Our firm is managing the investments and the administration for a client where each participant has individual brokerage accounts. We process def, match, and ps into each of their individual brokerage accounts. For those who have client's that aren't at traditional record keepers, is it recommended to have individual accounts for each money source? 

I was married to a DC law enforcement officer for 24 years - married in 1992, before we were divorced in 2016.  He has since passed in 2023 and I found out after his death that he had retired in early 2000.  We had been separated before our final divorce.  I did not waive my rights to benefits but was denied spousal benefits from the DC Retirement Board.  Can I seek an investigation into my ex-husband’s retirement package to determine if there was fraudulent activity that has prevented me from being the primary beneficiary?

Participant in a non-governmental 457(b) plan incurred a severance from employment and elected to defer distribution of his account (as allowed under the plan document).  the participant was subsequently rehired a few weeks later and continued his participation in the plan.  When the deferred distribution date arrived (2 years later) the recordkeeper failed to segregate the participant's contributions and distributed his entire account, including deferrals made after he was rehired.  Participant is still employed.  Was the participant entitled to receive the distribution of his account attributable to deferrals in his first period of employment (because he did have a severance from employment and elected a deferred distribution date)?  If so, can we treat the distribution of the deferrals made during his subsequent re-employment an "overpayment" and use the correction method for overpayments in EPCRS to correct (knowing that 457(b) plans are not included in EPCRS)?  Any thoughts?

We're being asked to takeover and merge 3 separate plans.  Entity A purchased entities B&C during 2023.  Entity A participates in a PEO 401k Plan.  Entities B & C each maintain their own safe harbor 401k, with different safe harbor formulas.  Entity A's plan is also SH.  We are told it was a stock purchase (B&C are LLCs) and nothing has been done with these plans until now to bring them together.  They have been maintained and each have separate TPAs.  Since they are all owned by the same owner now we intend to merge the plans effective 1/1/26 sponsored by Entity A and with entities B&C as participating sponsors.  Am i missing anything?  Any reason this can't be done?  We're waiting until 2026 because of the issues that would be involved with a mid-year change to safe harbor plans.

As of this morning, it appears HHS has removed nearly all of the Section 1557 subregulatory guidance (FAQs and Fact Sheets). Entries still appear in search results on the HHS website (as of noon-ish on Feb. 5), but the content itself is gone.  (Also see the link here to OCR's Section 1557 section -- it's broken.)

Archived copies should generally be available at web.archive.org (although I didn't check for each and every missing page), but it does appear that the current guidance/enforcement may be changing.

Section 401(k)(4)(A) allows providing a “de minimis financial incentive (not paid for with plan assets)” for a participant’s choice to elect deferrals.

BenefitsLink neighbors, have you seen anyone do this?

What was the incentive?

Who paid for the incentive—the employer? Or a service provider?

Did the incentive result in the behavior the payer wanted?

Did the payer find it received good value for the payer’s money?

Bundled 401(k) service provider wants to attract rollover contribution dollars.  Accordingly, the provider wants to offer a promotional program where a participant will not be charged an asset-based fee for 6 months on any rollover contributions made to their 401(k) plan.  At the end of the 6-month period, the participant will be charged an asset-based fee on the rollover contribution account that is equal to the asset-based fee for all other accounts in the plan for all other participants.

In addition to providing administrative services, depending on the plan, the bundled provider offers: (a) directed trustee services; (b) 3(21) or 3(38) services; (c) online participant managed account services; and (d) discretionary trustee services for pooled accounts.

Other potentially relevant facts:

• Proper and timely service provider and participant fee disclosures will be made.
• This offer will apply to all participants in a given plan regardless of the participant’s existing account balance and regardless of the amount of the rollover contribution.
• Marketing materials will not be deemed to be providing investment advice (or any other fiduciary services beyond what is already offered in the plan).
• Participant education services -- but not investment advice -- will be provided to participants in connection with this 6-month promotional offer.

Any issues?  Benefits, rights and features issues?  Prohibited transaction issues?  Any action the trustee should take to minimize any DOL/IRS risk?

