We are looking at a larger Church plan (300+ employees) that elects not to be subject to ERISA.  There are several HCEs.  They have followed mainly vanilla plan provisions but are looking to make some changes starting in 2019.  Do these changes sound permissible?

For individuals hired 1/1/19 or later, they want to have a 3 year cliff vesting schedule apply annually to that year's contribution.  So that if you are eligible to receive an ER contribution for 2019 plan year and have 1 YOS in 2019, you do not vest in that contribution until 2021. If eligible for contribution in 2020, you do not vest until 2022, and so on.  Since this is non-ERISA, that seems to be acceptable for this type of plan.

However, because it might be messy for the recordkeeper to track money in this manner, the ER was not going to deposit the money into the plan until they actually vest in it.  The ER would keep those contributions in a non-plan ER account.  So, from the above example, for those affected individuals, their 2019 ER contribution would be deposited into their accounts in 2021, 2020 ER contributions deposited in 2022....  If someone from 2019 leaves in 2020, their contributions never vested so that year's $$$ can stay with the ER or go to another year's contribution.

Writing the language in the plan document would be a challenge, but assuming that can be done, is this allowed?  Are there any 410(b)-type tests that have to be done since there are HCEs?  Its not subject to ERISA so maybe not?

Any comments are really appreciates.  

I have a plan that allocates a discretionary match on top of the SH match.  Max up to 4% of pay.

Last year, we had one owner deferring and no staff deferring.  No problem.

This year we have the owner and another HCE who is deferring.  Can I structure my discretionary formula to be: 

Owner and staff 100% deferrals up to 4% of pay; non-owner HCEs 0% 

What is the definition of Emergency Medical Service Personnel for puposes of the age 50 exception for Public Safety Employees?

Clearly it includes first responders, e.g. ambulance drivers, paramedics, etc...

What about dedicated emgerency room personnel or hospital staff performing EMS as part of their job description?

My client has a DB plan that is over-funded in the sense that the assets exceed the plan termination liabilities.  The owner at the company is at her 415 limit.  The financial advisor on the case has suggested a 401h account.  His thought is that excess assets could be transferred to a 401h account in the plan.  I am completely unfamiliar with this.  Do any of you have any familiarity with  this, or know of a good resource on this topic?

Thanks!

We include a listing of the new employees who are participants in the COBRA, FSA and HRA plans when we send them our invoices.  I would like to know if the names of the employees are PHI and if we should send our bill via a secure mode of communication?

I read in one article that it was possible to add an EACA mid-year, but you would only be eligible for the 90 day withdrawal benefit, and not the 6 month penalty free ADP correction period.

That is fine with me, but everyone else seems to say (and really preamble to regs was pretty on point) that you can;t add an EACA mid-year.  Which is really stupid.

Follow-up: Anyway, let's say hypothetically I can't be an EACA for year 1.  So  now what, I have to be an ACA for 6 or 9 months, and then I can switch to an EACA, right?

I've got a plan that's been frozen "forever" - the plan sponsor was taken over by a multinational corporation long after the plan was frozen.  Everyone's been terminated since the late 1980s, I believe.

The plan has no lump sum feature, and payouts (commercial annuities purchased from trust assets) start at NRA of age 65.  Or, early retirement (.5% reduction per month) starting at 55.

At this point the last 5 folks are all in their late 50s / early 60s and could elect to begin payments if they want.

Unless the plan sponsor elects to terminate the plan sooner, they could potentially keep the plan open until the last person turns 65 in a few years.

If they wait, what's the typical reaction of the PBGC when you file to terminate a plan with 0 participants left?  Will they want to see X number of previous payments to participants not connected to the plan termination?  Or are they more likely to figure with no participants or assets, and the final premium payment in good order, that their file would quickly and easily be closed with the plan just going away after the final 5500?

Thanks....

A profit sharing plan sponsor has appx 2.5 million in their personal accounts and the couple are in their mid-80's.  They will take a hit with estate/inheritance taxes if the funds were ever distributed.  They are wanting to establish a trust and make it the contingent beneficiary.  I am of the opinion this is permissible, but want to be aware of pitfalls, if any, such a designation would result in. Has anyone had experience naming a charitable trust as a beneficiary?

As far as I can see, as of now -- Monday Nov 19, 2:45 eastern -- the IRS has still not yet released the October 2018 segment rates for minimum present value (lump sum) calculations.

In the past, it has tended to post each month's rates by the 15th of the following month, or earlier. I don't track every updates, but I can't recall their being this late before

Has the IRS changed when the rates are released? Or are they out there, but I'm just not seeing them?

Was thinking of trying something new.  How can I change my avatar?  I didn't see anything in the settings.

