New 401(k) established 10/1/17 with a 1/1/17 effective date.  Plan includes Safe Harbor 3% provisions as well as a discretionary ACP safe harbor contribution and a discretionary PSP contribution.  Of course, two owners were able to defer the maximum $24,000 before year-end.  The rest of the 6 staffers were able to accumulate about $2,000 each in deferrals before year end.  Is it too aggressive to allocate a stacked ACP safe harbor match limited to 4% of pay using full-year compensation?

Client allows ees to accrue up to 6 weeks of vacation, but then does not allow them to accrue any more.

They do not want to allow people to get any cash in there paycheck for the unused vacation time, but want people to be able to make an election to "close out" their accrued vacation in exchange for  a contribution to the Plan.

Since 401(k) is CASH or deferred, and they have no option of cash, my conclusion is that they cannot count it as 401k.  The only thing that gives me pause is I suppose they could just not work, and at that point would be getting the cash, but that does not seem to cut it.

Could thye have an employer contribution to accomplish this?  I don;t think there would be a good way to fit this into my plan document (standard prototype). Even though I have everyone in their group on this plan, something about this tells me that there should be more provisions around it.

Has anyone seen anything like this before?

Just met with a client.  There are 4 companies 100% owned by one individual and his spouse. So this is clearly a controlled group.  Since a Simple IRA can only be adopted by one employer (there is no way for a participating employer to sign on), I suppose the only answer here is for each of the 4 companies to set up their own Simple IRAs. 

I was told by an ERISA attorney at one time that a Simple plan is meant to be just that - simple.  and so there is no such thing as a second participating employer.  But separate Simples should work.  

We are a TPA firm and work with k plans.  I assume some of the record keepers will handle SImple IRAs such as American Funds RKD, Hancock, etc?

Comments?

Thanks

An employee is stating the recent legislation (Bipartison Budget Act of 2018) allows the participant to request a hardship for elementary and high school education expenses.  Am I correct that we are still waiting for IRS guidance on the Bipartison Budget Act of 2018, it's not effective until 2019, and plan amendments would need to be put in place to make the applicable changes?

Assuming the DB/DC combo plan has no any type of safe harbor contribution and the only contributions are employee deferrals and group based profit sharing.

It appears the client volume submitter plan doc. doesn't have any gateway language.

How do you handle the DB/DC combo plan gateway when the DC plan has 1,000 hours requirement if terminated before the end of the plan year?

We submitted a determination letter request for a defined benefit plan with a normal retirement age of considerably less than 62. 

The IRS is asking for statistical data to verify the NRA of less than 62 is acceptable for the industry standard. The plan is a one person plan for a professional athlete with endorsement deals. 

Can anyone point me to what kind of information and sources of information the IRS is willing to accept? 

Are there other threads that have already covered this question?

What are the consequences of blowing the 180-day Title IV deadline for distributing plan assets?  Facts are: one participant left, she's not lost, no extension of the deadline requested.  Civil penalties against plan sponsor/administrator?  Can the PBGC "undo" the termination in some fashion that will have adverse tax consequences to the other participants?    

So, Corporation A and B form a controlled group. "A" is the sponsor of a plan, and "B" is a Participating Employer.  For purposes of this question, let us assume that "A has an EIN of "1" and "B has an EIN of "2."

We just found out that someone purchased "A" several months ago, SUPPOSEDLY in an asset purchase. The information is a bit sketchy at this point, as the new owners of the assets of "A" will apparently keep the same business name, but change the EIN to another number. I don't know enough about corporate transactions to know if this is possible - in other words, can I purchase the assets of "A" and those "assets" include the right to continue doing business under the same name, but just under another (new) EIN?

If so, then it appears that "A" and "B" are now, in fact, still a controlled group, as "A" still exists under EIN #1 and the ownership technically hasn't really changed? And that the asset purchase/issue of new EIN now creates a new entity, "C" which must now choose either to adopt the assets and liabilities of the former "A" plan, or establish an entirely new plan?

I'm finding this very confusing when determining how to handle the plan issues. All of the employees of "A" are now part of "C" if in fact there is a new entity "C." Whether "C" will continue with a plan is unknown. But "B" wants to continue to sponsor the plan as is, with no involvement with "A" or "C." This works fine if there is no controlled group, as if there isn't, it is just a Multiple Employer Plan at this time, and can withdraw or spinoff or whatever under normal procedures.

I'd love to hear nay thoughts on this. Getting solid data from the client in this situation is like pulling hen's teeth, so I'd rather have a better understanding of the corporate issues before using the vise-grips. Thanks! 

Any reason why you can't have employees of the same entity in two different fully insured health plans? I don't see why not, but can't seem to find any authority on this either way.

Thanks.

