We have a money purchase plan with two allocation groups.  It satisfies the minimum allocation gateway.  There is a non-standard definition of compensation which leads to my question which is, can a money purchase plan include a minimum allocation?  For example, if the two allocations for the two groups are 7.5% of eligible comp and 5% of eligible comp, can the plan also provide that regardless of above no participant shall receive less than 2.5% of total comp?  Thanks.

Company had SIMPLE IRAs for their EEs in 2017 & '18.  There were deferrals (one in '17 and one in '18) that were withheld but not sent to the IRAs.  The IRAs are closed (they still exists, but no new money is being contributed)

Company has 401(k) Plan for 2019.

Most of the people still have the IRAs as they are waiting to roll the money into the K plan.  One person cashed theirs out.

They are small amounts, less than $50.

I'm guessing they need to deposit the amounts to the existing IRAs.  What about the one who closed theirs?

I haven't seen a plan document (if there is one) but here is the election form.    Each employee that is given this form is allotted (x dollars).  This is money the employer gives them.  The employer does not deduct anything from their paychecks.  The bookkeeper writes checks to employees directly after they submit supporting documents stating that they used the money for things such as medical bills and/or dependent care costs. I haven't seen such an arrangement before, as I don't deal with welfare benefit plans. Is this common? Given that they have a choice between the other benefits and cash to be deposited to an IRA, are the health/welfare benefits still non-taxable?

If this is actually under a cafeteria plan, is there a problem with the IRA arrangement - since the money isn't actually put into the "plan" then this seems ok? I'm very confused by this arrangement...

Flex Benefits Enrollment Options

(Year)

If you would like to participate in the Flex Benefits Program, please read the following and fill in the information on the included form.

For the contract year 2018-2019, (employer) is offering the following Flex Benefits to each staff member who is currently working 30 hours or more:

For the (x) contract year, the (employer) Flex Benefits amount is (x).  This is to be prorated from date of hire.  These funds may be used in the following ways:

1. All or some of the funds can be allocated to purchase health insurance provided by the (employer).

2. All or some of the funds can be allocated towards medical expenses not covered by other health insurance plans.

   Please note: Medical benefits may be paid to a designated beneficiary (other than the employee’s spouse or dependents) but this will then be considered taxable income and must be reported.

3. All or some of the funds can be allocated for Dependent Care.

4. All or some of the funds can be allocated for an IRA set up through the (employer).

   Please note: You may allocate funds not used for the above to be put into an IRA at the end of the year. However, this will be considered taxable income and must be reported.

    

   In addition, you may contribute your own PRE-TAX dollars into option number 5.

    

   By signing this, you acknowledge that you understand that you are committed to the enrollment choices on this form for the entire contract year of (X).

     

Flex Benefits for Year (X)

Name:___________________________ Social Security #:___________________

                                                Flex Benefit Portion       Employee Portion

1. Health Insurance          $_________________

    

2. Medical Expenses                    $_________________ 

    

3. Dependent Care                       $_________________

    

4. IRA                                         $_________________  $_____________

1. IRA: I wish to allocate any unused portion of #1, 2 or 3 to an IRA, understanding that this will become taxable income and must be reported.

_________Yes              __________No

AUTHORIZATION: I certify the above information to be true to the best of my knowledge and that the children for whom I will be claiming dependent or child care expenses either reside with me in a parent-child relationship or are legally dependent on me for their support. I further understand that the Flex Benefit amount will be in effect for the entire plan year and cannot be revoked except as permitted by federal law.

Signature:___________________________                Date:________________

There are discussions of this subject, but didn't find one QUITE on point for this specific circumstance.

401(k) plan, key person has deferred more than 3%. Not a safe harbor, but there is a discretionary matching contribution. Business is ceasing operations, probably in September. Plan will be terminated. The employer does NOT want to provide a top heavy minimum. No employer match or profit sharing contribution will be made for 2019.

Seems like if they make the plan termination date as 12/31/2019 rather than in September as they originally proposed, but all employees are gone as of, say, September 15, then they fail the last day requirement and no top heavy is due. Is it that simple, or am I missing the boat? (It would be different if they made the plan termination date, say, September 15th and that is the day all employees terminated employment.)

If Merchant Marine get a Merchant Marine Attorney!

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.