I've answered my own question - I was overthinking it.

Plan has a last day requirement for employer contributions.  If an employee is on furlough should that employee be treated as terminated for purposes of contribution accrual?

Thanks of any guidance.

A client's employee has submitted a hardship withdrawal request. (plan does allow hardship withdrawals for safe harbor reasons) The employee/participant attached some medical bills, a notice of collection on a student loan for his son , and an estimate to install a new seer heat pump at his residence.  He lives in Portland, TN.  I assume the only allowable amounts are the medical bills not paid by insurance.  I just want to know what you think about the student loan  (approx $11,000)....   I don't think the heat pump would qualify...not a casualty loss or disaster area.  Am I missing something?  Input appreciated...

Are they waiting until after the mid-terms or something??

Did the Tax Cuts and Jobs Act, in and of itself, affect Dependent Care calculations?

I found the following table for 2018. Does anyone know if it changes for 2019?

Has there been any news about the possibility of new Form 5500s with major updates for the 2019 plan year? Federal Register article

We have a PSP wherein the employer has not made a contribution since 2013, has the investment broker send duplicate statements for one account, but there are several.  I will not belabor this point here, as that is not my question.

I know what a partial plan termination is, but as of when is this determined? From 2-3 years from the last contribution, which would make all participants 100% vested?

Which would mean anyone receiving a distribution from, let's say 2015 forward must be 100% vested?

For 2018, the account is telling us he will be making a contribution, which obviously would include any individual with a W-2 who is still "in" the plan plus any individual meeting eligibility of 21/12/1,000 hours.

anyone on here for RIA's that also administer retirement plans?  I would like to discuss how you deal with distributions from plans in light of the new SEC custody rule. 

the following passed the House (as part of the Family Savings Act)

basically, no more notice needed if 3% safe harbor. why o why can't this be effect now so I wouldn't have to worry about notices this month!!!!!!!!)

plan can be amended anytime during the year

plan can be amended after the end of the year (before deadline for refunds) if increased to 4%

SEC. 102. RULES RELATING TO ELECTION OF SAFE HARBOR 401(k) STATUS.

(a) LIMITATION OF ANNUAL SAFE HARBOR NOTICE TO MATCHING CONTRIBUTION PLANS.—

(1) IN GENERAL.—Section 401(k)(12)(A) of the  Internal Revenue Code of 1986 is amended by striking ‘‘if such arrangement’’ and all that follows and inserting ‘‘if such arrangement—

(i) meets the contribution requirements of subparagraph (B) and the notice requirements of subparagraph (D), or

(ii) meets the contribution requirements of subparagraph (C)(2) AUTOMATIC CONTRIBUTION ARRANGEMENTS.—Section 401(k)(13)(B) of such Code is amended by striking ‘‘means’’ and all that follows and inserting ‘‘means a cash or deferred arrangement—

(i) which is described in subparagraph (D)(i)(I) and meets the applicable requirements of subparagraphs (C) through (E), or

(ii) which is described in subparagraph (D)(i)(II) and meets the applicable requirements of subparagraphs (C) and (D).

(b) NONELECTIVE CONTRIBUTIONS.—

Section 20 401(k)(12) of such Code is amended by redesignating sub21 paragraph (F) as subparagraph (G), and by inserting

after subparagraph (E) the following new subparagraph:

(F) TIMING OF PLAN AMENDMENT FOR EMPLOYER MAKING NONELECTIVE CONTRIBUTIONS.—

(i) IN GENERAL.—Except as provided in clause (ii), a plan may be amended after the beginning of a plan year to provide that the requirements of subparagraph (C) shall apply to the arrangement for the plan year, but only if the amendment is adopted—

(I) at any time before the 30^th day before the close of the plan year, or

(II) at any time before the last day under paragraph (8)(A) for distributing excess contributions for the plan year.

(ii) EXCEPTION WHERE PLAN PROVIDED FOR MATCHING CONTRIBUTIONS.—

Clause (i) shall not apply to any plan year if the plan provided at any time during the plan year that the requirements of subparagraph (B) or paragraph (13)(D)(i)(I) applied to the plan year.

(iii) 4-PERCENT CONTRIBUTION REQUIREMENT.—Clause (i)(II) shall not apply to an arrangement unless the amount of the contributions described in subparagraph (C) which the employer is required to make under the arrangement for the plan year with respect to any employee is an amount equal to at least 4 percent of the employee’s compensation.’’.

(c) AUTOMATIC CONTRIBUTION ARRANGEMENTS.—

Section 401(k)(13) of such Code is amended by adding at the end the following:

(F) TIMING OF PLAN AMENDMENT FOR  EMPLOYER MAKING NONELECTIVE CONTRIBUTIONS.—

(i) IN GENERAL.—Except as provided in clause (ii), a plan may be amended after the beginning of a plan year to provide that the requirements of subparagraph (D)(i)(II) shall apply to the arrangement for the plan year, but only if the amendment is adopted—

(I) at any time before the 30^th  day before the close of the plan year, or

(II) at any time before the last day under paragraph (8)(A) for distributing excess contributions for the plan year.

(ii) EXCEPTION WHERE PLAN PROVIDED FOR MATCHING CONTRIBUTIONS.—

Clause (i) shall not apply to any plan year if the plan provided at any time during the plan year that the requirements of subparagraph (D)(i)(I) or paragraph (12)(B) applied to the plan year.

(iii) 4-PERCENT CONTRIBUTION REQUIREMENT.—Clause (i)(II) shall not apply to an arrangement unless the amount of the contributions described in subparagraph (D)(i)(II) which the employer is required to make under the arrangement for the plan year with respect to any employee is an amount equal to at least 4 percent of the employee’s compensation.’’.

