The owner of a large company deferred 18,000 in 2018.  He gave back his entire 2018 salary at the end of 2018. They now want a refund of 18,000 processed for him. Anyone ever had this situation?

For NQSOs issued to a non-employee director,  does the Company issue him/her an IRS Form 1099 to report the income on exercise?

Thanks

Have a 1 participant traditional DB plan that has existed for 4 years. The employer (and participant) never had or never will have any employees. The participant is age 55 and the plan currently has NRA of 62. If the participant's accrued benefit is grandfathered, is there any problem increasing the NRA to 65?

Thanks.

Participant took a hardship in 2018, but the ER did not suspend the deferrals.  What do we do now?

I think we just suspend the deferrals for 6 months going forward? 

What about the "no more suspension" rules for hardships?

Employer A was a participating employer in a PEO.  PEO had a safe harbor 401k plan.  PEO plan is a calendar year plan.

Employer A has decided to leave the PEO 401k plan and establish its own plan. Effective  in April,  they want to spin-out of the PEO into their own  plan. It is my understanding that client would be subject to  ADP/ACP test for the short year under the PEO since the safe harbor provisions were not in effect for a 12 month period.  Is my assumption correct?

My thought is that the  Plan  ( effective in 2019) would  essentially be a new start-up  plan for this Employer A with assets  attributable to them  being  transferred from the PEO. This would be Employer A's #001  plan.  However,...

If the 2019  Plan is a start-up (effective  April  1, 2019) and this Employer wants to have a fiscal year end 9/30 PYE, would they be eligible to establish this Plan as a Safe Harbor plan? There would obviously be more than 3 months left in the PY to make elective deferrals. BUT would this fail the safe harbor rules of no consecutive short plan years?  What about establishing the Plan Year as April 1 to March 31 for an initial full 12 months and then change to another fiscal year end  in the future if need be.

This is the first time we have come across this kind of request.  Any guidance or cites you can provide would be greatly appreciated.
 

Company A, who has a 401(k) plan, buys Company B (with no plan) today, and they grant all service with Company B.  The plan has the standard 21/1/semi-annual entry.  When do the new EEs enter the plan, assuming they all satisfied the 21/1 requirements?  Can they be held out until 7/1, or do they have to be immediately  be eligible since they have their 1 yr of service and already have passed an entry date, similar to a rehired EE.

Eligibility is 18 and 1 year of service - immediate entry date

Computation period changes to Plan Year if service is not met during the initial computation period ( date hire to date of hire).

Hired 4/1/2017

As of 3/31/2018 - employee did not complete 1,000

Moves to Plan Year 1/1/2018 - 12/31/2018

Question - as of 7/10/2018 employee completed 1,000 hours, does the employee enter 7/10/2018 or does he wait until the close of the 2018 year end and enter on 1/1/2019.

Does the determination of the 1,000 hours get done after 12/31 or when they are actually met?

Thanks

I'm not seeing an EPCRS solution to a situation where a participant had a 12% deferral rate, subsequently lowered it to 1% but the employer continued to defer 12% from the participants paycheck. Is this a situation where the excess over what was desired to be deferred can be returned to the participant or is the excess deferral over and above 1% stuck in trust?

SEP is sponsored by a Sch C entity.  Now that entity has become a sub-S corporation.  Can the SEP sponsorship be changed to the new entity?  They want to maintain the same eligibility instead of starting over - also wouldn't mind keeping the same SEP IRA accounts.

Thanks!

Here's the situation. A group of employees recently voted to unionize and negotiations for a collective bargaining agreement has commenced. The current 401k plan offered by the company prospectively excludes union members. Accordingly, the company now wants to establish a separate 401k plan for union employees. There are a number of employees who participate in the current plan will now be ineligible for the current plan and have to switch to the plan which will be established for union members. What are the legal considerations in having employees have to switch plans?  What types of things should we (union employees) be paying particular attention to? We want to make sure people who have to switch plans aren't harmed in the process. Any and all feedback would be greatly appreciated.

