Is anyone aware of a cite that says the 5500 must continue to be filed until all assets are distributed?  I see it in the 5500 instructions, but I don't see it any the regs or any advisory opinion.  I did find a PLR, but I would like a DOL cite.   

My wife and I have a HDHP with my former employer and contribute to a family HSA. We are both on the same HDHP (not individual plans) and would like to max out our yearly HSA contribution. 

I will be on Medicare effective August 1, 2018 when I turn 65 but my wife will remain on the HDHP, since she is 63.

At the end of July, 2018, I anticipate to contribute $4500 to my HSA. My wife does not have an individual HSA. I would like her to open her own HSA in 2018 but I'm not sure how much she can contribute since I will have contributed $4500 this year before going on Medicare.

My wife will also be on the HDHP all of 2019 if this info helps.

Does anyone know how to calculate the maximum HSA contribution given the above information?  I don't see a similar scenario as above in IRS Publ 969. 

Thank you for your help.

Rick S

The client sponsoring the 401k Plan is a partnership.  Throughout the year, the partners deferred on their draw and calculated the 3% safe harbor calculations.   They put in the maximum of $24,000 (both over age 50) ....However, when  I received their K-1s - box 14a only had $24,000 as  self employment earnings and there is Section 179 deduction of $2035.   So I see a problem.... Am I wrong in using box 14a  (Schedule K-1, Form 1065)....They had draws of 192,000 and $108,000 so their 3% was calculated by their payroll dept. based on the draws.... Any insights or comments on how to fix this would be welcome......

Opinions needed, please - A plan is recordkept at a large, well-known financial services firm. The firm offers a budgeting tool that is accessible on their website and participants can sign up for it on their own, outside the plan, for a fee. The contract is between the participant and the vendor for the tool.

The tool is not offered within the Plan and the company has no involvement with the tool. Does the company have any fiduciary responsibility around the tool, simply because it is available on the recordkeeper's website where participants access their account? 

My wife has a 457(F) plan with a hospital in which her employer contributes $3,000 per quarter or $12,000 per year.

However, each $3000 quarterly contribution is taxed (Federal, FICA, etc) -- it shows up as a separate paycheck with applicable tax deductions -- and the remaining amount (around $2000) is then deposited into a deferred account that grows tax free until it is distributed at a later date based on SRF conditions.  As we understand, the SRF conditions are staying employed with the hospital for 3 years or meeting a retirement age of 65. 

Her HR Benefits department has stated that their 457(F) plan is unique in that it taxes the $3,000 quarterly contribution upfront.

She will be leaving her job and will not meet the SRF conditions so she will loose all of the contributions that are in this deferred account.

Since the $3,000 quarterly contributions are in her paycheck, taxes deducted, and eventually her W2 as income, should these contributions be deducted by her employer from her income and her W2 adjusted since she will forfeit these contributions?

Any thoughts or guidance is much appreciated.

Thank you,

Rick S

We are the TPA and we calculate the match for the client on a per pay basis.

Their pay period ending date was 5/22 but the pay date was 5/29. The next pay period ending date is 6/5 with a pay date of 6/12.

A participant met match eligibility on 5/24 and they are immediate entry. The client is thinking the person should not get a match until the 6/12 pay date because the pay on 5/29 is for time worked prior to her entry date.

Our system processes based on the pay date and as 5/29 is the first pay after her effective eligibility date, we are thinking the participant is ok to get match.

Any thoughts on if we should use the pay period end date versus the actual pay date?

Thanks!

The discussions of us taking over this ERISA 403b plan were going well, until they mentioned that they "purge" their employee records every couple of years.  They are currently with a low-cost (and low-service, but you didn't need me to say that part, did you?) recordkeeper that never questioned any lack of data or plugged data, and there was no TPA (the plan sponsor did their own employer calculation and their auditor did the 5500).

After they revived me, I started ticking off all the potential problems: RMDs, no ability to deal with missing/lost participants, proper coding of 1099-Rs, etc.

It's one thing if it's a smaller plan and you can get your hands around all the participants - maybe they know that there is no one who is 70 years old, and maybe they can track down all the terminated employees with balances.  But it's a different story when it's maybe 100 or 125 people in this situation, and the whole HR department is new in the past 6 months.

I've asked them to take a second look around for information, but let's say they really don't have dates of birth for those who separated from service more than three or four years ago.  Possibly a bunch of the addresses are no longer valid and no one has followed up on them... or are "c/o the plan sponsor".  On a scale of "very" to "run away". how screwed are they?  There's no easy fix to this sort of stuff that I can see.

Any suggestions on how to get this plan back on the straight and narrow without it costing a fortune are appreciated, thanks.

I have 4 companies - A, B, C, and D.  A, B, and C are a controlled group, and C and D are a controlled group.  A and C are not a controlled group and they do not qualify to be an affiliated service group.  Who do I test together?  My thinking was I test A, B, and C together, AND then test C and D together, but that could be redundant for C, so maybe I'm missing something?

I have a governmental employer who has a 401k plan.  Has anyone successfully used EPCRS to ask the IRS to allow a conversion from a 401k to a 401(a) Plan? I am hopeful that the IRS wont disqualify the plan and will work with us to get the plan type corrected.  I plan on submitting an anonymous VCP application asking for them to allow a retroactive amendment to change the plan type from 401k to 401(a) but am open to suggestions. 

