Under a 401(k) safe harbor plan, a long-time participant has semi-retired. This participant now works only 200 hours annually and has agreed to do the same for the next 5 years or so. Does this participant continue to benefit each year in the employers safe harbor non-elective contribution, or is there a way to exclude this participant based on hours.

Deleted.

Background:
Deceased participant (widow) with no inheritable benefits
Deceased participant's account was terminated upon death
There is not a will in place
Nobody has been appointed as "executor" 
A final 1099-R has been prepared for the deceased participant

Question:
Who can receive the final 1099-R for the deceased participant? If there is no official executor, can the retirement plan simply mail the 1099-R to a family member of the deceased?

TIA for your assistance.

Can someone give me a link to where I can see the IRS service spanning rules?

TIA

I want to see if there is agreement of my understanding of the Regulations on this situation.

I have always understood that the regulations with respect to eligibility/entry dates are designed so that basically if a person must work 1 year/age 21, then the entry dates must be set in such a way that ultimately the person is not required to work more than 18 months before he enters the plan.  So a plan with a 1-year requirement and quarterly entry dates is fine, because no way would someone have to work more than 18 months before entering the plan.

HOWEVER, in looking more closely at the regs, they require that the person must enter by the earlier of:

• the 1st day of the plan year after meeting the 1 year/age 21 requirement OR
• 6 months after meeting the 1 year/age 21 requirement.

I am thinking this essentially requires every plan to use the first day of the plan year as an entry date, but I want to see if that is correct. 

We have a calendar year plan that wants to use entry dates of 2/1, 5/1, 8/1 and 11/1 to coincide with open enrollment for other benefits.  I think they MUST also use a 1/1 entry date.  EXAMPLE:  a person hired 11/15/18 works one year by 11/15/19, he must enter on 1/1/20, he can't wait until 2/1/20.  I initially thought the 2/1 entry date was fine because the person would be entering with 18 months of hire, but I think in this case, he must enter 1/1.

Agreed?  Any other thoughts?  Thanks!

two 401(k) plans are merging as part of an asset sale. Plan A  contains a few variable annuities and is being merged into plan B.  Plan B does not want he variable annuities. what are Plan B's options with respect to the annuities. i was thinking worst case if they had to they could take the annuities but not allow other participants to purchase any more. but the acquiring plan sponsor would prefer to either force participants to roll them or liquidate.   

I have a controlled group, 3 companies, all three have a safe harbor enhanced match, and 2 of the three companies allocate a pro rata profit sharing contribution.    I'm having problems passing gateway as a few employees work for 2 companies, one with the profit sharing and one that does not allocate one.     

Since the contribution is allocated pro rata, do I even need to run the gateway test.   If I pass the average benefits percentage test, is that all I need to pass?  the plan passes 410b as well.   

A catch-up eligible NHCE elected to defer the maximum in calendar year 2018. The calendar year plan allows catch-up deferrals. The employer stopped withholding once they reached $18,500. The employer started withholding deferrals again January 1, 2019.

To fix a missed deferral using a 25% QNEC instead of a 50% QNEC, a notice must be provided no later than 45 days after the correct deferrals begin. The error only affected catch-up deferrals.

The notice requirement states "Notice of the failure that satisfies the content requirements of section .05(9)(c) of this Appendix A is given to an affected participant not later than 45 days after the date on which correct deferrals begin;"

Could the term "correct deferrals" mean the next time a catch-up deferral applies to the participant? That would be the date on which such “correct deferrals” begin? If so, that would allow a 25% QNEC to fix the error.

Otherwise, the 45-day notice requirement can't be met and the 50% QNEC applies.

Plan allows for partial withdrawals so long as the amount is at least $85.

Is this a protected benefit?  If so, can the client change the minimum amount or is that protected as well?

Client wants to leave the the PEO's 401k plan and start their own. The PEO plan is a safe harbor. Does the client's new plan have to be a safe harbor as well? Do they have to continue with the same plan provisions?

Looking for general market place averages for internal analysis:

Average salary for entry level processors

Average salary for exp. administrators

Average plan count for administrators

Average plan size,  number of participants

Thanks for any input. 

Based on the work/life scenario listed below--- I was wondering what the maximum HSA contribution would be for both individuals for 2018. They both have separate HDHP's.

My daughter and her fiancé have a child together (1 year old ) but are not married. They live and share a home (rental) together.