Executive has a $600k base salary under an written employment agreement.  If he is terminated w/o Cause or he terminates for Good Reason, he gets base salary continued for 1 year plus pro-rated annual performance based bonus.   Employer can extend the severance for up to another year and continue to pay him the base salary  for up to 1 more year.  Meaning, executive would get another 600k of salary (for another year) if the employer extended the noncompete by another year by giving executive notice within 45 days after termination date.  Any 409A issues?

Working on the 2018 valuation for a balance forward profit sharing plan, I found out the company was sold in 5/2018 and technically the plan should have terminated as of that date.  No one notified us of the sale of the company, 

A terminated participant was paid out in 3/2018 at 40% vested.  They terminated in 2017.  Since he was paid out prior to 5/2018, should he forfeit his non-vested balance at 12/31/2018 or be made 100% vested and paid out the remainder?    

Father (88%) owner and adult Son (12%) owner are the only employees of company X. They are a corporation and not a partnership. The two make their contribution as a real estate investment with no eligible plan assets. Does this need to be filed with a full Form 5500 or can it qualify for a title 1 waiver?

1 plan with 2 sponsors (husband and wife owned 2 related companies, and adopted one plan for all ee's).

Wife sold her company, so I removed her company as one of the sponsors, and all of her ee's rolled or cashed out.  Except 1.  (There's ALWAYS that one!)  All of husband's company's ee's/part's were unaffected.

This 1 participant (ee of wife's now-sold company) has over $1000 so we can't force her out on that grounds.  The plan is still technically active, but the husband's company is now the only sponsor.

Does this participant HAVE to take her money out?  Her employer is no longer a sponsor, BUT the account still exists.

Thanks!

We are currently bargaining for a first contract with an employer. The Employer currently has a 401k plan in place and has stated that union members cannot participate in the plan and have pointed to language in their SPD which states that union employees whose employment is governed by a collective bargaining agreement under which retirement benefits were the subject of good faith bargaining are excluded from the plan. (The Employer is offering a separate 401k plan for union members with lower contributions). The exclusion of union members seems permissible to me. Am I missing something? Any feedback would be appreciated.

We're a small TPA firm. I've run into multiple ERISA attorneys advising our mutual clients lately that they must do a 50% QNEC for missed deferrals in situations that seem to me to clearly fall under Rev. Proc. 2015-28 for a reduced QNEC.

The first one said that the lower QNEC can only be used if it is a failure to enroll -- not a failure to follow an election for an existing participant. In this case it was a failure to withhold from bonuses. It was caught and corrected almost immediately.

The second one was a new plan that failed to implement auto enrollment for anyone for several months after the plan began. This is clearly the exact scenario described in the Rev Proc. I won't know until a call tomorrow why the attorney believes it doesn't apply.

Are others finding similar resistance to proposed correction methods?

I'm working with a plan that uses W-2 Comp, but excludes (among other things) "fringe benefits (cash and noncash)."

Obviously, one of the big differences between using "3401(a) wages" and "W-2 Compensation" is the value of taxable group term life.  However, since GTL is a fringe benefit, would this amount be excluded under the above definition?  Or is it only the tax-free portion of GTL that is treated as a "fringe benefit"?

On a related note, would anyone take the position that cash in lieu of health coverage (i.e., an opt-out payment) is a fringe benefit?  (It seems to me that these payments are pretty clearly W-2 comp.)

Can someone take a distribution on Prevailing Wage when they are under Age 59 1/2 as an Inservice Withdrawal - currently working at the company?  I have seen in the past Empower allows it but the plan doc only allows in-service for over age 59 1/2.  Thanks.

Plan subject to 409A says executive will get five annual installments upon separation from service. If the executive separates and begins payments, but dies before receiving all five, the plan explicitly says the designated beneficiary will continue receiving the remaining annual installments in the same manner the participant would have received them. There is no election at any point. 

The plan further says that if no beneficiary designation is on file the remaining payments will be paid in one lump sum to the executive's estate. 

It seems to me that this would violate the one form of payment requirement by toggling the form of payment based on whether or not a beneficiary has been designated. Would further allow for manipulation, e.g., executive is terminally ill and wants survivors to have lump sum, so revokes the existing beneficiary designation and effectively elects lump sum acceleration instead of remaining installments.

Appreciate any thoughts.