Many court decisions about a theft from an employee-benefit plan include an order that a wrongdoer is barred from serving as a fiduciary of an employee-benefit plan.  But how (if at all) is such an order practically enforced?

Am I right in guessing a TPA might not spot a problem?  Leaving aside a 3(16) TPA, an ordinary service provider might not be a fiduciary, and might have no duty or obligation to guard against an ineligible person's service.  And if a TPA runs a check on its new customer, would the TPA's check spot this problem?

If a Form 5500 annual report includes an ineligible person's name as a signer or authorizer, does anything in EBSA's error-checking or post-filing review catch a problem?

Are cash balance participants required to receive an interest credit after their NRA?  If they do not, do we have to give the participant a suspension of benefits notice?   This is not a question of what the plan says.  It is question of what the plan must say.  

The owner of the company in a non-resident and has a E-1 visa.  Can he serve as trustee.  Doing  research it looks like he can but you have to have a second trustee that is a US citizen.  Is that correct.  

If we miss an increase in deferral, we put in a QNEC for the missed deferral plus a QNEC for earnings.  My question is about calculating the earnings.  We have always used the DOL Calculator.  Is this what everyone else does?

Are there any times when actual investment returns are required?

How about if the market drops?  Are we allowed to put in zero earnings if the actual investment return was negative?

HI folks,

Need some help from the experts.

I had two employers last year in 2017 and mistakingly overcontributed around $5200 in employee contributions across two distinct unrelated 401k plans. My second employer originally told me that I could not remove the excess from their unmatched account, so I removed it from my previous employer's 401k.  In doing so, I lost out on an identical match from my old employer.

My current employer now tells me that I may, in fact, be able to remove the excess from my unmatched supplemental retirement plan.

Is there any way to reverse a distribution of excess contributions from my previous employer? The distribution to me occurred about a week ago and I still have not cashed the check. Is this an allowable transaction? If so, I'd like to undo it and take the funds from my current employer's unmatched plan.

Thoughts?

Thanks in advance.

SR

Sole Prop, sponsor of SH Match 401k Plan, makes 401k and match contributions to himself during year.

Turns out he has loss for the year.

I feel pretty comfortable refunding the 401k to him as a 415 violation but what about the match. 

Can that be refunded also or should it be reallocated?  (Causing TH SH exemption to be voided and then requiring a TH minimum to a number of employees .)

Thank you for any comments

Prior trustee probably committed prohibited transaction but not all facts are in so there is small chance he did not. Has either the IRS or DOL published any guidance as to when prohibited transactions must be reported.

I am the beneficiary of my late husband's defined pension annuity.  The pension began as an early retirement pension but was converted to a disability pension when he received the SS award letter.  When the pension first started, we elected the 50% husband and wife. Nearly three years later, the plan sent new elections forms.  We  changed the form of payment to 120 certain payments.  The plan is denying my claim for the remaining twenty payments saying they are using the earlier annuity starting date, not the date nearly  3 years later. That was not explained in any of the election notices or correspondence.

Also, he had reached normal retirement age when he passed by three months.

My husband divorce in NYS in 2000. We married in 2005. Ex wife filed QDRO 3 months prior to our marriage in 2005. My husband retired 2012. She began receiving her portion of the QDRO benefit when my husband retired in 2012. She is on SSD also. We found out she remarried on 3/24/18. Is she still able to receive QDRO, SSD and be remarried? We are struggling????

I have client who provides supported services to people in need in California.  Part of the employees hours are billed to the company and part of the employees hours are billed to the government program IHSS.  The government pays the employee directly.  Does the client have to include the government billed hours into the 1,000 hour eligibility calculation?  Lastly, I don't know if this makes a difference but it is a for-profit company.  For the life of me I cannot find anything online that provides guidance and if anyone knows the answer I will be eternally grateful!!!  

Sole Proprietor age 72 has $0 in account on 12/31/2017.

Schedule C is prepared and he will now, 3/30/2018, make a $17,000 401k contribution.  That will be the total contribution.

Is that amount considered a plan asset on 12/31/17 causing an RMD requirement for 2018?  (or can he just rollover the entire amount.)

