Plan year starts with 2 participants. During plan year, Participant #2, who is not a spouse and is already terminated, takes a full distribution. So plan year ends with 1 participant.

So, is this the year that the plan switches to 5500EZ? Or wait until the year it starts with 1 Participant?

(technically speaking, plan will file SF as one-person plan)

A client called because they were pressured by their platform to approve a distribution and agreed to it.  Unfortunately, their document is written so that there is a one-year wait on distributions (because there are usually errors in deposits that we have to reconcile after the end of the plan year).  But let's say that we are confident that this particular person has no deposit errors, so the distribution was 'correct' in the amount (vested amount, deposits, etc.), just about ten months too early.

I know that they have violated the terms of their document.  But what is the downside/correction?  It's not really an "overpayment", is it?  I'm not seeing anything remotely applicable in EPCRS 2018-52.  Thanks.

I've got a plan that transferred to us from another recordkeeper last year.  The prior recordkeeper just came to us stating that they had a stale check attributable to this plan and asking us to confirm wire instructions to move the funds to us.  This is the first time I've seen a recordkeeper attempt to transfer stale check assets to a successor provider, but maybe it's more common than I think.  Are other providers accepting stale checks in situations like this and how are you handling this?  Are there any issues rejecting the stale check being transferred? 

Hi.  We have received a check for around $500 from an investment fund where we are unable to determine what participant it applies to.  The check is made payable to the plan.  Apparently the SEC ordered a settlement under an administrative proceeding.  Certain investors received settlement proceeds if they were affected by market timing activity in 2001-2003.  We have not been able to figure out what participant account to apply the check to.  

What should we do?

I would be interested in reading comments from our QDRO legal beagles:

http://hr.dickinson-wright.com/2019/05/24/surprise-a-qdro-can-apply-to-a-welfare-benefit-plan/

Took over a plan that the document excludes highly compensated employees from receiving the safe harbor match.  The plan now wants to change and give the safe harbor match to everyone.  Can I amend mid year or do I need to wait until January 1, 2020.  Thanks.

A non-governmental 457(b) plan is terminating.  However, the plan document was never updated for PPA, HEART, and WRERA.  I understand that any plan correction cannot be through VCP, but the plan sponsor has option for the IRS to review their 457(b) plan document or consider any other document form issue by requesting a private letter ruling?

In a related issue, in distributing assets upon plan termination, what procedures can the plan sponsor implement when distributees cannot be located?

Our document software creates an SPD for delivery to participants.  I know it's not required but of course it is a good and thorough explanation of the plan so I would typically have clients distribute (whether exempt or not).  I have a new client where the provisions are quite complex and vary depending on which group of employees you are "disclosing" to, which makes production and distribution of the SPD's a bit more challenging.

So I know they are not required to use an SPD (they have informal informational sheets).  But are there benefits to distributing a complete SPD to all Participants which clients may wish to avail themselves of?  One thing that comes to mind is reducing the risk of an employee saying "Geeze if you had told me that.."

A single participant retired from a qualified, ERISA DB plan at age 55 with a life annuity with 10 years of payments (120 months) guaranteed. He named his sister as beneficiary. 3 years after the annuity starting date, he got married.

I presume the spouse has no right to the guaranteed benefits if the retiree dies before 120 payments have been made, correct? Any guaranteed payments will go to the named beneficiary (the sister).

Are there any issues if the retiree wants to change the beneficiary? I presume he could contact the plan sponsor to make this change - but I'm not certain if it would violate a code or regulation. I don't believe it would change the benefit amount - as the calculation of the life annuity with 10 years guaranteed does not factor in the beneficiary's age/sex. Does it create a new annuity starting date?

We're assuming the plan document is silent on the matter. It doesn't prohibit a retiree to change the beneficiary after the ASD, but it doesn't specifically allow it either. 

I am having difficulty interpreting part III. What is a lay-man's understanding of the difference between part 9 experience rated and part 10 non-experience rated? Are experience-rated fully insured while non-experience rated self insured?

Many thanks!

supposedly this is to be voted on this week. some of the provisions in the modified Bill are

Min Distributions increases to 72 in 2023 and age 75 in 2029

‘‘(I) for calendar years before

2023, age 701⁄2,

 ‘‘(II) for calendar years 2023, 2024, 2025, 2026, 2027, 2028, and 2029, age 72, and ‘‘(III) for calendar years after 2029, age 75.

I guess this overrides the DOL by saying if you self correct too bad DOL 

(b) LOAN ERROR.—The Secretary of Labor shall  treat any loan error corrected pursuant to subsection (a)  as meeting the requirements of the Voluntary Fiduciary

 Correction Program of the Department of Labor.

You can be late by 6 months for min distributions  

(d) REQUIRED MINIMUM DISTRIBUTION CORRECTIONS.—The Secretary shall expand the Employee Plans

 Compliance Resolution System to allow plans to which  such system applies and custodians and owners of individual retirement plans to self-correct, without an excise  tax, any inadvertent failures pursuant to which a distribution is made no more than 180 days after it was required  to be made.

 catch up may start at age 50 but if you are 60 you get even more

SEC. 121. HIGHER CATCH-UP LIMIT TO APPLY AT AGE 60.

