My understanding has always been that the Section 415 limits are independent for a participant who works for two unrelated employers.  To clarify, Employer A has a plan and the HCE participant has a $55,000 Section 415 limit for 2018 in the plan.  Unrelated Employer B (no controlled group or affiliated service group) has a plan and the same HCE participant has a $55,000 Section 415 limit for 2018 in the plan.  There is no combined limit. 

At the 2018 ASPPA conference, I was in a session that was addressing this issue and the presenter said that even if the employers are unrelated BUT there is common ownership of more than 50% between the unrelated employers, then there was a combined 415 limit.  I am unable to locate anything in any of my research.  Does anyone know anything about this?  Did I mishear what was said?  Does anyone have a reference that I can read?  Is this in the EOB? 

I have a new client that has a safe harbor 3% non-elective plan that excludes NHCEs and HCEs of 2 of the three participating employers from making elective deferrals. The excluded employees are small in number and don't trigger a 410(b) problem and they do receive the SH contribution.  I have never had a plan with this type of exclusion.  I don't see anything in 1.401(k) -3(a-b) that prevents this but I thought I would ask if any one else has such a plan or an opinion on whether this works.

The plan is a multiple employer other plan because two of the employers are related and the third is unrelated. The two employers with the excluded employers are small with 10 or so employees while the third employer has over 400 employees all of which are eligible to make elective deferrals. Although the plan says it excludes all employees of the two small employers, I suspect that there are no HCEs employed by these employers.

Thanks for any insight you can give.

We are in the process of terminating a PBGC covered DB Plan. There are participants who we have not been able to get in contact with and have gone through a provider to do an employee search. We have exhausted all forms of communication (mail, phone, email) outside of showing up at the addresses provided and have not heard a thing. The phone numbers are disconnected or goes to a full mailbox of someone that is not the participant. The participant's lump sum value is above the $5K automatic cash out and all annuity providers we have reached out to have said that they will can't take on such a small amount. This is holding up the termination of the plan, what possible solutions are there to this?

Is it too late to add safe harbor match provisions to an existing 401(k) plan for 2019?

If a plan participant making after tax contributions converts the entire balance to Roth and the plan later fails ACP how would one operationally suggest the ROE be handled? Would you unwind the conversion for amount of the ROE plus earnings and distribute or simply process the ROE from the Roth source?

It may be a difference without distinction since it is all after tax and you just have to deal with the earnings but curious if anyone has dealt with this yet.

Can a calendar year 403(b) plan have as a condition for matching contributions that individuals must work 260 hours each quarter and be employed on the last day of each quarter?  Is it acceptable to have contribution conditions established on a quarterly basis rather than an annual basis, knowing that ACP and 410(b) will be tested annually?

Thank you

I've got a lawyer (naturally) who wants to establish a trust for the sole benefit of his wife as his plan beneficiary.  He's wondering if this requires her consent, since she is technically not directly the beneficiary... but she kind of is ("kind of" isn't his term, of course).  No, I don't know why he's going through all this, or if he's trying on purpose to not have her sign something - I'm trying to get those details.

Any initial thoughts?  Thanks.

Group:

I have a potential client who owns a company that has sponsored an ESOP some years ago.

This has become costly to the client and too many regulatory hurdles in their opinion.  They'd like to terminate at end of this year (12/31/18).  The client is under a TEGE audit.  Can the client terminate the plan while under audit?

The audit years in question do not relate to 2018.

Thoughts and comments appreciated.

An annual special contribution made by an employer for Union employees is invested in a Stable Value fund and can be transferred into the plan's default fund (target date funds).  Wouldn't it be a better practice to invest initially into the target date fund, which is their QDIA? Or would it be better to invest it according to the participants' chosen investment elections?

A governmental 403(b) plan, effective 2/1/2016, with plan year ending 8/31, provides for a fixed employer matching contribution of 100% match on elective deferrals up to 3% of compensation.  However, the employer failed to make the required matching contributions.

Thus the plan has an operational error and under EPCRS, as updated by Rev. Proc. 2008-50, mandates that the employer implement correction method that would restore the plan and its participants to the position they would have been in had the failure not occurred. Such measures would include:

1.  Make matching contributions on behalf of the affected participants retroactive to the time such contributions should have been made.

2.  Provide earnings from the time the matching contributions would have first been made.

3.  Redo 415 testing for the years in which operation failure occurred.

Are there other self-correction measures the employer should take?

There is an employee who has an accrued benefit who is over 70.5 and works seasonally. The company does not usually know if he will be coming back for the next year until ~March or April. He has not resigned from the company or retired but doesn't work the last few months of the year. Should he begin receiving an RMD?

We are drafting a new 401k plan for 2019, non-safe harbor.  200+ expected eligible participants.  Initially the plan was to be written excluding HCEs (HCEs would have their own nonqualified Deferred Comp program).   

The question was now asked can we let the HCEs into this plan so that they can rollover any 401(k) accounts from previous employer (presumably unrelated) 401k plans, but not have the HCEs eligible to make 401k contributions or receive any employer match (only 2 money types, other than rollover, allowed in the plan).  Does this sound acceptable?  This would only affect HCEs so discrimination issues would not seem to matter.

Thanks for any replies.

