Plan allows for immediate distributions, and participant K separates from service and takes her money out ASAP.  Now we're doing the annual admin, and she is due $40 in safe harbor nonelective.  If the sponsor puts it into her account, it will get eaten by distribution fees; K will never see any of it.  But I don't think that the sponsor should benefit from this situation.  Is there a best practice for doing something relatively meaningful with this $40?  Thanks.

I just learned that the 1099-Rs for a 2024 RMD and plan closing rollover to an IRA were not filed.  I created the forms but the 1096 needs to be signed.  What are my options?  Can I sign the form as a "paid preparer"?   Could I apply for a PTIN and file the return?

I'm exploring the feasibility of integrating PensionPro with a SharePoint spreadsheet to automate the tracking of workflows. I would appreciate a recommendation for a developer/programmer. Thank you.

3% SHNEC Safe Harbor Plan.  Client wants to discontinue the SHNEC but a) the keys have already made substantial 401k, and b) they are top-heavy.

Can we discontinue the SHNEC as of April 30th (after providing the 30 days notice of course) and coincidentally create a short plan year ending 4/30/2025, and remain on a 4/30 plan year end for the foreseeable future?

I'll be darned if that doesn't work.  I think it does...  Otherwise he has to terminate the plan and everyone loses (because terminating is the only way to stop the top-heavy minimum). Of course all keys would be told to stop doing 401k (in fact I have made it my practice to exclude keys from the plan by design (I called it a top-heavy inoculation).

We have a client that would like to provide “concierge medical benefits” to all of its employees that have elected any level of medical plan coverage, which is provided under a fully-insured high deductible plan.  There are no actual medical benefits being provided via the concierge program.  Instead, the client has contracted with two geographically convenient general practitioners that will give “high” or “immediate” scheduling priority to participants, as well as much quicker response to requests for refills, etc. Actual medical expenses associated with the services will be run through the group medical plan as usual (e.g., cost of the visit, medical tests, etc.).  From the client’s description, it seems like the concierge service is merely a program to provide priority scheduling and refills. The projected cost for each employee is $2,000/year.  I am not sure if there is a different cost if the employee has elected family coverage, but in any event, it will all be employer paid.

Our practice is primarily focused on qualified and nonqualified plans, so this is out of the box for us.  At first blush, this program does not seem to be a welfare benefit plan, and I am thinking that the cost would be includable in the employee’s income.

Hoping someone has some experience with this type of program and can point us in the right direction.

403b plan  - calendar plan year has a payroll based match but the plan document allows a discretionary true up at year end. Question -  can we amend the plan at this point in 2025 to add a last day requirement? Or does the last day need to be added 1/1/26? 😊 Thank you!

Any advice for an employer/plan sponsor that says they don’t have records for certain rehires of a company they acquired a few years ago. So for example they hire an employee who says I used to work here - but employer cannot find records of prior work history to determine if they completed service for vesting - they have a 5 year schedule.The HR contact did mention there are boxes of hard copy data that I guess would be very hard to sort through. Employee does not have a current account balance in the plan. Can the employer be required to provide W2 or information of prior employment or any plan benefit information? Thanks!

We have a new 1 person plan who failed to file a Form 5500 despite crossing the $250k threshold that requires it.  I was looking at the DFVCP program, but one-person plans don't qualify for it.  Is there a correction program for plans that file Form 5500-EZ?  Trying to figure out how to get them back in compliance.

Thanks in advance!

When a participant seeks one’s spouse’s consent to name a primary beneficiary other than the spouse (or to elect against a survivor annuity), a consent has no effect unless “the spouse’s consent is witnessed by a plan representative or a notary public[.]” ERISA § 205(c)(2)(A)(iii).

Although ERISA does not preclude a notary from using electronic means to furnish the notary’s certificate of a notarial act, a notary must witness the spouse signing the consent. 26 C.F.R. § 1.401(a)-21(d)(6). Until recently, most service providers advised plan administrators that this calls for a spouse to sign a consent in the notary’s physical presence.

Under a proposed interpretation of the statute, a notary may witness the spouse’s signing with physical presence, or by using live audio-video technology and meeting all requirements and conditions under the proposed rule and the State law that applies to the notary. Use of an Electronic Medium to Make Participant Elections and Spousal Consents [notice of proposed rulemaking], 87 Federal Register 80501–80509 (Dec. 30, 2022).

That notice states: “Prior to the applicability date of the final regulation, taxpayers may rely on the rules set forth in this notice of proposed rulemaking.” Id., at 80506.