She is claiming the child as a dependent because her income is well below $200,000 and she will be able to file as head of household and also will receive the full child tax credit of $2,000. She had a HSA (self only) for the entire year and contributed $3,450 this year. She is 39 years old. 

Her fiancé makes too much income to receive the child tax credit but has the child on his health insurance because the health facility/doctor choices are a little better.  He will file as single for tax purposes. He also has a HSA for 2018 and contributed $3,450 (self only). He is also 39 years old. 

My question is: Are they maximizing their contributions to each HSA and can he actually have a family HSA because the child is on his medical plan and contribute to his HSA as a family plan ($6900)?

Any guidance is much appreciated.

Thank you,

Rick S.  

Hypothetically, if we (US/ world) are heading into a recession, how would you protect your 401k investments now? Move your assets to bonds? Would you continue your future allocation as you have been or would you change it to bonds or something more secure?

If a plan has the same 1 month of service eligibility requirements for profit sharing as it does for deferrals, must the NHCEs all receive a PS minimum gateway allocation in a cross tested plan if they satisfied the one month wait?

Can you disaggregate otherwise excludables in this case? So, those that did not meet the statutory one year wait can actually receive $0.00 allocation?

I was under the impression that this would apply only if there was a separate one year wait on the PS component.

I would like clarification on this.

One of the plans we oversee had an NHCE who changed their deferral % from 6% to 10% in February. Somehow this got registered as 0% and for two pay periods, nothing was deducted. This should qualify under the "brief exclusion" rules.

The participant will end up getting the full match for the year because of her current 10% election and the fact that the sponsor does a true-up. Because this will qualify for "brief exclusion"  treatment, the employer is not required to make up the missed deferrals. However, the question has been asked - what if they WANT to make them up, even if not required to do so? Can they do so electively? 

Thanks,

Dog

I recently took over administration of a Cash Balance Plan that was effective in 2016.  When I reviewed the document I was a little concerned that under the Eligibility Section there was an exclusion for anyone other than Direct Owners, Spouses of Direct Owners and other HCE's.  I just assumed that the document was written in error or that they purposely did this to be able to add back in sufficient NHCE's to pass 401(a)(26) and 410(b).

Based on the printouts in the Actuarial Valuation Reports the Valuation Reports were run through Relius.  The 410(b) and 401(a)(4) tests all show "Pass" for 2016 and 2017.  However, when I reviewed the census information it appears that 8 employees out of 12 were coded as ineligible.  All 12 met the eligibility requirement of 1 YOS and age 21.  It is my understanding that the 8 "ineligible" participants should have been coded as Active with a $0 benefit.

Am I totally off base?  I would love to have some feedback before I go to a new client and say there is an issue with their prior years.

CPA has a plan with Morgan Stanley-- 401k/PS pooled account. He's allocating earnings based on salary (individual salary/total salary * gains/losses).  This gives someone who is eligible, but not participating,  a share of the gains/loss. Is this correct?

When changing advisors for a 401(k) plan, is it common to have a blackout period, even if the funds are staying at the same recordkeeper?

Can the Plan pay the expenses of a Trustee even if it is a Self-Trusteed Plan?

Sounds like a PT but since Owner is wearing the Trustee hat at that moment is it ok?

Thank you very much

Hi Folks,

TP is currently using a Nanny payroll provider that isn't doing a good job, and we need a new provider. They run a single member S Corp with payroll for themselves as officer, and have a boilerplate 401(k) plan (Solo/off the shelf).

Using a new 'Nanny specific' payroll firm (reporting on the Schedule H) not only is more costly, but adds a little more complexity than using one service. Perhaps most importantly though, running the wage through the S Corp's payroll provider will force frequent remittance of tax, rather than building a liability that may be overlooked until tax filing day.. and a sudden bill appears.

I see no issue in terms of a controlled group between the S Corp owner and the Nanny if paid via a third party payroll provider 'dedicated to Nanny tax' but wonder if bringing the Nanny onto the S Corp's payroll may cause an issue with ERISA in regards to there being an 'employee on the payroll that is not covered by the plan'. I've not seen a way to specifically exclude a household employee, but also am not sure if the Nanny is considered an employee of the S Corp simply if paid via the S Corp..?

Naturally, would carve out costs of payroll so that the Nanny wages and taxes are not deducted to the business.

Thoughts?