ok - so I'm having an issue and while I thought it would/should be an easy question, Relius support has not yet gotten back to me....

As I'm running administration on plans for 2017, the system is not calculating the Normal and/or early retirement dates when I run eligibility.  I've never had this issue before.  I doubled checked the Plan Specs with regard to the Retirement information and all seems to be in order.  Oddly even the dates for existing employees (who were not previously eligibile in the prior year) are "wiping out" to 0 when eligibility is run!  The retirement dates ARE in there for those who were and remain participants.

Any ideas appreciated!

(I originally posted this topic in the VEBA message board, but was not able to get much input.  I'm hoping someone will see it here, and provide advice/guidance)

I have a WRAP document that lists the following plans in Exhibit A as being part of the WRAP:

• Group Health Plan - A
• Group Health Plan - B
• Group Health Plan - C
• Group Dental Plan
• Group Basic Life Plan
• Group Voluntary Life Plan
• Group AD&D Plan
• Group LTD Plan 

This is a large plan (10,000+ participants).  The Group Health Plans are funded through a VEBA trust.  This results in the plan needing to file Schedule H and have an IQPA audit the plan.  The other plans (Dental, Life, etc.) do not flow through the VEBA (but they are part of the WRAP).  The employee portion of the premium is withheld and remitted to the applicable insurance companies as would be done in a fully insured plan.

As far back as I can see (10+ years), the Form 5500 Schedule H and the auditor's financial statements have only reported assets and activity related to the VEBA trust.  My understanding is that they audit the plan as a whole, but the financials only cover the Trust.  The question has come up this year as to whether or not that is the correct way to prepare the Schedule H and Financials.  Should the other plans be included too?  I do not believe it would affect the "balance sheet" portion of the Schedule H because the fully-insured benefits would have a net-zero affect, but it would affect the "income statement".

Any help or advice is greatly appreciated. 

This is a husband and wife plan. The husband is an adopting employer. They’re getting a divorce that will be effective November 2018. The client would like to begin setting up a separate plan for her husband. Can he adopt  a plan’s in the same year in which he is already an adopting employer of an existing plan? Or would it best to make the new one effect 1/1/2019?

I have a WRAP document that lists the following plans in Exhibit A as being part of the WRAP:

• Group Health Plan - A
• Group Health Plan - B
• Group Health Plan - C
• Group Dental Plan
• Group Basic Life Plan
• Group Voluntary Life Plan
• Group AD&D Plan
• Group LTD Plan 

This is a large plan (10,000+ participants).  The Group Health Plans are funded through a VEBA trust.  This results in the plan needing to file Schedule H and have an IQPA audit the plan.  The other plans (Dental, Life, etc.) do not flow through the VEBA (but they are part of the WRAP).  The employee portion of the premium is withheld and remitted to the applicable insurance companies as would be done in a fully insured plan.

As far back as I can see (10+ years), the Form 5500 Schedule H and the auditor's financial statements have only reported assets and activity related to the VEBA trust.  My understanding is that they audit the plan as a whole, but the financials only cover the Trust.  The question has come up this year as to whether or not that is the correct way to prepare the Schedule H and Financials.  Should the other plans be included too?  I do not believe it would affect the "balance sheet" portion of the Schedule H because the fully-insured benefits would have a net-zero affect, but it would potentially affect the "income statement".

Any help or advice is greatly appreciated. 

Employer has a policy whereby tipped employees pay health insurance premiums by check (because income fluctuates and they may or may not have enough to deduct from one pay period to the next).  Employer has a Section 125 plan. Can a tipped employee's wages and tax withholdings be adjusted so that the impact on the employee is the same as if the premium were deducted from pay pre-tax? 

The answer is a clear No, right?  I don't think it's a 125 issue as much as a tax withholding/reporting issue. The employer must accurately report all wages paid and the premium amount is wages paid - even if the employee writes a check back to the employer for premiums. Correct?  

