I just picked up a 403b Document for a Tax Exempt entity that excludes employees who work less than 36 hours per week, with a 24 month waiting period (Elapse Time) and a 3 year cliff vesting schedule.  Does this sound right?

For deferrals this would not meet Universal Availability Requirement.  As for the Match, If someone has been there for 24 months and has worked 1000 hours within a 12 month period wouldn't they be eligible?  Lastly, with a 2 year wait can they have a vesting schedule?

My current plan has 3 participating companies, all part of a controlled group.   The plan sponsor and two other companies.     The sponsoring company and one of the participating companies was sold, with one company remaining.     

Can I amend the plan so the remaining company becomes the plan sponsor?    

I have used Omni AdminWeb and OmniPlus but I see a lot of employers use Relius. Is there a he difference in the two programs and their functionality?

I have a newbie question. For the purpose of this question, I am assuming that the only death benefit being provided in a DB plan is the required QPSA (let's say it is equal to the plans QJSA of 50% J&S) and the QPSA is fully subsidized. No other death benefit in the plan.

Per treasury reg 1.401(a)-20 Q&A 37, a plan is NOT required to provide the written QPSA explanation if a) the QPSA is fully subsidized and b) it "does not allow a participant to waive such QPSA or to select a non spouse beneficiary". 

I think most plans in this situation would make the QPSA mandatory (not allow a waiver) and would therefore not need to provide the QPSA explanation.

However, is a plan in this situation (again, where the QPSA is the only death benefit in the plan and it is fully subsidized) permitted to allow the participant (with spousal consent) to waive the QPSA in favor of a non spouse beneficiary?

In other words - can a DB plan be designed where the only death benefit provided in the plan is a fully subsidized QPSA to married participants - but it allows the participant (with spousal consent) to waive the QPSA in order to make the QPSA payable to a non spouse beneficiary?

Notice 97-10 provides sample language for a spouse's waiver of the QPSA, and the example in Appendix B, Question 2, Option B seems to indicate that yes - the spouse can give up all (or part) of the QPSA benefit and it will be payable "to another person" "often called a beneficiary". Appendix B, Question 4, Option C provides a scenario where the spouse can sign a "general consent agreement" and the sample language says "If you sign this agreement, your spouse can choose the beneficiary who will receive the QPSA..."

However the DB Answer Book states the following:

Q 21:98, Can a participant name a person other than his or her spouse as the QPSA beneficiary? No. The QPSA is payable only to a surviving spouse (or former spouse under a QDRO) (see chapter 23). Example. With her husband's consent, Celia named her daughter as the QPSA beneficiary. After Celia died, the plan refused to pay a survivor's benefit to her daughter, saying the plan provided QPSAs only for surviving spouses. The court upheld the plan administrator's determination. [Butler v. Encyclopedia Brittanica Inc, 18 Employee Benefits Cas. (BNA) 2589 (7th Cir. 1994)]

Now, perhaps this question is assuming that the plan requires the QPSA to be mandatory and does not allow the participant to waive the QPSA in favor of a non spouse beneficiary (again, going back to 1.401(a)-20 Q&A 37). If that's the case then yes, I would agree that a participant cannot name a person other than his or his spouse as the QPSA beneficiary, as the plan does not allow such waiver.

But again, it seems that a plan is permitted to allow a participant to name a person other than his or her spouse as the QPSA beneficiary. Thoughts?

My client intends that vesting service starts on participation date, not hire date. I referenced the plan document which specifies YOS starting with employment date, however, I cannot find anything that specifically states that participant date cannot be the start date for vesting. Any ideas? 

CEO (a highly compensated employee) and company are negotiating employment agreement.  The parties wish to provide that, if the CEO opts out of the company's medical plan, the CEO would receive additional cash compensation in the amount of the company's cost of coverage for that plan.  Assume that the individual's compensation is $200,000 plus he would receive an additional $20,000 if he opts out of coverage.  The company does not offer the opt-out/cash-out benefit to other employees.

I am fairly confident that this arrangement will fail the contributions and benefits portion of the cafeteria plan nondiscrimination tests set forth in 1.125-7 because it discriminates in favor of HCEs with respect to employer contributions for total benefits (which includes taxable benefits).

My question is what is the effect of failing the nondiscrimination tests in this circumstance.  1.125-7(m) provides that in such a case, the HCE must include in gross income "the value of the taxable benefit with the greatest value that the employee could have elected to receive."  In this case, whether the plan is discriminatory or not discriminatory, wouldn't the CEO have gross income in the amount of $220,000 either way?  That would mean that failing the nondiscrimination tests would be meaningless, wouldn't it?

I recognize that the agreement can be structured differently to give the CEO the same economic benefit as the above proposed structure but I wonder if anyone has any thoughts on the effect of this structure.  Thanks.

A small firm (about 30 employees) has a safe harbor plan where the 3% nonelective safe harbor contribution is made.  My understanding is the top heavy testing is deemed to pass for a safe harbor plan but what if the firm elects to make additional profit sharing contributions?  Under what circumstances, if any, would top heavy testing need to be done and how would the profit sharing contribution need to be allocated to avoid makin the plan top heavy (which it would be)?  Thanks for help.

A former partner in a law firm is now just a 1099 employee of the law firm as they are of counsel.

This former partner maximized his benefit in the cash balance plan of the law firm. Can we set up a new cash balance plan for him using his 1099 wages or are his 1099 related to the law firm somehow and therefore he has already reached him maximum benefit?

