The sponsor of a governmental 457(b) plan would like to reduce the number of investment vendors/providers from 5 to 3.  They would like to stop all new contributions going to 2 of the vendors, but allow participants to keep any existing assets invested with these 2 vendors.  Is there anything preventing them from taking this approach? 

One of our current plans is asking about the possibility of adding a Cash Balance to their existing Safe Harbor 401(k)/Profit Sharing Plan.  They are a medical practice with 115 participants.   10 Doctors and 105 non highly's.  They currently have a SH Match with a Profit Sharing in place to maximize the Doctors allocation. 

They are wondering if it would be possible to add in a Cash Balance plan for the Doctors as they wish to put away a higher annual contribution.    I do not have much experience with CB plans so i am wondering if this is possible?  And if so how many of the NHCE's would need to be included in the CB?  

Also of note, they may be merging with a group of 4-5 other medical practices a couple of years down the road possibly becoming a controlled group.  The other practices have plans in place however I don't know if any of them are CB plans.  I know that they all have 401k plans in place but i don't know if any of them have CB plans as well.  What type of issues if any could arise in this situation?

Participant was a non-owner, born 5/6/47, still working when he died on 1/27/18.  ERISA outline books seem to treat the situation as death before the RBD.

Participant had no prior distributions; especially no annuities, so still a death before RBD.  ERISA books and plan document requires either the 5-yr. rule or life expectancy rule be satisfied.  

The two beneficiaries are non-spouses.  One is electing to take their half in a distribution.  The other leaving theirs in the plan.  The ERISA book examples do not address multiple beneficiaries electing both options.  Only mention of multiple beneficiaries is if they both take the life expectancy, the oldest beneficiary age in the year following participant's death is used to determine the life expectancy.

I looked at the Q&A reg. 1.401(a)(9)-3 Death before RBD:  employee dying before the RBD, thus before distributions are treated as having begun under 401(a)(9), distribution of the entire interest must be made in accordance with one of the methods listed in 401(a)(9)(B)(ii): the 5-year rule or the life expectancy rule.  I am unsure if the language of one method means multiple beneficiaries may take only one option or the other.

PLEASE HELP... And, if my analysis seems wrong at any stage, please correct me.

Employer has SIMPLE IRA with the 3% match. The 3 owners have maxed out their contributions in July. The match is made each pay period. The question is should the 3 owners continue getting the 3% match even though their contributions have maxed out? I realize that the match is made on the whole year's compensation but what if their own contributions ended up being less than 3% when their total year's compensation is used.

Should the employer wait to true-up at year-end? Or is it like a 401k plan where if the match is made each payroll period, it stops when the contribution stops and no true up is needed.

Client's plan uses W-2 definition of compensation and permits separate deferral election on bonuses.  Match is 100% of deferrals up to 3% of compensation and is payroll based; no year end true up.

If someone elects 10% deferral from regular paycheck but 0% deferral from separate bonus check is any match calculated with respect to the bonus amount?

Example: $10,000 salary check with 12% deferral and $1,000 bonus check with 0% deferral.  Deferral is $1,200.  Is match based on compensation of $10,000 ($300) or $11,000 ($330)?  Is the answer different depending on whether bonus check is paid on same day as salary check or on a different day? 

Thanks in advance.

I am divorced and our QMCSO requires my ex/children's father to provide health insurance.  He does, through his wife-she carries our children (her stepchildren) on her employer's health plan.  Her employer's health plan is self-insured/self-funded.

My ex is a federal employee.  Public Law 106-394 requires him to either enroll the children under his FEHB coverage or provide documentation that he has other health coverage for the children, which he does through his wife (the children's stepmother). The children are not enrolled in FEHB or any other plan-the stepmother's plan is their only health insurance coverage.

I would like to be listed as an alternate payee for benefits for my kids on her employer policy.  Does ERISA give me that right? I think it does but stepmother's employer says it doesn't because the kids are not her dependents and QMCSO doesn't require her to carry the children on the plan.

Thanks for your help with this.

I have a plan that had a missed deferral opportunity for a rehire and made the correction and lost earnings. On the Sch H of the 5500, it does not seem as I should put it as a late deposit b/c it was not withheld and then not submitted. But just wondering how others are reporting. Thanks in advance.

The division of child support wants essentially the participant's entire account for back child support, and there is not enough left in his account to gross up to account for the 10% voluntary withholding that applies under 3405(b). Under 3405(b), 10% is the default (because this is not rollover eligible) but the participant is permitted by that statute to elect anywhere from 0% to 100% withholding. This does not do much to help the division of child support get the exact amount that they want. 

It seems that this only works if a QDRO may also order the participant to elect no withholding on this distribution so that the plan may pay the full amount "net" of (0%) withholding. 

But I cannot find any guidance or even examples of this being ordered. I figure it must be possible or else child support QDROs have a sort of intractable issue. Has anyone ever encountered this or seen any guidance on whether a QDRO can order a taxpayer to elect not to withhold taxes?

We have three senior executives that are part-time and don't work enough hours to be eligible for the GHP. Two are actually on Medicare. We would like to somehow help pay for the health insurance or medigap coverage they have obtained elsewhere. We realize that direct reimbursement creates an employer payment plan that runs afoul of the ACA. Any ideas? It is my understanding we could increase their taxable wages to help them pay for these individual insurance policies and/or medigap coverage, but that we can't require that the funds be used for that purpose. However, we would want to determine the amount of the increase by doing some research on how much this alternative insurance is costing and base the compensation adjustment on our findings. Would that pass muster?

A 457(b) governmental plan operates under an AXA plan document.  There is an unusual provision in the AXA base plan document.  

