Based on some prior (but pretty dated) posts here and other items, it seems separate Form W-2 reporting of regular, after-tax 401(k) contributions (i.e., non-Roth contributions) is more of an optional than a mandatory item that may be reported in Box 14 of Form W-2?  Does that seem a fair statement? 

The employer will include the after-tax amounts as part of wages subject to tax and withholding getting reported but the question is do they also need to separately break out and report the after-tax 401(k) amounts elsewhere on the W-2?  They prefer not to do so which I suppose is understandable from an administrative perspective although I can see some benefit to including this information for transparency and confirmatory purposes.  (Seems like that may also prove useful if questions ever arise as to what a participant's basis is in the after-tax account under the plan (e.g., if the record keeper loses track of that information going forward)).  Thanks.

Hi All,

I'm looking for solutions on how to deal with FSA account balances of employees whose employer is being merged into a different entity as of 1/1/19.  The surviving entity has its own FSA, so the merged entity's FSA is being terminated effective as of the end of the CY (creating a stub year because the plan year was originally FY 6/30).  Other than amending the soon-to-be-terminated plan to provide a 2.5 month grace period, is there any other way to protect these employees from losing their account balances?  Thanks in advance.  

Company ABC had a 401(k) plan for several years.  In May 2017, they adopted the XYZ MEP.  It's an open MEP.

How does the ADP test work in this case?  Do we (they) do one ADP test for the entire 2017 plan year?  Or, do they run two ADP tests, one from Jan to April and the other May to Dec?

I'm a sole proprietor and I open a defined benefit plan for my company (myself) in 2015. The plan administrator is telling me that I need to restate my plan by 2019 and there is a hefty fee on top of the annual maintenance fee. Given that I haven't changed anything on the plan and it's only for me a single employee, must I really restate the plan?

1. Suppose  a traditional defined benefit plan prior to restatement for PPA'06 has actuarial equivalence for optional forms other than lump sums as 7.5% UP84 and for lump sums the greater of 417(e) and 5.5% with applicable mortality. Is it a cutback to restate the Plan with the lump sum now being the greater of 7.5% UP84 and 417(e)?.  If it is a cutback must the AB on the restatement date   merely be maintained and the PVAB at 5.5%/applicable be computed as an additional lump sum  floor on ultimate distribution or does the document also  need to spell this out?

2. Similarly if the AE basis is changed  from 7.5%UP84 to say 5.5% IRS applicable what are the cutback implications for optional forms other than lump sums and early/late ret factors( admin and doc language)?

Thank you for any comments...

Participant submitted request for a hardship withdrawal in order to pay the retainer necessary to hire a criminal defense lawyer for a family member (not spouse or dependent). 

Clearly, this doesn't fall under the safe harbor. BUT the 401k plan states that a hardship withdrawal may be allowed for "any other situations that, based on the facts and circumstances,  the Committee determines to constitute an immediate and heavy financial need."

Thoughts on whether this could be allowed under IRS regs?  I think main issue is whether this is a need of the Employee's, as required (or spouse/dependent/primary beneficiary).  If payment of funeral expenses for a "family member" can be considered a need of the Employee (as stated in regs), can that logic be extended here?  Cost to hire lawyer to keep "family member" out of jail could be considered a need of the Employee? (i.e. Father "needs" to keep adult child out of jail? has no expectation to repayment, etc.) 

Interested in what you all think...

Large plan (125 participants) filed Form 5500 but failed to include an audit with the filing.  Are penalties automatic or are there allowances for first-time offenders?  The instructions say that penalties MAY be assessed or imposed, unless failure to file properly is for reasonable cause.  What would they consider reasonable cause?

It was discovered when I brought a copy of my Marital Settlement Agreement and my QDRO for my 401k plan to my financial advisor that my premarital portion was subtracted from the balance on the date the divorce was entered and the remaining balance was split 50 - 50.

How ever, the marital settlement agreement states that my premarital portion was to be identified and that it would then be treated as if it made 5% interest annually for the 20 years that I was married. This new amount would then be subtracted from my 401k balance (a much larger amount) and the remaining balance split 50 - 50.

At the time of signing the QDRO my lawyer advised me that the document looked proper and followed what all parties had agreed to in the divorce. (I always asked before signing anything if there was anything that was changed from a draft or not in my best interest since most of this paperwork is confusing and I am paying him for his expertise in the matter.)

The marital settlement agreement has never been amended.

If the QDRO does not match the marital settlement agreement filed and no amendments have ever been made since that filing, is the QDRO valid?

Can it be amended since certain portions of the marital settlement agreement were omitted from the QDRO?

This omission was missed by both lawyers.