(d) EFFECTIVE DATE.—The amendments made by this section shall apply to plan years beginning after December 31, 2018.

DESCRIPTION OF H.R. 6757, THE “FAMILY SAVINGS ACT OF 2018”

Delay in adopting provisions for nonelective 401(k) safe harbor

Under the proposal, unless a plan provided at any time during the plan year that 401(k) safe harbor matching contributions applied to the plan year, a plan can be amended to become a nonelective 401(k) safe harbor plan for a plan year (that is, amended to provide the required nonelective contributions and thereby satisfy the safe harbor requirements) at any time before the 30th day before the close of the plan year.

Further, unless a plan provided at any time during the plan year that 401(k) safe harbor matching contributions applied to the plan year, the proposal allows a plan to be amended after the 30th day before the close of the plan year to become a nonelective contribution 401(k) safe harbor plan for the plan year if (1) the plan is amended to provide for a nonelective contribution of at least four percent of compensation (rather than at least three percent) for all eligible employees for that plan year and (2) the plan is amended no later than the last day for distributing excess contributions for the plan year, that is, by the close of following plan year

Nevertheless, the Family Savings Act’s prospects in the Senate remain very uncertain.

Section 3(40)(A) of ERISA provides that the term “multiple employer welfare arrangement’’ (MEWA) does not include an employee welfare benefit plan that is established or maintained under or pursuant to one or more agreements that the Secretary of Labor (the Secretary) finds to be collective bargaining agreements ("CBA").

For purposes of section 3(40) , an employee welfare benefit plan is “established or maintained under or pursuant to one or more agreements which the Secretary finds to be collective bargaining agreements” for any plan year in which the plan meets a certain requirements. One of the requirements is (generally speaking) that at least 85% of the participants in the plan are Individuals employed under one or more CBAs. 

My question - There is no explanation in the regulation or the preamble that states when during the year this 85% test should be conducted (i.e. first day, last day, etc.) . Does anyone have any guidance they can point me to or an opinion they don't mind sharing on this issue? 

Thank you.

Hi,

A participant is deferring 6% of pay and receiving the 4% safe harbor match. His match suddenly dropped down to 2% then to 0%. Upon questioning the payroll rep, I was told that it was because the participant reached the annual safe harbor compensation limit. 

So his match was capped at $8250.00 even though he had not reached the $275,000.00 limit yet. I have never heard of this.

Is this correct?

Thank you!

Prospective client started SIMPLE IRA in early 2018, but wants to start a 401(k) plan for 2019.

The problem we are faced with is the 2 year rule for distributions from the SIMPLE.  

Can they start the 401(k) for 2019, cease contributions to the SIMPLE as of 12/31/2018, and just not terminate it until the 2 year clock has run on the contributions to the SIMPLE?  

Any idea when they coming out? Have been holding up the open enrollment process waiting for the new "official" rates.

Nowhere near 20 employees, but they would like to ELECT to be covered by, or provide, COBRA benefits. Can they do this?

The standard distribution fee from the plan is 75.00.  If a participant is "forced out", however, the fee is 125.00.  The forceouts are always the amounts that are less than 1,000.  The original theory behind the additional fee was that there is additional work involved in setting up the rollover IRA.  For amounts, however, that are not rolled to an IRA, i am concerned that this fee could be looked at as discriminatory since it essentially is only going to be applied to NHCEs.  Any input is appreciated.  Thank you.

I am meeting with an employer about starting a 401k plan.  Details are sketchy but for now, I was told that its a husband and wife who own the business.  However, the wife (who I am told is very much involved with the business) receives 1099 pay from the company.  No W-2,  no other compensation from the plan.  

(1) I've never seen this arrangement before; is this acceptable?

(2) So the spouse has no company wages and would not benefit in a new company 401k plan.  But could the wife have her own plan, based on 1099 pay?  If so, controlled group issues come into plan. But she needs to have a business to have a 401k plan.  Which she does.  But is paid via 1099 from it.

Any thoughts are appreciated.  I will find out more shortly but this seems kind of odd.

Thanks 

New owner only plan effective 1/1/2017.  Owner reaches age 70 1/2 in 2017.  Vesting is 6-year graded and vesting prior to effective date of plan is excluded.  As of 12/31/2018, the owner would be 20% vested.  When would the first RMD need to be distributed? 

Since we deal with mostly small plans, our actuary uses the 12/31/2017 accrued benefit x 12 to get to what the RMD lump sum requirement is for 12/31/2018 rather than monthly installments.  I'm getting hung up on the fact that although the owner is 0% vested as of 12/31/2017, he is 20% vested as of 12/31/2018.  Would a distribution be required for 12/31/2018 or not until 12/31/2019?  The argument from our actuary is that since the calculation is done based on the prior year accrued benefit, the first distribution wouldn't be required until 12/31/2019.

HI,

An one participant owner only DB plan wants to terminate and roll the assets to an IRA . I recall an old post where it was mentioned that since the plan is terminating and rolling the assets to an IRA the first RMD would be allowed to use the DC method. I this indeed allowable and what if for the current year he needs to take two RMDs (as the first was deferred) can he take both RMDs based on the DC Method and then roll the remaining assets to an IRA?  Thank YOU.

Is there a reasonable time frame you can allow for a plan sponsor to pay out a lump sum after a temporary window has expired? Let’s say someone claims their packet was lost and they had to resend, does a sponsor have to honor the payment, say within 30 days, 60 days, etc?