A company has a group of 80 employees that are part of a large union plan.  The contract has not settled and negotiations are not happening at this point.  What happens to these 80 employees?  Are they now non-union  employees and have to be included as not benefiting in the non-union 401(k) plan?  Do the employees have to first formally disavow the union in order to be considered non-union?

To provide a retirement plan’s participants an investment alternative they perceive as having no risk of investment loss, the plan uses an insurance company’s separate account and group annuity contract.  The separate account has the one plan as the account’s only beneficial owner.  The annuity contract provides each quarter-year a credited interest rate determined by amortizing investment gains, losses, and values over a duration that approximates an estimate of an average duration for the investments held for the separate account.  The contract has delayed payments or a market-value adjustment if the plan leaves the insurer when the separate account’s market value is less than the book value credited to participants.

The plan’s communications writer wants to label this participant investment alternative the stable-value fund.  Everything else in the plan’s menu is a registered-investment-company fund or a bank’s collective trust fund.  The writer thinks it’s less confusing if the communications use the word “fund” to refer to every investment alternative.

But another person (not me) says it’s misleading to call an investment alternative a fund if it’s not legally a fund.  She wants to use stable-value account.  She says “account” uses language that insurance law uses.  (She suggests also using “investment alternative”, which ERISA’s 404a-5 rule uses, as the general reference over the investment funds and the stable-value account.)

What do you think?

In considering whether to use or avoid the word “fund”, does it matter that amounts credited to a participant’s plan account can be more than or less than those that would result from the separate account’s recent investment results?

Do you think “fund” is misleading?

Is there a minimum rate that needs to be given as profit sharing? 

Facts and Circumstances

Plan Sponsor (C-Corp) has a 401(k) plan. the only contributions are typically 401(k) deferrals, discretionary match, and prevailing wage. 

Prevailing wage goes to everyone (stupid I know, but we did not write the doc), and the owner did receive a very very small (less than 1%) PW. 401(a)(4) passes, but 410(b) coverage does not. 

1. I'm not aware of any special rules for PW - but if there are any that would negate the need for 410(b)? Is average benefits good enough? I'm thinking no, because the allocation method and groups aren't a safe harbor or definitely determinable as in an older style new comp plan. 

2. the plan allows PS - on a pro-rata basis, and if a PS is given according to the document, and 410(b) is combined with PW it does pass. But how much PS should be given? 

- plan is not top heavy, and 401(a)(4) passes on an allocation rate basis, so no gateway minimum either. 

Surely someone has encountered this before? It is 10/15 so there may be something simple and stupid I'm not thinking about clearly. 

Happy October 15th!!  For those of you who work for, or own, a TPA and administer plans, what is the size of your caseload? The TPA for which I work keeps our cases around 45 for each admin, which is great, and manageable most of the time. My husband, who at 67, is quite a bit older than I, and also an admin is considering leaving his job because he has a case load of 120 plans, which he and I both find ridiculous.  He's not ready to retire since you don't get max SS until 70.  Curious to what others have as their caseloads.  Thanks in advance!

This may not be the most appropriate board to post the message, but I'll roll the dice. I cannot find anything specific on this topc. Even the regulations on 401(k) hardship documentation do not actually state what length of time the plan sponsor must keep these records - just that it must. Does that mean there is no time frame and records are to be kept indefinitely? Or would 7 years be sufficient? What my client really wants to know is what is the shortest amount of time that these records must be kept?

Before starting, I have read the helpful threads here about tip income.

My client pays out credit card tip income at the end of each shift.  None is run through payroll.  Obviously 401(k) deferrals cannot be withheld from cash tips. (the election percentage is based on gross wages including tips, yes, the cash cannot be paid back to the employer to cover that withholding)  The question is, is the employer responsible for withholding from credit card tips if they cash them out on a per shift basis?  Would they not have to be considered similar to cash tips in that case?

They have a safe harbor plan and cannot exclude tips from the definition of compensation or from salary deferral election without it being discriminatory.

Their auditor states that they are required to hold on to those credit card tips until sufficient withholdings are met.  There are obviously times when the net check is zero prior to being able to withhold 401(k) contributions, or where the full election cannot be withheld.

Thanks in advance for any advice.

Is anybody going to apply the new hardship rules January 1, 2019 or are you waiting for IRS guidance?   Our relationship managers are pushing to implement January 1 and our document provider (FTW) is not going to update the document until the IRS issues guidance.     Fidelity is implementing January 1.    What are other document providers like ASC, R.A., etc. doing?    Thank you

When will each of the recent pension relief rules we've been living under (MAP21, HATFA, etc.) expire?  Will it be a big deal? 

Employer had two late deposits during 2017.    If they correct it on their own, and deposit lost earnings, are they required to file a Form 5330 with the excise tax?   

5500s now ask for a MyPAA confirmation number for plans covered by PBGC.

What do you do if the plan is covered but you have no confirmation #?

What if you check Not Determined?  What if you force it through EFAST - will it accept it?

I am being asked if there is a legal requirement to produce notices in Spanish or other languages for people whose primary language isn't English.

Mind you the client agrees it is a good idea and is trying to get translations done.  They just want to know if there is a requirement and if so which notices. 

I'm looking at a plan currently with pro-rata allocation.  Plan includes both union and non-union employees.  Employer is considering giving different allocations to union and non-union.  If union employees are eligible for plan and allocation, can they still be excluded from 410(b) and 401(a)(4) as statutory exclusions?  Thanks.