I believe the QDRO was prepared by my xwifes attorney.

I live in Illinois.

My ex-wife has already received her portion of the 401k (including the 5% portion of interest that was awarded to me via the marital settlement agreement)

Thank you

A plan discovered a significant error from plan years ending December 31, 2012, 2013 and 2014. The plan submitted a VCP application and it was approved. Part of the correction is to fix the ADP failures. The plan was not tested correctly and refunds were never processed. Every participant needing a refund has taken their money and rolled it to an IRA. In which year should the 1099 for the excess amount be coded? Is a corrected 1099 sent to the participants for 2012, 2013, 2014 respectively?

Thank you

Can a 401(k) plan allow for Roth rollover contributions but not Roth elective deferrals?  If not, why not?

In our FIS Corbel document under Maximum Annual Additions it provides in part that if an employer contribution that otherwise would cause annual additions to exceed maximum permissible amounts the contribution is reduced and any amount in excess of the maximum permissible amount that would have been allocated "may be allocated to other Participants".

We have an employer with the only three participants who are all owners or related to owners (no other employees, all HCEs).  Two out of three of the participants have maximized their 401(k) for the year.  When we determine the 25% deductible employer contribution based on eligible compensation and we allocate based on plan formula these two participants will hit their 415 limit.  Which then per plan document would be allocated to the other owner who did not defer.

Any problems with allocating additional monies to this third participant once the first two participants have reached their 415 limit?  I have been told that this is aggressive but I cannot find any guidance that says we cannot do this.

Thanks in advance.

Which governmental activities stop (or continue) during a U.S. Government shutdown?

Here’s the Labor department’s plan:

https://www.dol.gov/dol/Contingency_Plan.pdf

And here’s the Internal Revenue Service’s plan:

https://home.treasury.gov/system/files/266/IRS-Lapse-in-Appropriations-Contingency-Plan_Nonfiling-Season_2018-12-03.pdf

Other plans:

https://www.whitehouse.gov/omb/information-for-agencies/agency-contingency-plans/

A safe harbor 401(k) Plan will be terminating 12/31/2018. 2 active participants are over age 70.5 but are not 5% owners and have not separated service.

Are they required to receive a 2019 RMD from the Plan if they are still employed at the time the distribution is made in 2019?

If the are not required to take an RMD and they rollover 100% of their balance due to Plan termination but later  separate service after the rollover but before 12/31/2019, is a retro active RMD triggered for 2019? 

One of our clients had an accidental death.  She has a husband but her business is real estate.  He can receive her post death commissions for a time.   Can a contribution be made for the 2018 plan year for her?  

The employer occasionally uses the services of a temporary agency to find new talent. Occasionally after 90 days the "temp" is offered a permanent position with the employer. Does the employer have to count service while a "temp" for the Plan's eligibility waiting period, vesting credits and accruals? In other words, does the employer have to bridge that service while working "temp" now that they are hired to a permanent position with the employer?

Thank you

Not For Profit (NFP) sponsor of 457b plan permits retired participants to either take a lump sum distribution or equal payments over a 10 year period after retirement.  For those who take the lump sum option, this distribution amount is included in their final issued W-2 as they are still on payroll.   The instructions for W-2 indicate that distributions from a NFP 457b plan are to be reflected on a W-2.   If retired employee is no longer employed by the NFP, is the NFP still to report the annual distributions on a W-2 with required withholding or are there any other options? (1099Misc??)  Thanks

Can an employer have as an excludable class of employees by specific name?  For the 401k plan we are drafting, the employer wants to exclude HCEs (about 15) but not exclude 3 of them.  For excludable class, could they have in their plan document something to the effect that "all HCEs are part of the excludable class, except individual A, B and C"?

Any thoughts?

Thanks

One of my governmental clients has acquired a not-for-profit entity with an ERISA 403(b) plan.  The governmental 403(b) is voluntary only, with employer matching contributions made in a governmental 401(a).  The ERISA plan does allow for matching and discretionary contributions.  Other than universal availability, are there any control group coverage/testing issues to be considered?  

If the 5500 is prepared on the accrual basis of accounting would a participant have an account balance at year end for the purposes of Line 5c on Form 5500-sf if a participant did not have any money in his/her account as of 12/31 but did have a receivable for a contribution deferred prior to 12/31 that was received after year end?

Have a new client - all employees are family members and all are HCE.  Want to adopt a 401(k) plan for 2018.

I know the 3 month rule for safe harbor plans.  But for non safe harbor plans unable to find specific guidance.  Something from my past says that all participants have to have an effective availability to the Plan.  If all HCEs with the ability to bonus out at end of year for 401(k) any issues with adoption in December for a calendar year plan?