There is a EE who was a non-union EE, he is now a union EE.  The plan excludes unions EE.  Can this EE take his money of of the plan  now because he is no longer eligible/excluded?

IF a participant's termination date is 12/31/17 but he is employed on that date , is his first calendar year for rmd 2017 or 2018? Seems like a simple answer but we have bot opinions in the office.  PPT is 70 1/2 in 2017

A 401k plan is written with a safe harbor match plan year calculation formula.  They fund the match per pay period and provide a true up after year end. 

They also fund lost earnings on the true up. I have never heard/seen this before. For example, if a participant is owed a true up, they fund it in September (for a calendar year end plan). They also calculate lost earnings from the last day of the plan year (12/31) to the date they fund the true up.

When asked why they fund lost earnings... "because this is the way we have always done it". They feel that since the match does not happen until September, they "owe" their employees the earnings. They feel that had the employee deferred evenly throughout the year, all their match would have been funded by 12/31.

Can lost earnings be funded on the true up? 

Thank you

Plan has immediate entry for deferrals.    A participant was hired on 9/17/2013.   (2/28 PYE).   Switched to 12/31 pye at 12/31/2014.   2% initial deferral, no increase.   

They have never included this employee, so have to make up for 2/28/2014, 12/31/2014, 12/31/2015, 12/31/2016, 12/31/2017 and January and February 2018. 

Is the missed Deferral, 2% or  do I use the ADP and give them 50% based on that?    

Never had this with automatic enrollment.   

Thanks

I have a loan out on my 401k.  In May I was out of work for two weeks and did not receive a paycheck.

So, one payroll deduction was missed of $ 93.61.   I received a letter from Wells Fargo regarding the missed payment and that if I did not bring the loan current the loan would default and then become a taxable distribution.  The letter stated I should call them, which I did.  The person who took my called stated they were unsure how I was to make a payment since this was a payroll deduction and they would call me back, if I had to do anything because is was a payroll deduction.  ( The person was not sure) I gave them my cell  number.

I received a 1099R so obviously the loan was deemed. I called 401 K and stated they were supposed to call and tell my how to correct the problem. They are telling me they call a office number at my work and left a detailed message on how to correct the matter????I did not  get that message.

They are telling me there  is noting that can be done once the loan is deemed. 

Can anything be done so I do not have to pay the tax on the loan????I am still making payment via payroll deductions.

Our client terminated their SIMPLE plan effective 12/31/17, and started a profit sharing plan on 1/1/18. They would like to make a contribution this week to the profit sharing plan for 2018, and they've already funded their 2017 SIMPLE.

Their fiscal year is 3/1 through 2/28. Are they able to deduct both the 2017 SIMPLE contributions and the 2018 profit sharing contribution on their 3/1/17 - 2/28/18 tax filings? They are two distinct plan years, but would be deducted in the same tax year.

Thanks for any insights -

This seems very important, so I'm reprinting it here -- it's a press release that was sent to me about ten minutes ago (Thursday, 3:10 p.m. ET):

BALTIMORE – February 22, 2018

Transamerica Expands Commitment to TPAs and Small Retirement Plan Market

Transamerica today announced that the services of a third party administrator specializing in retirement plans are required for new retirement plan business with less than $3 million in assets.

“Our experience is that smaller companies benefit significantly from the expertise of a third party administrator who can have deep conversations about their client’s business and goals,” said Joe Boan, senior vice president and executive director, individual and workplace distribution for Transamerica. “With this announcement, we are firmly stating that working with a retirement-focused third party administrator is a best practice for small retirement plans.”

Transamerica is demonstrating its commitment to third party administrators by raising the underwriting minimums for in-house administrative services. TPAs will have access to Transamerica’s streamlined retirement platform to help their clients.