My ex and I went to mediation in April 2018. Settled on amount to be paid to me through QDRO (considering half retirement account/equity of assets and debts). My atty filed the paperwork. Divorce was final June 14, 2018. Through the mediation, I agreed to move with my 2 minor children. So, I had to find a house, down payment, closing costs, moving costs, etc. I also assumed the debt bc I planned to pay it off with a cash out of the QDRO. Came back for ex to sign on x amount back inn August. He refused to sign. He claims I didn't hold up my end of the bargain when turning the house over. Claims damage (there was none), claims I took things I shouldn't have (he made a list and I left EVERYTHING he asked for and then some). He said he doesn't have anything to lose. Right, I had all the expense of moving out and he's earning money on the money he owes me and I took the debt! His atty is a real treat and based on dates and texts I have from him, they were planning this all along- I just didn't see it coming until after the fact. So, they let me file the QDRO knowing full well that he was going to make me come after it. My atty told me in my county this wouldn't cost me more than 3500 as long as we settled in mediation. I paid him that and got an 8k bill after that. I have them hounding me for money but I'm a single mom and strapped. I have the bill down to 5800 but I need the QDRO money to pay him. He doesn't return my calls or emails for 6 weeks and the first thing he asks for is money! He asked me to settle with him after we ALREADY agreed. Finally, months later and I agreed bc I need to get this settled or I'm going to go into BK fast. I have borrowed from family just to keep my head above water. My atty claims he's waiting on a response from the other atty but it's gone on too long. I looked up what to do. It says file a motion to enforce the JOD. I was told when I do that, his atty is just going to file something claiming the mediation was done fraudulently. What can I do? My ex was controlling, abusive and manipulative and I still can't get away from it! Please help!

Is it permissible to include service within a specified period of time from a predecessor employer? For instance, only service completed since a certain date, or through a specific date?

In what is a unique scenario for our firm, we have a Plan where the Sponsor is a group of various health practices which have banded together to form one large corporation, where each "original" practice now owns a piece of this new company. 

When we originally established the Plan we credited all service from each predecessor employer, because those practices no longer employed the Larger group's employees, and these practices wanted the employees to become eligible based on their service with their practice. 

A new practice is joining the Group. For administrative reasons, we wish to exclude service with that employer prior to a certain date (1/1/2017, for example). This is to save us/the Sponsor from having to review whether or not any of the 500+ employees worked for this new practice at any time since its inception (30+ years). We wouldn't want to recognize all years, having the unintended side effect of resulting in an employee of another practice becoming eligible (and costing that practice owner the Profit Sharing contribution). At the same time, we don't want to ignore all service with the new group, preventing them from becoming eligible for the new plan. 

So, can we recognize / credit service from a predecessor employer during a specified period of time?

Is a plan using the "facts & circumstances" method of determining immediate and heavy financial need under Treasury Regulation 1.401(k)-1(d)(3)(iii)(A) permitted to impose a 401(k) contributions suspension period under the Proposed Hardship Regulations?

I realize that the preamble to the proposed hardship regulations state "the proposed regulations do not permit a plan to provide for a suspension of elective contributions or employee contributions as a condition of obtaining a hardship distribution." However, I couldn't tell if that applied solely to plans using the deemed safe harbor reason, or to both deemed safe harbor and "facts & circumstances" method. 

Company A wants to sponsor a plan in 2018.  Owned 50-50 by brothers.  Company was in existence since 2016, but only really started conducting business in October 2018.  Brothers, their wives and a child are all getting paid for services.  Company A adopts a 401(k) plan 10/1/18 effective 1/1/18.  21-1 YOS, semi-annual entry.  EEs employed 10/1 have service waived and enter immediately.

The brothers also owned another business, Company B, with 6 other (NHCE) employees.  So, controlled group.  Company B folded 9/30/18.  Company B did not have a retirement plan

Two employees from Company B started working for Co. A in November.

I'm guessing I have to count their service with Co. B.  When do they come into the plan?  January 1?

Do we have a coverage issue?

Company A, with 401(k), excludes nonresident aliens.  Employee B, citizen of non-US country with no US Source income, is employee of Company A starting Jan 1, 2018.   401(k) has 3 month wait.

Employee B is moved to US and will begin receiving US source income from Company A 12/1/2018.

In reading other posts, I believe service is counted since Jan 1, 2018, and Employee B would be considered as having satisfied the 3 month eligibility wait.

How about their compensation from Jan 1 to Dec 1?  I've seen posts that all non-US source comp is excluded (say for ADP test, determining next year's HCEs).  I've seen other posts that indicate the compensation non-US source income must be converted to US dollars and used for plan purposes.

Any assistance is appreciated.  Thanks.

Husband/wife own 96% of the company and are eligible for the plan. No other employees.

Their adult kids own the other 4%, but the kids are not employees, not eligible for the plan.

Eligible for EZ, or must they file SF?

Can someone speak to whether or not contributions to a 403b plan are tax deductible for a New Jersey resident?

someone is saying that they New Jersey does not recognize the deduction for 403b plans, but does for 401k plans.  Yet I have plenty of New Jersey customers and this has never come up--much less the issue of basis that people would have in their accoounts. 

It could even get messier if for example they do not get the deduction in New Jersey and then they move to  California to retire, and take the money out and pay California tax on the way out.

This just cannot be.

On a similar note, I heard the same thing about 457b plans.

A terminated participant has a residual balance of $5... so his RMD is less than the cost of the stamp it would take to mail the check to him.  I know there's talk of not having RMDs if the AB is <$50K, but that's not here today.  Any thoughts on just giving this a pass?  Thanks.