Are federal work study students considered "employees" and eligible to join the 401(k) Plan?  The document does not specifically exclude this group.

These individuals while they are working for the employer are "students" and are not eligible for any benefits offered by the employer.  I am trying to locate some regulation/guideline that provides these individual are not considered employees for purposes of the plan.

Thank you.

Hello,

We have several health and welfare plans that are unfunded - benefits paid solely from general assets with the exception of employee contributions. We have one attorney that declares that a SAR is not required because of Technical Release 92-01 - EE contributions if paid to the carrier within 3 months they are not plan assets. We have another attorney who disagrees and says that even with Tech. Release 92-01 the SAR is required because it is not funded 100% from general assets. I have not heard back from the DOL's Office of Regulations and Interpretations. Any thoughts if a SAR should or should not be issued? Many thanks for your consideration.

I left a company in September 2017.  Their practice was to pay Safe Harbor non-elective payments to 401k plans the year after service.  I contacted them recently to find out when the contribution would be made to my 401k plan for my 2017 service and they told me that no further contributions were expected to be made into the account. So essentially I received no contribution for my 2017 service.  My question is, what recourse do I have in this situation?  I checked my SPD and the only verbiage I could find on the payment is the following:

"Your Employer will make Safe Harbor Nonelective Employer Contributions to all eligible Participants who are Non-Highly Compensated Employees if you were eligible to participate in the Plan during the Plan Year.

These contributions satisfy certain Internal Revenue Code requirements and eliminate the need for the Plan to perform certain non-discrimination annual tests. You will be 100% vested in these contributions when made. These contributions may be distributed under the same circumstances which allow your Deferral Contributions to be distributed (i.e., death, disability, separation from service, and termination of the Plan without the establishment of a successor plan) but you may not request a hardship withdrawal of these contributions. In addition, prior to the beginning of each Plan Year for which this election to make Safe Harbor Nonelective Employer Contributions continues to apply, the Plan Administrator will provide written notice to you describing your rights and obligations under the Plan and informing you that the Plan may be amended during the Plan Year to provide that the Employer has elected to make a Safe Harbor Nonelective Contribution of at least 3% to the Plan for the Plan Year."

What are annual requirements necessary to qualify for Safe Harbor Nonelective contributions?  I would think service through September should be sufficient.  Is it a % of the year worked, something else?

TIA for any help.

Let's say a participant contributed over the 402(g) limit in 2017 to the plan and the error wasn't discovered until after April 15? How would this issue be corrected?

My understanding is that if the participant exceeded the limit at just one company, that means that the plan is at risk of disqualification and the excess needs to be distributed even if the participant is not terminated. Is that correct? Also, I read that the 10% penalty would apply as well as the 20% Federal tax rate. How would that be coded? Still code "8"?

Thanks.

Complete brain freeze here...

The calendar-year safe harbor plan has a 12-month elapsed time eligibility to defer, and the owners hired their daughter in August 2017... who deferred $5K in 2017 (and more in 2018 so far, of course).  We got the 2017 annual data yesterday.

Going "by the book", what's the right ordered solution here; what is violated "first"?  My first thought is that she violated her 'personal 415 limit' and that it has to be distributed to her and is taxed in the year of distribution, but that seems way too easy.  Also, I'm remembering something about double-taxation under 402(g)...?

Thanks.

We have a plan that was part of a controlled group.  As of 6/28 it was spun off and is now a stand-alone plan.  How do we do testing for 2018?  Do we have to do half the year as controlled group, half as a stand-alone?  Or can we just test based on how everything sits as of 12/31/18?  Does anyone know a section of the code or regs that deal with this issue?

Thank you in advance.

If a Top Heavy Plan has only deferrals, safe harbor matching contributions, and prevailing wage contributions, does it lose it's free pass?

I know that it gets a pass if only deferrals and the safe-harbor contributions are made, but does the prevailing wage contributions blow that up or is there another exception for those contributions?