I have a question. The Erisa Handbook tells you that you need to combine the match under both the safe harbor formula (basic formula; 100% of first 3%, 50% of next 2%) and the discretionary match to see if it meets the ACP safe harbor requirements. I don't really understand why. Basically I want to know if someone defers 5% and a plan does the basic safe harbor match formula but also wants to do a 100% of the first 4% discretionary match, would ACP testing have to be done or does it meet the ACP Safe Harbor Requirements?

I guess my question is do you apply the 6% rule (matching contributions may not be made with respect to elective deferrals in excess of 6% of comp) independently to the discretionary match, or do you have to combine the safe harbor and the discretionary together and then apply the 6% rule?

My company reached out to me letting me know they failed discrimination testing and, as a result, had to give me additional profit sharing contributions.  That makes sense, but they also said I am required to fund it out of pocket.  Normally, it would be up to the company to fund this, but I'm a partner at my company.  They've already funded it, but they are requesting a reimbursement.

Is this correct?  Am I required to fund this?  

Not sure if others have run across this recently, but have had a couple clients receiving letters acknowledging that the Comprehensive Premium Filing has been transmitted, but that their records indicate that a premium balance is owed.  In most recent case, we uploaded XML file 5/31/2018 and sent in paper check with voucher on the same date.  Letter is dated 6/10/2018, but when I look on Account History premium has been credited (with 5/31/2018 date, so can't actually tell when posted).  Have to waste time dealing with client's obvious concern that premium hasn't been received, when the PBGC system shows is all settled.  I can see sending this letter out if a month has transpired, but 10 days seems to be generating needless worry.

I have a client who has already filed their corporate tax return and is over the 404 limit.  I've never ran into this situation before but after doing further research, it appears as though they need to amend their corporate tax return as well as pay a 10% excise tax on the amount they went over by.  They are a calendar year plan so the plan year we are working on right now is 2017.  Unfortunately, all of the Profit Sharing contribution was deposited in 2017.  The part I'm getting hung up on is what happens with the overage.  Does it get applied to the 2018 plan year or does it have to be applied to 2017 since although it's over the 404 limit, it wouldn't be over the 415 limit?  If it has to be applied to 2017, can they still take the deduction in 2018 since they weren't able to for 2017?

I searched prior Q&As on this board but didn't find an answer.  I have a client with a top-heavy plan that has the 3% Safe Harbor QNEC.  The plan year and limitation year are the calendar year.  If the client properly terminates the plan mid-year in 2018 (e.g, plan passes ADP etc.), would the top heavy contribution be required on compensation accrued up until the date of the plan termination or compensation paid for the entire 2018 calendar year? 

We have several small DB plans here that have had balances from terminated DC plans rolled into them (prior to my time here).  The plans do have provisions to accept rollovers.  There does not appear to be any specific language regarding the eventual distribution of the rollover money, aside from an election to exclude it from amounts considered for purposes of small automatic cash-outs.  The rollover money has always been treated as an account balance unrelated to the DB calculations, and RMDs from the rollover have been based on the account balance method (correct according to a 2009 thread here).

I have two questions:

1) Absent any plan language about in-service withdrawals, may the participants access their rollover money without terminating, retiring, or receiving RMDs?

2) Is there any advantage to this over simply rolling the DC balance directly into an IRA?  I understand this might be desirable if someone wants to use their DC money to increase their annuity from a DB plan (assuming the DB plan provides for this), but I don’t see the advantage to attaching it to the DB plan if it’s just going to remain an account balance.

The client has an initial plan year of 9/1/2017 through 12/31/2017;  are the participant deferrals prorated at all.  Or if they defer $18,000 in the 4 months - are they ok since it's an annual limit per participant?

Thanks

Reg. 1.409(a)(9)-2 provides that minimum required distributions out of a qualified plan (e.g. 401(k)) must begin April 1 of the calendar year following the later of the calendar year in which the employee turns 70 1/2 or the calendar year in which the employee retires from employment with the employer.  The term "retirement" is not defined for purposes of 401(a)(9).  

If a law firm partner is still technically a partner in a firm, but doing hardly any work, is he considered "retired"? Or does retirement mean actual total termination of employment?

Client has provided employees with bonuses at year-end for many years.  While the plan document states that W2 compensation is eligible plan compensation, the client did not withhold employee deferrals from the bonus pays as they would with any normal payroll.  Instead, because employee feedback was that most employees did not want employee deferrals withheld, the client began communicating that employee deferrals would not be withheld unless the employee completed an election form specific to the bonus pay.  Each year, only about 3% of employees completed the election form. 

Would a QNEC be required for employees that did not have employee deferrals withheld from the bonus pay?  To your knowledge, how far back would the corrections need to go?

Thank you.

Client sponsored a 401k plan and terminated that plan a couple of years ago for various reasons.

All participants were properly fully vested and received a complete distribution - with the exception of one.

There is one remaining participant that still has plan assets in a brokerage account that have not yet been paid out.

Their business situation has changed and they would like to start a new plan.

However, even though this plan was terminated, it still exists and they continue to file Form 5500. 

What are their options?  If they finally get this participant paid out, typically they cannot start a new plan for at least 12 months.  Is there any possibility of reinstating the existing plan since it has not yet been fully paid out and a final Form 5500 has not yet been filed?

From my less than exhaustive research on this, it appears that it is required for a stand-alone HRA. If the HRA is integrated with the medical plan, then it is possible to have the health plan SBC cover the HRA as well, but if it doesn't, the HRA will need an SBC. And the SBC requirement doesn't extend to stand-alone "excepted benefits" plans such as dental or vision plans, and many FSA's (if they are HIPAA "excepted benefits").

Any disagreement? Any other comments welcome as always! Thanks.