Any thoughts would be greatly appreciated.  Thanks.

A participant made ineligible deferrals in 2024.

There is no mandatory withholding on the excess deferrals using code "8". However, can the participant choose to have taxes withheld?

Thank you.

Hi,

Thank you as always for all the insights.

A DB plan that has a shortfall shown on the SB, was efiled, however, the attachment for the shortfall amortization was not attached to the filing. The rests of the attachments were properly attached. It shows up on the e fast that the forms were received. However, on the filing system a error message shows, since it is missing this attachment. 

1. Must this filing be amended and then refile and include this attachment?

2. The original filing was filed under the special extension until Feb 3rd 2025 (extended past 10/15/24). If it needs to be amended, should the amended box and special extension box both be checked off or just the amended box. Or to be safe just check both boxes?

Thank you!

I know I've seen a thread discussing this before but I'm having trouble locating it.  A non-owner employee works for a company that sponsors a 401(k) plan to which she defers regularly, sometimes the maximum amount, and receives employer contributions.  She also owns her own company and is considering adopting a 401(k) plan for it.  If I recall correctly, she would be able to defer the full 402(g) limit as well as contribute the maximum 415(c) limit to her own plan even though she's deferring and being allocated profit sharing amounts in her employer's plan - is this accurate?

This seems obvious to me, but I want to be sure that I'm on good footing here (or at least as much as possible).

S/E participants have their compensation determined after the end of the year, but they need to make a deferral election by the end of the year.  It seems to me that if they are in a plan that is subject to mandatory automatic enrollment, then if they don't complete a deferral election of some kind by 12/31/xx, then they are subject to the automatic enrollment percentage and that is they only deferral they can do for the year.  This is mostly true for a new partner who joins the plan - when they first become eligible, they may not necessarily need to complete a deferral election form as soon as they become eligible (though it would be smart if they did), but definitely something should be in place before the end of the year.

If they choose to defer during the year, then obviously it must be pursuant to a written election form, and therefore they are out of the mandatory automatic enrollment rules.  So that's fine.

All the usual caveats about evergreen elections vs. ones that are specific to the current plan year and wording them to allow the maximum each year, etc. apply.

Hmmm.  If a deferral election form says "I want to defer $X for 2025", what about 2026?  Is there no deferral election, and therefore they are teetering on being subject to the mandatory rules again (until they make a new election)?

Thanks.

With the new self-certification rules, are there penalties for approving a hardship that is later determined to not be a hardship? Assuming the TPA/Plan Sponsor has no reason to suspect the request doesn't qualify for hardship.

It is my understanding that the old rules required the employer to re-deposit the ineligible hardship.

A client funds the basic safe harbor match.  The plan is top heavy.  If they want to provide PS to select employees who are not key and not HCEs, would that trigger the top heavy 3% for those non-key who are not receiving the safe harbor match?  Seems it would. But seems an unintended top heavy consequence.

Thank you,

Tom

We are filing delinquent Form 5500 for 2003.  The instructions state that you can attach Schedule P to start the statute of limitations.  Is there any benefit to attaching the Schedule P for those early years?  What has everyone else been doing?  Thanks.

Plan will be increasing match but i wasn't sure if there is a 30 day notice requirement for the SMM.