Now, what happens if the eligibility for prevailing wage is immediate and the other contributions are 21 & 1 YOS? Usually that would blow it up too, but again I don't know if there is an exception for prevailing wage contributions. 

Thanks in advance!! 

Plan year runs 1/1/17- 12/31/17. HRA is terminated 4/30/17. Must a Form 720 be done? Are fees based on the period 1/1/17-4/30/17?

I have a 401k plan that is asking if they can merge into the plan of another employer.  There has been no transaction between the 2 companies.  They are still separate ongoing entities.  The employees in my 401k plan have all had their employment terminated with the plan sponsor.  All of these employees were hired by another company and now the 2 companies are asking if the plans can be merged.  

the language in the document doesn't specify that a merger may only take place as a result of an acquisition.  What about the participants that terminated?  If we are allowed to merge, do they have to be offered an opportunity to take distributions since their terminations occurred before any merger?

Thank you 

Detail:  Traditional 401(k) plan that's been in effect since 2006.  For the first year, the plan was filed using the correct EIN.  The following year (and each year since) the plan was filed using an incorrect EIN (off by one number).  They even received a delinquent filing notice from the IRS back in 2007 due to the incorrect EIN situation.

What would be the correction here?  Would the plan need to:

1)  Amend all 5500s back to 2007?  If yes, how would the 2017 filing be handled?  Would they need to indicate a "change" in Q. 4 on the Form 5500, indicating a change in the name and/or EIN of the plan sponsor?  (4 If the name and/or EIN of the plan sponsor or the plan name has changed since the last return/report filed for this plan, enter the plan sponsor’s name, EIN, the plan name and the plan number from the last return/report:)

2)  Just indicate the "change" in Q. 4 and move forward, not amending any past filings?

3)  Any reason to use DFVCP in this situation?

Any other thoughts/suggestions would be greatly appreciated!!

Profit sharing only plan (cross test), sole prop with 3 participants all receiving contribution of $11,000k (their total comp is $220,000). Owner's Schedule C line 31 is $265,000 before employee contribution. I come up with 1/2 se tax $11,287, so net comp of $242,712 before owner contribution reduction.

Could the owner do a maximum $54k or is the maximum around $48,540? I seem to be getting the 25% deductible limit of participating compensation and owners 20% deductible limit which goes on their personal 1040 crossed up right now. Thanks in advance.

403(b) plan amended, effective 7/1/2018, to add involuntary cash-out provision of distributions of amounts between $1,000 and $5,000, to be rolled over over to an IRA.  Would this provision only apply to participants that terminate on or after 7/1/2018, or could it also apply to participants that terminated prior to 7/1/2018?

The Plan Sponsor called me about making a distribution for a deceased participant.  Her boyfriend, who is listed on her DOB as the primary beneficiary, has been arrested and charged with her murder.  He is in custody awaiting his trial.  The deceased participant's family is asking about getting a distribution to help with funeral expenses.   .  I do know there are secondary beneficiaries, but I don't know who they are at this point.  Common sense would tell me that no distribution should be made until the boyfriend is either proven guilty or non-guilty.   If guilty, surely he would forfeit his right to the funds??  However,  I am not a lawyer, so would love to hear from any of you who have dealt with a similar situation.  

We have applied for QSLOB status.  Unfortunately, we were unable to pass the gateway test with respect to matching contributions.  Our service provider told us that we can make corrective contributions to Non-HCEs to make us pass the test.  We have been told the corrective contributions need to be made by October 15.  I know October 15 is the date the QSLOB filing is due, but I can't find any support that corrective contributions to pass the QSLOB gateway test have to be made by October 15.  Does anyone know where that date comes from?

I was thinking years ago there was a process that a Plan could do to eliminate the QJSA provisions (joint and survivor annuity) when the monies sources do not require it.  I searched over the weekend and came up blank.  Can someone help me with a cite?  Or am I dreaming.

thanks in advance