Participant designated family member before marriage, gets married, and then gets divorced.  Is the initial beneficiary designation reinstated or did the marriage void it?

Short version: Participant A requires a 415 refund every year, and the participant and/or plan sponsor don't change anything, so it keeps happening, so we do a distribution each Fall.  For 2022, we processed a refund in November 2023, but in January 2024 A called to say that the refund didn't reach her.  After some panic, it was re-processed in January 2024.  The refund for 2023 was processed November 2024, no problem.  Now upon further discussion, A realizes that she did get the distribution in November 2023, so she got it twice.  A is 49 years old, not eligible for any in-service withdrawal from the plan.

So step one will be to try to get A to return one of the distributions ($11K).  But she's already got a 1099R for it, and getting a recordkeeper to change it is going to be nigh-impossible.  So, really, what is A's incentive to return the money?  She's paid the taxes on it; if she returns the money, it gets taxed again on the way out?  I suppose we could try to set up an after-tax source at the rk, but... still, why would A want to return the money?

For the plan sponsor, they have to ask for the money back.  And if A doesn't return it...?  Document the process, multiple requests, but ultimately they can't really DO anything if she doesn't return the money, as far as I can tell.

What am I overlooking?  Thanks.

When installing a new plan, I have always obtained a new tax ID for The Plan Trust. I'm taking over an existing plan and it appears the employer tax ID and the plan tax ID are the same number. 

Has anyone one else seen this?

So I recently received a request to assist with a VFCP application. I was provided the total of missed deferrals, payroll date, recovery date, distribution of lost earnings and 5330s.

The failures occurred one in 2022 and twice in 2023.

The 5330 for 2022 is very vague and doesn't include the correct dates, but the amount used to calculate the excise tax doesn't match the VFCP calculator with the actual recovery and final payment dates OR even if I used the recovery date as the final payment date.

The 5330 for 2023 only includes one item which I can only assume adds the 2022 number to the lost earnings for 2023 instead of breaking them up by transaction and compounding the total, but this total is still off from what the calculator shows.

The lost earnings summary for 2022 matches the 5330 for participant allocations, but so does the 2023. I mean that the entire amount of what I believe was the combined lost earnings was allocated to participants in 2023.

I'm trying to get in touch with the TPA to see who taught them to fill out 5330s and how they came to their calculations. Regardless, it seems like the sponsor overpaid lost earnings by a around $100.

I can't use their documentation and evidence because it won't match the calculator so it looks like I have to redo everything including the 5330's. DOL hasn't started an investigation yet but has sent a few "poke the body" notices.

Does anybody have any other suggestions? And if I'm right and they did overpay lost earnings, is that a prohibited transaction in itself that needs correcting? We're talking a few pennies for the majority of participants and most aren't employed there anymore.

The plan has 3 employees. The owner and his spouse max their 402g and then an additional employee NHCE who doesn't contribute. The plan is a safe harbor 6% match. 

Since the NHCE employee didn't contribute for 2024. Can we declare a 4% discretionary match for the 2024 year and will the match have to be run through the ACP test? 

Is there anything I'm missing here? 

TLDR: Why is Price Transparency data not in wider use compared to UDS data?

I'm researching the relatively new Price Transparency data required by the federal government as part of the Hospital Price Transparency (Hospital Prices) and the Transparency in Coverage (Health Plan Prices) rules. It seems to me that these new data would be a boon for self-insured employers to reprice their current year's health care claims with pricing data at the level of individual services (i.e. HCPCS, DRGs, etc) and to choose a health plan that would provide them with better savings for all of their employees (especially those with high deductibles). However, from what I can tell, the current industry standard is to use the UDS (Uniform Discount and Data Specification) data for this purpose, even though the UDS data is prone to major inaccuracies and is at a much more aggregate level (aggregated across 3-digit zip codes). And further, many brokers and consultants I have spoken to are dismissive of the Price Transparency data as not very useful.

What am I missing here that makes the UDS data so much better than the Price Transparency Data?

There used to be an article on BenefitsLink about Who Is The Employer.  It seemed like I could easily find it when I needed it. 

I am not finding it.  Is it still out there?  If so, does anyone have the link? 

Thanks

We have a Cash Balance Plan that has been adopted since 2020.  For 2024 they have elected to amend the guaranteed interest rate up to 6%.

My question is how does this impact 2020-2023.  When we are accruing balances going forward, are those years still credited at 5% annually and all new years credited at 6% annually?  Or should those years have accrued interest at 5%, but going forward they too get an interest rate of 6%?

