrections themselves are not that hard, once you can identify what kind of error it is, what kind of money is involved, how long ago the error occurred, whether or not automatic enrollment is a factor, etc.  That's the harder part - figuring out which kind of error you have.  My question is, how would I even know an error had occurred, and ultimately, who is responsible for figuring it out and correcting it?

Our non-producing TPA shop does traditional, annual reporting for retirement plans of small employers.  We are not usually involved in periodic enrollment meetings after the plan is established. Unless the employer volunteers the information or the participant complains to us, we would never know if someone was enrolled late.  If the employer distributes an enrollment kit in May to someone who was eligible on January 1, and that person starts deferring on June 1, all I will ever see is the total deferred for the year and the total compensation for the year from the return of the annual census data.  I don't ask and I am not given any data about when participants begin deferring.  I suppose I could go look at each new person in the plan, if a platform like a John Hancock is involved, and see when deferrals commenced but even then, I wouldn't know if the person initially declined and then changed his mind later on.

What are the rest of you doing?  Are you closely involved with the enrollments of your client's employees?  Do you collect copies of the enrollment forms or the forms declining the opportunity?  Is this your responsibility as a TPA?  Do you rely on the investment advisor to be on top of this?  Outside of informing the client and the HR department (if any) of their responsibilities when the plan is first installed,  do you follow up to see if procedures are actually being followed?

My colleague here says he has done these corrections a number of times over the years, but it was because a savvy participant complained about not being enrolled properly, not because he as the TPA discovered the error or because the employer let him know there was a problem.  I could probably count on one hand the number of times I made these calculations and it was so long ago I don't even remember the circumstances.

We would like very much to know how other firms are handling this issue.  Thank you.

The DOL penalty for failure to distribute auto enroll notices is $1700 per participant per day, if I am reading things correctly. This failure is not eligible for relief under the Voluntary Fiduciary Correction Program, so was hoping to find an overall penalty cap, at least. Is anyone aware of a cap on this penalty? Since VFCP is not available, simply provide the notices ASAP, include the error as an operational error in a VCP, and hope for the best?