BenefitsLink neighbors, in your experience:

Are plans’ fiduciaries accepting a notary’s certificate if the certificate shows the notary did the witnessing not by physical presence but rather by audio-video technology?

Can one of you fine folks tell me how to DM someone who posts a message that I cannot respond to online? 

I assume DM means direct message? 

Thanks, 

David

A customer has had a defined contribution plan for a while, participation is open to all employees if they work the threshold 1000 hours. Now, the customer wants to cut back on who can participate based on their job types. The customer understands it can't change the rules for present employees. But for John Doe who is hired next year in a job classification that will be cut, I'm not sure how the plan can be revised to maintain the present participants and prospectively cut job classes. I've drafted a web of the 1,000 Hour Rule and its implications if not followed; I've looked at non-discrimination rules; I've looked at the general plan amendment rules. 

I'm stumped. What other rules should I read to figure out this goal? So far it looks like the plan cannot be amended to prohibit future participants based on their job classification, but I have to imagine there is some mechanism that allows it. 

Hello! A tax manager just came to me with some questions for a 401a plan - which I know nothing about. He spent a good amount of time looking things up and seemed to have gotten conflicting answers:

- Do employees contribute to these?

- Is participation mandatory? How would it be mandatory? 

- Is there an employee contribution limit? Are there catch-up contributions?

- Is there some kind of employer match on these? 

Thanks for your help!

Monday brain cramp (although the cramp is likely permanent...)

A lot of angst here over a small amount of money, but the question has come up if the death benefit can be directly rolled over to a trust for the benefit of the minor, or can it be designated as a beneficiary IRA? I'm really not sure on this one, due to the fact that there was no "designated beneficiary" by the participant. I believe it has to be under the control of a guardian/Trustee until age of majority regardless of rollover status. Thoughts? Thanks!  

Update - after having done some additional research, this seems to get complicated even further. It seems like it will be ultimately governed by state law, since ERISA doesn't appear to specify specific handling. So we'll need to tell the Plan Administrator and client to consult legal counsel. Seems like the legal guardian (and there is one) can make it easy (on the advice of counsel) by either setting up a UGMA trust/custodial account, or direct a rollover to an inherited IRA set up for the minor beneficiary?

hiya! I'm wondering if anyone knows of good certificate or other online courses that would be good for non-attorneys working in the ERISA legal world. I've gone through ASPPA and CEBS already - so i'm looking towards more legal-centric options (like estates, legal writing, etc). Not interested in a full masters program or anything of that sort. Thank you!

A small Non-profit entity has a 401k Profit Sharing Plan with Safe Harbor Non-elective contributions. The Discretionary contribution is set up as each participant is in their own allocation group. There are no highly compensated employees.

All eligible received a 3% Safe Harbor Non Elective. They want to give one particular employee a Discretionary contribution to reach the 415 Limit. This exceeds 25% of that participants W-2 income. Are they in violation of Section 404 since that employee is the only one benefitting from the Discretionary and should be limited to 25% of Benefiting Employee compensation? Since the other employees received the 3% Non-Elective are all compensations considered for purpose of determining Plan compensation for Section 404? Because this is a non-profit does Section 404 even matter?

Hi

Here is a new one for me.

Client just informed me that the RK (no name) returned the 2023 PS contribution to him in January (he just informed me a few days ago).

He sent them the check back in September.

As this is a combo plan, there are 2 issues:

• Deduction was taken for 2023 but deposit was not made
• Gateway/top heavy is not satisfied

Anyone came across a situation like this and what is the correction?

Thanks

I had 3 employees terminate during 2024 in this dentist practice.  As a result the 410(b) average benefits percentage test has failed.  The solution is to overide the test and add back into the mix one of the terminated employees.  Does it matter which employee I override and provide a PS contriution to in order to pass the test?  Of course the obvious choice would be the one who earned the least because that the contribution amount would be smaller. 

I know a Safe Harbor Match is a discretionary true-up, if it is done on a payroll-by-payroll basis.  I just wanted to confirm that a document can allow a QACA match to be handled the same way?

Thanks in advance!

And the Nerds Cheer?

Secant, tangent, cosine, sine. Three point one four one five nine!

401k plan with 3% NESH and integrated PS allocation provisions (last day+1000 hours requirement)

The only NHCE terminates during the year with less than 500 hours.

3% NESH is allocated.

Plan fails ABPT but passes ratio testing under 410b.

As the participant got 3% NESH, cannot be excluded from PS, correct?

Gateway is 4.5% i.e. would require 1.5% additional PS allocation, or more to pass 401a4.

Anything I am missing here or misrepresenting?