Thank you 

Good Morning -

Can someone please walk me through how to properly correct the following situation:

Small plan - less than 100 participants determined they were incorrectly reporting loan failures.  The loan would default due to the participant separating from service and the sponsor would offset the loan once there was a distribution of the account.  Sometimes it was in the current year and sometimes it was 5 years down the road.  There are several participants who terminated employment several years ago and they are trying to properly tax report on these loans.  My understanding is you can self-correct on those loans that are within the three-year statute of limitations by reporting on a 1099-R in the year of the failure.  Those that are beyond the statute of limitations would need to go under VCP to request 1099-R reporting in the current tax year (those within the statute of limitations could also be reported in the current year as well with IRS approval).  Is this correct?  Now for the real question - I know one can self correct by the end of the second plan year on these loans failures whether an significant or insignificant failure.  My understanding is a determination needs to be made outside this two year window as to whether this is significant or insignificant, correct?  I think I am unsure because the loan corrections under EPCRS are not intuitive to me (but what is).  

Just ran across an interesting situation.

Employer missed withholding a deferral here and there on several employees. They understand they have to make full missed match plus earnings. However, their correction on the missed deferral piece has been as follows:

They have simply withheld the missed deferral at a later date (anywhere from next paycheck to several months later).

I think in "real life" this is acceptable IF the employee does a separate written election to permit it. However, I don't think it is acceptable to do it 6 months later without a written election. Don't know if they have even gotten VERBAL approval, but apparently no one has ever complained.

How do y'all see this situation handled (if you ever do see this correction method) when the correction falls outside the "normal" SCP corrections? Just curious.

A client missed starting an employee's deferrals and discovered the error less than 3 months later. The plan has a match. I understand that, being 3 months or less, no QNEC is needed but what about the match. Does anything need to be done about the missed match?

Client has integrated final pay plan that they plan to freeze at end of current year. However, they would also like to credit all active participants as of that time with an additional year of service. So if someone has 20.667 years of credited service (they use elapsed time), they would be bumped up to 21.667. Plan satisfies coverage and integrated formula is 401(l) compliant (1% /.5% at $4800).  Does giving everyone an additional YOS mess up my integration and force me to general test, or am I still safe harbor because everyone gets it? Any other potential traps for concern? 

We know you can exclude pre-participation compensation from the safe harbor contribution.  What about post-participation compensation where the employee moves in the same plan year to a position that is not an eligible employee?

For example, an employee is hired in a non-union position, enters the plan in 2018, and then later in 2018 moves to a union position that is not eligible for the safe harbor.  Can the compensation paid to the employee after the employee moves to the union position be excluded? 

To phrase the more question more precisely (since everyone is going to ask what the plan says), can the plan provide for such an exclusion (assume all the notice requirements and other requirements of safe harbor are met).  I read the regs to say the comp. can be excluded, but I have just never seen this before.  

Not sure if this is the correct forum for this question, but...

Owner only 401(k), assets under $250k, has not filed 5500s.

Owner in the process of divorce, anticipating a QDRO.

If the plan doc allows the ex-spouse to establish an account in the plan and leave the funds in the plan, would I be correct that the plan is no longer a solo 401k and would require a 5500?

What if the ex-spouse does distribute the funds, but it takes 30 or 60 days to do so.  Does that period of time require that a 5500 be filed?

Thanks.

Do we all agree that based on IRS Notice 2016-16, I can amend the Plan to exclude certain items of compensation?

I will send out an SMM at least 30 days in advance, but because the definition of comp is not required safe harbor notice content I probably don't even need to do that.

Agreed?

I have an ERISA 403(b) plan client who has asked for help filing Form 8955-SSA, and they are subject to the electronic filing requirement for this return (must submit via the FIRE system). 

I know how to prepare this form but it is not one of my normal services through my consulting business so I do not have the software to create a properly formatted file that I could then submit via FIRE.  I can't seem to find any software to create the file that isn't part of a large (costly) subscription or package.

Is it possible to create a file without such software?  I found the parameters provided on the IRS website, and it seems difficult.

Calendar year client.  Let's say profit sharing contribution for 2017 is $190,000 which they will deposit to the Plan in 2018.  Similar deposit to be made for the 2018 plan year.

Issue is that while they want to make the actual deposit of $190,000 for 2017, they do NOT want to deduct on the 2017 corporate tax return, but rather deduct the 2017 and 2018 on the 2018 return.  They did put the 2017 corporate return on extension, so the thinking of they made it within the ordinary time but filed the return before depositing doesn't work.  What are the issues here (would combined 2017 and 2018 amounts be subject to the 2018 404 25% limit solely on 2018 compensation for example).