“Mandatory Employee Contributions. Notwithstanding section 4.09(a) above, if the Employer has elected Mandatory Employee Contributions in the Adoption Agreement, such contributions shall automatically be deducted from the Employee’s Compensation at the rate or dollar amount indicated in the Adoption Agreement and shall be treated as an after-tax Employee Contribution. If so indicated such Mandatory Contribution shall be to the Plan and be treated as a contribution that satisfies section 3121(b)(7)(F) of the Code. It is the Employer’s responsibility to determine whether this Plan will meet the requirements to be a social security replacement plan.”

 I have no problem with the Mandatory Employee Contributions, but 457(b) plans cannot accept after-tax contributions, with the exception of Roth contributions.  This plan does permit Roth contributions, but the aforementioned provision is very explicit in its reference to after-tax, not Roth contributions.

 What do you think?

An employer currently charges its employees 25% of the health premiums, and pays the other 75%.  Going forward, the employer wants to charge any new incoming employees 50% for health premiums, but have the existing employees continue paying the 25%.  That would result in the existing employees getting 75% of premiums as employer contribution, while new employees would only be getting 50%.  

Is this permissible?  Or is it discrimination?

employees of medical group will form LLC with plan assets which will purchase property and lease it to medical group. LLC will be open to all employees/doctors/participants.  My initial thought is it is a PT because the owners of the medical practice are  benefiting from the use of plan assets to lease property to their practice. however i am trying to pin down the legal basis and whether there are partnership interest thresholds that they might be able to stay below to avoid the PT. any thoughts? 

Investment advisor is telling a client that he can do a direct transfer of his 401k RMD to charity as a qualified charitable distribution.  I thought it was only for IRA's.  I could not find anything allowing from 401k plans.  Did something change for 2018?  If so where can I find the regulations allowing it?

Does anyone on here have any clue where I can find an attorney who can practice in Tennessee who specializes in Fiduciary Responsibility breaches in Non- ERISA 457 Deferred Compensation Plans? I have seen people and attorneys all over the internet on many websites giving advice about this and how certain things are able to be fought in court. HOWEVER, I have been contacting attorney after attorney for the last 2-3 years (at least 50), even the one's giving that advice, and either can't get them to talk to me, they won't return my calls, or they take all of my case information and then I never hear back from them. I have been charged by the state bar association for lawyer referrals only to have those referrals tell me they don't handle those types of cases and don't know why I was referred to them. How can violations of fiduciary responsibility be illegal if no attorney will even take a case involving them? I have talked to attorneys who have referred me to their friends and their friends respond that they don't handle those types of cases. I have been referred to securities attorneys, employment attorneys, retirement plan attorneys, ERISA attorneys- and NONE of them will contact me back. If anyone has any idea of an actual attorney who handles these types of cases, I would really appreciate the contact information. I am tired of talking to attorneys and telling them my story, only to be ignored. Thank you in advance for any assistance. 

Is anyone else having difficulties, receiving Schedule C data (direct and/or indirect compensation) from American Funds? If so, how did you resolve?

Hello,

Have a solo 401k plan being set up.  Owner would like to take his contribution and invest in a land/property investment that his son is involved in.  I know this type of situation is a little tricky so any guidance would be greatly appreciated.  Thank you.

Plan has immediate eligiblity for 401k but a 1 year wait for the match.

As an example, Employee A was rehired after being gone for just a year and was eligible for the match prior to leaving. The client thought that they had re-satisfy the match eligibility so they did not provide them with the match as they should have.  They did provide them with the ability to make 401k contributions.

So clearly someone who made 401k contributions would need to receive the match because they were eligible.  But what about those who did not contribute?  The employees were told they needed to resatisfy the  1 year wait for the match, and it is therefore conceivable that they decided not to participate based on their understanding that they were not eligible for the match yet anyway.

Should we assume they had some contriubtions and provide them with a missed match correction? 

An accountant we deal with forwarded his client's P&L for 2017, there are 2 partners.

Would not each of the partners' contribution be based on net ordinary income plus guaranteed payments?

Client executed an in-plan conversion of employer PS account to a designated ROTH account on December 30, 2014. QDRO now authorizes 1/2 of that designated ROTH account to go to ex-spouse. Ex-spouse has never owned a ROTH IRA. Ex-spouse now elects a direct rollover from the plan to a newly-established ROTH IRA. Client and ex-spouse are both age 70, so the 10% penalty is not a concern. The only concern is whether all earnings (and the earnings are substantial since 2014) are tax-free or not.

Question #1: How does the 5-year holding period apply to ROTH IRA assets that originate from a transfer that would have been non-qualified if it had not been a direct rollover from the plan to the ROTH IRA?

Question #2: Suppose that the direct rollover does not occur until January 2, 2019. How does the 5-year holding period apply to ROTH IRA assets that originate from a transfer that would have been qualified if it had not been a direct rollover from the plan to the ROTH IRA?

I have a client who was the sponsor of a VS 401k plan.  They elected to to join a MEP available through their HR services company.  The original 401k plan was amended to suspend all contributions effective 4/30/2018 and the adoption of the MEP was effective 5/1/2018.  The MEP was setup to mirror the existing plan (basic 401k subject to ADP); to the employees it was essentially only a change in where their assets are being invested.  All participant accounts will be merged from the old investments to the new.  

With regards to compliance testing, we're getting push back from the  MEP administrator RE one set of compliance tests vs. two.  I don't see any reason why the plans would be tested separately since it is one employer who is the sponsor of both plans.  A separate filing for the original plan will be required until the assets are fully merged to the new but is there a logical reason (one that I am missing) as to why separate testing would be performed?  I have looked through regs RE mergers but most of them deal with asset/stock sales which this is not.