“Transamerica values its alliance with third party administrators. We listen to TPAs’ needs and seek out their feedback about our retirement plan program, and we take action. We agree that small retirement plans benefit greatly from the direct guidance that retirement third party administrators offer,” said Boan. “We believe every company needs to have access to a quality retirement plan, and we are delighted for the opportunity to help more people pursue their financial goals for a secure retirement.”

There are many reasons small companies will want to consider using third party administrators for their retirement plans, including:

* flexible plan design support customized to meet the specific needs of both the business and their employees

* high levels of compliance and technical expertise on issues like loans and distributions

* enhanced consultative services

* the assumption of time-intensive responsibilities.

Transamerica believes that the future of financial wellness is the connection between wealth and health for a better quality of life. For decades, Transamerica has helped people pursue a lifetime of financial security. To learn more about Transamerica’s workplace solutions, please visit www.transamerica.com.

About Transamerica Retirement Solutions, LLC

Transamerica Retirement Solutions, LLC (Transamerica) is a leading provider of customized retirement plan solutions for mega- large-, mid-, and small-market organizations. Transamerica Retirement Solutions partners with financial advisors, third party administrators, and consultants to cover the entire spectrum of defined benefit and defined contribution plans, including: 401(k) and 403(b) (Traditional and Roth); 457; profit sharing; money purchase; cash balance; Taft-Hartley; multiple employer plans; nonqualified deferred compensation; and rollover and Roth IRAs. Transamerica Retirement Solutions helps more than 5.4 million retirement plan participants save for a lifetime of financial security. For more information, visit www.transamerica.com.


 

Can a governmental plan mandate that participants may only select a lump sum (in lieu of a month annuity) if the value of their accrued benefit does not exceed $5,000?  If so, can this be done without consent? 

Can we do an -11(g) amendment to change profit sharing allocation method from each in own group, to an integrated allocation with the allocation at 20% of the taxable wage base?

Like many people, I'm looking for methods to have these regulations not apply to normal 401(k) plans. Amending hundreds of plans (and attempting to explain this crap to clients) isn't high on my fun list. Sure, we can do a plan sponsor level amendment - and that's probably where we'll end up...

So I toss this out there for you attorneys. Suppose a pre-approved Plan document currently says that the determination will be made by a licensed physician. Doesn't specify who chooses the licensed physician. If the Plan Administrator institutes a written policy that the determination of Total and Permanent Disability is made by a licensed physician CHOSEN BY THE PARTICIPANT, (and also accepts a SSA determination or under the employer's LTD program) is this sufficient to remove discretion, so that an amendment isn't even necessary? (I'm not saying this is necessarily a good idea - in fact, might be a very bad idea if participants get names of licensed physicians who are "easy" and will certify practically anything.) Just trying to look at any angles. It is frustrating, because the real life application of all this is so limited and a denial situation so uncommon that it is a whole lot of time for, generally, nothing. Whoops, I guess that describes my life in the TPA world.

Is it just me or is this the most over-hyped "thing" in the last 5 to 10 years?  I can't have a conversation with a recordkeeper or advisor without someone blurting out "3(21) and 3(38)" (and usually having no idea what they are saying).

It seems that any real protection is from participant lawsuits - in the small plan market, that is simply not a threat.  Is the DOL going after anyone for having "bad" investments? 

And...I know these services are inexpensive or "free" but it seems to me that to the extent there are costs, they are borne by the participants, but trustees and advisors are the ones being protected.  How wrong is that?!

Company A sponsors Plan A; Company B sponsors Plan B. After Company B buys Company A, Plan A is frozen and merged into Plan B. Company A employees begin accruing new benefits under Plan B.

I'm being told that the Suspension of Benefits Notice that Company B provided is only good for the new benefits and not for the old benefits, but I can't figure out why. (I'm getting this second hand and haven't seen any plan documents or the notice yet).

Any thoughts?

I'm sure this topic has been beaten to death here, but this is an extreme case to ask how much flexibility do plan sponsors have with individual class based.   