Our NQ plan allows participants to take a lump sum distribution or elect a 10-year payout at a Normal Retirement age of 59.5 Our industry competitors seem to have a Normal Retirement Age of 55  in their NQ plans.  We're considering lowering the age but are  concerned about complying with 409A. Does it make any sense to consider lowering the age or is there too much risk of 409A violations?

I feel like I must be overlooking a prior discussion around this topic but was not able to locate one in my search.

Plan has highly comped individual that switched jobs earlier this year. He made significant  401(k) elective deferrals at last job before coming to new job.  He enrolled in new plan and has been deferring to new plan for several months now.  Last week, he realized he is well over the elective deferral limit for 2018 and is seeking correction from the plan.  Since this has been discovered in 2018, the record keeper is proposing to correct through negative contributions within the next payroll runs.   Sounds like that is fairly routine (been awhile since I've had one discovered in the same year as the deferral) but am curious as to what sort of paperwork / documentation all this generates.  Also, still trying to get our arms around potential earnings in the account but assume if he has earnings on the excess that will have to come out too?  How does that happen with negative contributions?

I think I understand this, but I'd love any input, 'cause maybe I've got it wrong.

Plan has premium conversion account, and an FSA. Plan document, and plan forms/administration appear to be at odds.

My understanding is this: No premiums can be paid through the FSA. Premiums for group health insurance offered by the employer, or individual policy premiums for "excepted benefits" such as dental or vision, can be paid through the premium conversion account. However, premiums for individual "health" insurance may NOT be paid pre-tax through the cafeteria plan.

First, is that right? The document appears to support this interpretation, yet the forms/administration have been allowing pre-tax treatment through the cafeteria plan for individually purchased HEALTH insurance, as long as it isn't purchased through a federal or state exchange. I believe this is incorrect?

Thanks!

Is a money purchase plan sponsored by a governemnt/government agency subject to the same spousal waiver rules applicable to private money purchase plans?  i.e., must the spouse consent to non-annuity payment of benefits?

Form 5500-EZ wants to continue mailing in paper forms. Owner says he mailed it in on 7/31/18, it was not extended.

He has received a $250 penalty letter for being late (10 days) and cannot find or remember if he mailed it certified.

Question: He did extend his Federal taxes. Seeing as he cannot show evidence of mailing it in timely, can he amend as filing under extension to remove the tax penalty?

Incidentally I find it odd that if he mailed it in 7/31 as said, that the IRS would mark it 10 days late.

One person plan, never hired anyone, no intention to hire anyone, so he is the only participant in his plan. He would like to take out his first loan. I recommended interest rate of prime as reasonable. He wants to know if he can take the loan with zero interest. Is that possible? If not, I've never used a rate below prime, is there something, ie prime-1?

To allow a convenience in collecting the assets of a small estate, some States’ laws permit an affidavit in which one claims she is entitled to the decedent’s property.  Under a typical law of this kind, one might collect up to $50,000 without any court-supervised proceeding.

If a participant dies with no surviving spouse and no other designated beneficiary, some retirement plans provide that the participant’s estate is the “default” beneficiary.

If a plan you administer or serve is in this situation, is the plan willing to pay a taker based on a small-estate affidavit?

If a plan is willing, does the administrator use any extra steps to manage the risk that an affidavit is false (or even innocently incorrect), leaving the plan exposed to claims of the estate’s beneficiaries or heirs?

Or does a plan refuse to pay on a small-estate affidavit?

BenefitsLink people, what are your experiences?

Question,

it is my understanding you can withdraw from a 401k penalty free at 55 if you retire from your job during the year you turn 55.

question, my wife left her job when she was 53, however she will receive bi-weekly severance up until the year she turns 55, her 401k funds are still with the same plan, will she be able to collect penalty free in the year she turns 55?

any help would be appreciated!

Safe harbor match per payroll.  Plan excludes bonuses and vacation pay.  Plan is projected to fail 414(s) test for 2018.

I believe we have to amend plan to include some of the excluded pay.  Question is:  can we amend to include excluded comp for SOME of the employees, not all, under the 11(g) provisions.

Any other ideas?  Thanks!

I have been asked to propose a 401(k) Plan for a business (LLC) that covers a family (father, mother, and child) group. The owner wants to set up the plan solely for the benefit of his daughter, who is an employee of the company and receives compensation that will be reported on a W-2. He and his wife do not anticipate utilizing the plan for themselves.

My question is that if this plan is set up, does the plan file a Form 5500-EZ or the SF Form? The Form 5500-EZ is "Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan. Would the EZ apply because the daughter is an owner by attribution? Or, since she is not an actual owner or their spouse, is the 5500-SF the form to file?

Thanks for any replies.