Client asked for withdrawal liability estimates for a number of years preceding withdrawal from multi-employer pension plan.  The plan used the same rate to calculate liabilities (including estimates of withdrawal liability) and minimum funding for years prior to withdrawal.  Upon withdrawal, the discount rate used to calculate the liabilities was changed from 7% to the PBGC rate and the liability skyrocketed.  The rate for funding purposes stayed at 7%.  The plan has had similar funding ratios, etc. for several years and there are no obvious signs as to why such a large discount rate change is warranted. 

We would like to talk to an actuary experienced in calculating withdrawal liability who can assess the reasonableness of the assumptions employed. 

All references greatly appreciated!  

New Employer and new 401(k) Plan for 2017. All NHCE's and HCE's are considered otherwise excludable. Testing software shows the ADP of the otherwise excludable NHCE's as "N/A" and the HCE's as 1.50%. The software says the Plan has passed the ADP - but it just does not look right (maybe it's just me).

Any comments would be appreciated.

Someone in my office claims to have filed a top hat filing for our top hat plan, but she has no record of it.  Is there someplace online I can go to look up the filing?  I tried FreeERISA, but the top hat filings seem to be only available if you have a "deluxe" paid subscription.

We did a top hat filing when we established our first top hat plan.  The regulations state, "Only one statement need be filed for each employer maintaining one or more of the plans described in paragraph (d) of this section."  Based on that language, it appears we do not have to do any additional top hat filings when we establish new top hat plans.  Normally we do anyway as best practice, but in this case we didn't and we've already missed the 120 day window to file.  Does it make sense to do a late top hat filing?  Would that just raise a red flag?  Or is it better to just rely on the language from the regulations and take the position that no top hat filings are required for the later-adopted plans?

On 10/18/17, I received my ERPA renewal letter from the IRS. It says it was issued on 10/1/17 and expires 9/30/20. To the left of that same page, it says, under CE Requirements: "Annual CE Cycle: January through December".

I know that the requirements are 72 hours with a min of 16 per year and 2 of ethics per year. What constitutes each of the three years?

Is it 1/1/17-12/31/17, 1/1/18-12/31/18 and 1/1/19-12/31/19?

Is it 1/1/18-12/31/18, 1/1/19-12/31/19 and 1/1/20-12/31/20? 

Is it 10/1/17-9/30/18, 10/1/18-9/30/19 and 10/1/19-9/30/20?

I think it should be the first but it is very confusing. Any thoughts?

I wondered if anyone ran into the following scenario. An employer enrolled in a Trust Benefit Plan and as a result is a participating employer. The trust declined to file the Form 5500 (reasons unknown) and the participating employer is concerned of being out of compliance. Since the Trust's Plan Administrator refused to file the 5500, the participating employer will file a 5500 for just its employees/enrolled participants. The Participating Employer plans to file as a single employer. The question though is - Would this be the correct path? The assumption is that the 5500 could not be listed under a trust since the Participating Employer is not connected directly to the financials and no knowledge of the Plan Assets. Your thoughts? Your help is greatly appreciated (by the way, the DOL has been asked via voicemail; currently there is no response.

An accountant has asked that we review a DB that has been in existence since the late '80s and "hard" frozen since the mid-90s.

Plan subject to PBGC.  PBGC filings as well as 5500s with Schedule B/SB filed each year.

The owner died, leaving his wife and two adult sons to run the company, who want "absolutely nothing to do with this plan". Apparently, this is a "C" corp with the spouse as the 100% owner, the sons as officers.

Granted, the plan should have been formally terminated at that time, I do not know why it wasn't.

The way we understand the situation, client told the TPA just "to keep the plan going", not to terminate, and the client would not make any contribution if it could be avoided.

Plan has been kept going by the owner and two adult sons waiving their benefits such that the normal cost each year would be "0".

Accountant asked we look into terminating the plan after all this time.

Any thoughts??

Participant wishes to suspend her contributions for a few months, not a complete stoppage of contribution.  She has not taken a hardship distribution.

Plan allows for quarterly changes.

I assume there needs to be a deferral change form to lower her % to 0% as per plan provisions for a change.

She would have to wait until the next quarter to resume contribution with a new change form to bring her % back?

If so, if she wishes to resume contributing sooner, the plan must be amended on a prospective basis, to allow more frequent election changes?

Anybody have experience with an IRS audit of a cafeteria plan for compliance with section 125 non-discrimination testing?

Doesn't seem to be something IRS has much interest in.

Thanks

After enactment of the ACA much has been written about the DOL 's supposed focus on investigating health plans for ACA, HIPPA and other compliance and there has been anecdotal evidence of a few investigations but is it really a DOL priority?

Anybody have experience with any such investigations and if so what DOL Regional Office?

Thanks

I’m sitting for the CPC exam this June. How similar is the exam to the practice tests? I have passed all of the modules and it seems like the study guide has the same information from the modules. If I just focus on the practice exams will I do well? Thanks in advance!