Basically, does the 6% only impact new contributions or does it impact all contributions moving forward?

I hope that makes sense!

We have a client who failed their ADP test and will be making a refund to the owner of the company. He is over age 73 and will need to take an RMD for 2025. Can the refund be treated as his RMD since it is a taxable distribution?

An IRA account holder (who was over the age of 73 and already started taking RMDs) passed away in 2024. A spouse rolled over the assets into an Inherited IRA, but did not take an RMD in 2024.

Is the RMD Penalty waived based on Notice 2024-35 or does that notice not apply to Spousal beneficiaries?

Thank you.

I'm working with a company that buys and sells companies across various industries. It owns 80%+ of each portfolio company, so they’re all part of a controlled group. Right now, each portfolio company maintains its own benefit plans. So far, they’re passing non-discrimination testing (on a plan-by-plan basis), but the company is looking for a better long-term solution. Any ideas on how to structure these benefit plans across the portfolio companies in a way that avoids triggering single-employer treatment? QSLOBs seem like the best solution, but imperfect as QSLOBs will not always align with the corporate structure. 

An employer (church) has two employees. One employee participates in a 403(b)(9) non-electing church plan, the other employee is contributing to a SIMPLE IRA.

Is this okay?

I was under the impression an employer cannot have both of these in operation at the same time.

The 401k Plan Sponsor wants to change when participants can make deferral changes from monthly to annually.  The plan document allows for it.  Are there any consequences if they make that change?

Why would a company offer safe harbor for nonunion employees and not union employees?

I'm new to 401K's and was hoping to get some confirmation or correction on a plan design.

I understand that the 3% SH nonelective contribution must be immediately 100% vested. My question is, if the plan also has a QACA does that remove the 100% immediate vesting requirement and change it to a 2 year cliff requirement?

Thank you for any guidance.

I am horrible at searching the message boards.  Is there a number at which point taxes do not need to be withheld from a distributtion? 

Reason... Bob was paid out but the financial advisor didn't wait for everything to settle and now there is $150+/- still in the investment account.  I am happy to generate a 1099-R if it is acceptable to liquidate the account and send it all... no withholding. Is that ok?   Is there a magic amount when taxes are not required to be taken?  Just be sure it is reported via a 1099-R?

Thanks  

I have a client who is the owner of a business - who also provides consulting service as a separate company to said business.  He is owner of both businesses.

Business number 1 is set up as a Safe Harbor Non-Elective plan with 10 employees.

The client wants to contribute his max deferral (comp $350k) of $23,500.00 plus receive his 3% NE SH of $ 10,500.00.  So for business 1 - he would have contributed (or received from the company a total of $34,000.00.

In business 2 - the client is the only employee - he wants to set up an After Tax contribution in the amount of $36,000.00 so he can max his total contributions at $70,000.00 for the year.

He also earns a separate $350k in this business.

So...After Tax contributions are tested in the ACP test of business 2 - but since the plans do not have to be aggregated for ACP Testing - what is to stop him from doing this?  It seems like he could just skip providing any Employer Contributions to business 1 (outside of the SH NE 3%) without failing any testing.

What am I failing to see?

Thanks!

Owner and one employee have 3+ years of service.  Owners spouse is hired 1/1/2025 and there are no other employees.  If I disaggregate for testing, the Otherwise Excludable portion of the test passes by default so I can give the spouse whatever percentage of pay I want.  The owner's comp is $250K.  I can give the spouse say $85% of their $50,000 or so and as long as my total contributions are wthin the max deductible, I should be good.

This is seems to good to be true but it seems to me that it will work. Anyone think I am wrong here?

Client has a 401 (k) Plan with 3% Safe Harbor.  Owners are not going to contribute to 401 (k) in 2025, till the Plan Terminates. Both Highly Compensated and Non Highly Compensated will continue to defer.

Is an amendment required?  Material Modification?

Have a good weekend.  Thank you.

DPSRICH

Have a 45 Participant Plan terminated effective March 2024. 6 of the Participants could not be located. Plan Sponsor sent the funds to Inspira, formerly Millenium Trust. Accountant says that each of the 6 Participants mus receive a 1099-R, even though technically they have not received the money. I agree that the money is out of the Plan, BUT is Inspira responsible for the 1099-R when the money is paid to the Participants.

Any help[ is greatly appreciated.

DPSRich.