Hello,

This is Not my first issue with my company but only asking about the newest screw up they did. So, my employer changes pay roll companies almost every other year, same with medical benefits and 401k plan companies. Thank God I am 64 years old and won't have to deal with much longer. I have been with them this Feb 7th 47 years this week. Here is my problem. 401k company 2023 I had a loan for around $24,000 and then after last paycheck in 2024 employer moved to new company. So have had an issue kind of like mine but mine is worse. You see my money from 2023 401k was moved finally. But my loan wasn't moved. So now I have spent hours on the phone with both 401k 2023 and 2025. Since I am in black out on 401k plan now I can Not view anything. I can now view my 401k plan 2025 and it shows no loan what so ever, I have called 401k 2025 and they say they see nothing about a loan. Before I go on my direct boss also has a loan same 401k company and all of his 401k money and loan balance was moved. I know what your saying contact your direct HR person and ask. I called her, emailed her 3 times and finally after sending a read receipt she replies Hang Tight Kevin. I have been alone all week, other person out of office. Will let me know soon.   well today is last day of black out. O yes and for the last 3 pay periods it says on my check that $220.12 was removed to pay my loan. So now this is 3 pay periods. So just over $660 of my hard earned money was removed from my check and no one knows where it is. Besides that I get paid again this Friday and I am sure the $220 will be removed again. Lucky for me and since I have been dealing with stupid people with I have learned to take notes and names and emails.  It is not the fact this Friday  my wages are missing $880 it is the fact that 401k company 2025 has said I could be found in default. A 20% penalty, Well, not this time HR. I might be leaving earlier than I thought, Any ideas on how I can get some help? I have all phone calls and emails and notes for this problem. I am so glad that the stupidness didn't start until about 19 years ago.

thank you

Kevin T

I have a participant who has a legit hardship.  His wife has become disabled.  The medical and credit card bills are getting out of hand because his state is dragging their feet with any state benefits.  Simple question... just want to be sure... it's just like any other distribution, correct?  Taxes need to be withheld (20%).   The 1099-R will be coded properly and if there is no exception he will pay the excise tax when he does his personal taxes.  

Am I correct?  Missing anything? 

Thanks

Hi

Joe owns XYZ Real Estate 100% (corporation) and has a DB/DC plan - no employees. He gets a w-2.

Joe forms another entity with Moe (no relationship to Joe) 50/50 ownership, ABC Real Estate. The income is thru commissions. This is an LLC taxed as partnership.

Neither partner gets a k-1 showing any earned income. 

Joe's commissions earnings from ABC RE, LLC are paid to his company XYZ RE and this income is the major source of income XYZ RE.

No CG issues, how about ASG?

Thanks

I have a question about Controlled Group relationship.

Company A is owned 100% by Owner A. Company A has a Safe Harbor 401(k) Plan and a few employees.

Company B is owned 50% by Owner A and 50% by Owner A's spouse. There are no other employees in Company B and no 401(k) Plan.

Would Company A and B be part of a Controlled Group? To me, it seems like they would be due to attribution. So, Owner A owns 100% of Company A and 100% of Company B (50% on her own and 50% by attribution). In this case, would we need to know Owner A's compensation from Company B as well as the spouse's compensation from Company B and test the aggregate compensation from both companies in Company A's 401(k) Plan? The spouse would also be eligible to contribute to Company's A's 401(k) Plan, correct?

Thank you.

About EBSA’s Field Assistance Bulletin No. 2025-01 (Jan. 14, 2025), many have remarked that it might be incongruous to use a turnover to a State’s abandoned-property administration instead of a rollover to an Individual Retirement Account.

But what about an amount that’s not rollover-eligible because it’s the § 401(a)(9)-required distribution?

Example: Mary severed from employment in 2016, and has made no communication to her individual-account retirement plan since. All of Mary’s account is non-Roth. In 2024, Mary reached age 73. Mary has not requested any distribution. If nothing changes before April 1, 2025, the plan provides an involuntary distribution of Mary’s § 401(a)(9)-required minimum. Following Mary’s December 31, 2024 account balance, assume her to-be-paid § 401(a)(9)-required minimum distribution is $900. The plan mails a check for that amount to Mary’s address of record. The plan gets no bounce-back or other notice about the address, and the plan’s use of LexisNexis and other tools confirms that the address of record still is Mary’s address. After seven months, Mary has neither deposited nor presented the check. The plan administrator’s repeated efforts to communicate with Mary got no response.

Is it a given that the minimum-distribution amount cannot be put in an IRA?

After a suitable noncommunication period, might the plan’s administrator turn over the April 1, 2025 payment amount to the relevant State’s abandoned-property administration?

Or might the plan’s administrator do something else?