Profit sharing only plan has the provision that each participant is in their own class for allocations.    Plan has immediate eligibility.   There are no compensation exclusions and no annual hours or last day condition.  The plan is not top heavy.

Client identifies the following who gets an allocations:

.  Owner employee (single HCE) maxes out

.  Owner identifies lowest paid individuals only statutory group and allocates just enough % of them to pass a4 including average benefits and gateway - yes, kind of like a bottom up qnec. Gateway is only given to these individuals.

.   A couple of those lower paid individuals were excluded because they didn't work at least 1,500 hours and employed on last day.

If individual class based has this much flexibility, why does any plan's profit sharing provision have an age/service, annual condition, compensation exclusions and employee class exclusions?  All you need is for the employer to fill out a formula questionnaire each year to instruct the plan administrator who gets an allocation and how much.    

We are helping a client search for a 403(b) Recordkeeping and Administration Services provider and they are interested in including companies that are MWBEs in their bidding process.  Is anyone aware of any MWBE companies that provide Recordkeeping and Administration Services for 403(b) Plans.

Our Retirement Plan transitioned recordkeepers at the beginning of 2016. We don't have that many, but from time to time we will get QDROs in that require data and/or earnings calculations from prior to 2016 and we'll have to request that from the prior recordkeeper.  For a while they were really good about providing the information relatively quickly.  Now it is taking upwards of 6 months to get anything out of them.  We have 3 QDROs currently pending that we are waiting for data from the prior recordkeeper that have been outstanding for more than 3 months.  Is there any recourse against this recordkeeper (other than what would have been stated in the original contract with the recordkeeper)? Obligations as a holder of data that is governed by ERISA?  I generally recommend new QDROs from incorporating provisions that need data from prior to 1/1/2016 to avoid this, but from time to time we'll get stale QDROs in (one participant waited 10 years to submit the QDRO to us). 

Suppose you have a company that sponsors a traditional DB plan and 401(k) plan with a December year end.

1. The DB terminated April 30, 2017 so no participant accrued a benefit for 2017.

2. The DB and 401(k) plans are top heavy as of 12/31/2016.

3. The plan documents indicate that a 5% top heavy minimum will be funded in the 401(k) plan instead of the 2% top heavy minimum in the DB plan.

Question: Since the DB plan terminated in 2017 without any participants receiving a benefit, can just a 3% top heavy minimum be funded in the 401(k) plan for 2017 or must the 5% be funded?

Thanks.

The prior TPA filed an anonymous VCP for the client. The IRS blessed the correction and invited the client to file it as a regular submission. With respect to the actual filing process, do we just file a regular VCP submission and we include as an attachment the IRS approval of the anonymous filing?

If your company has a tuition reimbursement plan, what is your lifetime max reimbursement?  We are currently doing $3,000 per year (undergrad) and $5,000 per year (grad level) up to a lifetime max of $20,000.  We are reviewing/revising this policy and I'm curious what everyone else does for the lifetime?

Just wondering what the rest of the world encounters in "real life" on this. Plan is set up to be a non-ERISA - deferral only plan. In order to avoid ERISA status, there are operational requirements in addition to the Plan provisions. So, the Plan/Administrator, upon receipt of the DRO, refers it to the Vendor, 'cause the Plan Administrator doesn't want to kick Plan into ERISA status by making a determination if it is a valid QDRO or not. The Vendor kicks it right back, and says, "I'm not going to make this determination."

A similar situation could occur with hardship withdrawals, for example.

How do you folks and/or your clients typically handle this? You are between a rock and a hard place...

in the other day's newsletter

https://www.spencerfane.com/publication/congress-eases-restrictions-hardship-withdrawals/

basically it says

can include earnings from deferrals

don't have to require ee to take loan first

don't have to suspend deferrals for 6 months

plan would have to be amended for these provisions, after 12/31/2018. entirely optional, not required to amend.