(a) IN GENERAL.—

(1) PLANS OTHER THAN SIMPLE PLANS.—Section 414(v)(2)(B)(i) is amended by inserting the following before the period: ‘‘($10,000, in the case of an eligible participant who has attained age 60 before the close of the taxable year)’’.

 don't have to keep giving notices to people who aren't deferring, etc

‘‘SEC. 111. ELIMINATING UNNECESSARY PLAN REQUIREMENTS RELATED TO UNENROLLED PARTICIPANTS.

1. IN GENERAL.—Notwithstanding any other provision of this title, with respect to any individual account plan, no disclosure, notice, or other plan document (other than the notices and documents described in paragraphs (1) and (2)) shall be required to be furnished under this title to any unenrolled participant if the unenrolled participant receives

 you may have to let long time part timers into the plan to defer but no top heavy, etc.

‘‘(i) NONDISCRIMINATION RULES.—In the case of employees who are eligible to participate in the arrangement solely by reason of paragraph (2)(D)(ii)—‘‘(I) notwithstanding subsection (a)(4), an employer shall not be required to make nonelective or matching contributions on behalf of such employees even if such contributions are made on behalf of other employees

eligible to participate in the arrangement, and‘‘(II) an employer may elect to exclude such employees from the ap1 plication of paragraphs (3), (11),(12), (13), and (15), subsection

(a)(4), paragraphs (2), (10), (11), (12), and (13) of subsection (m), and section 410(b).

‘(ii) TOP-HEAVY RULES.—An employer may elect to exclude all employees who are eligible to participate in a plan maintained by the employer solely by reason of paragraph (2)(D)(ii) from the application of the vesting and benefit requirements under subsections (b) and (c) of section 416.

.............

I didn't see anything in the Bill that eliminates 3% safe harbor notice or allows you to add safe harbor after the fact, but maybe that is buried elsewhere.

Is the Plan Sponsor required to provide to a participant the specific funds or stocks they are investing in for a pooled Profit Sharing Plan?

New DB plan set up and client funds corporate contribution into an ambiguously defined savings account.   What makes this a retirement account or not?    Is intent relevant?  Is it automatically not a valid deposit if the account was identified in the name of the business owner (and later corrected)?   Or does it specifically need to be identified in the name of the plan or owner as Trustee?

Hello all, Had a client that didn't start an employee's deferral on time back in 2018. Since the missed contributions cross two plan years, how are the QNEC, missed match, and earnings  tracked in testing with the 2018 testing being completed already. The entire correction is being made in 2019. 

Also just wanted to clarify that the missed match goes in as match source and not a QMAC since it's corrective. Thanks! 

Hello! Long time lurker, first time poster. I'm still relatively new to the game but I've completed the requirements for my QKA and I know enough to know there's still a lot I don't know yet. 

We've taken over a plan and the plan contact informed a member of our admin team that their prior TPA had warned them of a penalty for the plan failing ADP testing for three consecutive years. I've not come across this in any of my studies so far, and I cannot find anything about it anywhere - not on ERISApedia, not on tag, google, IRS site, nothing.

Now, I know that the layperson generally has no idea what we're talking about when we discuss ADP/ACP testing or coverage or anything else, so the likelihood of the client having misunderstood something that the prior TPA said is certainly present. But have any of you ever come across this? If so, could you point me in the right direction?

Thanks!

This is a cash balance plan for a sole proprietor with employees.  We completed the annual contribution calculation, client asking if contributions must be made in cash or he can transfer some personally owned securities into the plan as contribution.

I'm leaning towards "no"; the doc makes no mention.

Short version: we took over a pooled profit sharing plan a few years back... all pooled except for a few participants with life insurance.  No one new has purchased policies (we've made the plan sponsor give each participant a form to sign off saying that they don't want to purchase a policy), and all those with policies have terminated and gotten paid out except the owner, so his is the only policy left.

Can the plan be amended to no longer allow life insurance going forward without causing a nondiscrimination issue?  Or are they doomed to be stuck in CYA-mode until the owner gives up his policy?  Thanks.

Another question on this. The corrective amendments to conform plan language to actual operation - I'm guessing that this will not override the normal timing requirements for advance notice in a safe harbor plan? Or, is it meant to allow self-correction n such a situation?

If an employee works less than 1000 hours for the past 5 years and in 2019 they work over 1000 hours, when would they enter the plan?  1/1 or 7/1 - 1 year - Age 21 - Actual hours.  Thanks.

A small, calendar year cash balance plan purchases life insurance in November 2018.  The insurance company says a Schedule A will not be completed until November 2019.

Assuming the 2018 commissions will be listed on the Nov 2019 Schedule A, is it acceptable to wait until the 2019 5500 to enter 2018 commission amounts on Line 10e Part V of the SF?  Or do we press the insurance company to provide the commission amount paid in 2018?

Thanks very much.