One of our clients is a LLC Partnership. One of the partners takes a draw each pay period from which 401k deferrals are taken but no match is done. It's now year-end. Is the match determined using the total draw income or will it be calculated based on her K-1 earnings?

I'm working with a stock option that is currently a short term deferral because the option only vests upon a CIC.  The client now wants to add termination of employment (except for cause) as a payment event.  I am pretty sure the subsequent deferral election rules apply here, but the result seems impractical when using the possible CIC as the original payment date.  I also see a problem with the prohibition against acceleration of payment, because of course, an employee could terminate before the CIC date.  Thoughts??

Looking over a Return of Excess form from a large record keeper.  In the tax withholding section it says (paraphrasing): if the distribution is on account of 415, ADP or ACP, then 10% withholding will apply unless otherwise indicated below.

Then it goes on to say (quoted): Excess deferrals (402(g)) are not subject to withholding. (emphasis mine)

Is that right?

I have a rehired participant, no BIS,  worked ~ 825 hours in 2017, top heavy cross tested safe harbor match plan.  She did not contribute so no safe harbor match but receives a top heavy allocation.  Participants who receive a nonelective contibution must then be bumped up to the gateway.   My question is this...the owner's profit share percentage is 9.33%, which means the staff group can get 3.11% and gateway test passes.  However I have to increase the staff contribution in order to pass other non discrim testing.  Eligible staff is getting approx. 5.5% for profit share. Can the rehired participant receive 0.11% in addition to her top heavy or is she required to receive 2.0% to get her to 5%?  I can't seem to sort this out in my addled mind.....

What have people found besides Sungard and ASPPA conferences for CE credit?

Hello,

What should we do if a plan previously corrected a failed ADP test timely but then years later, inform us that compensation was incorrect and after re-running, the refunds should have been even higher?  Would this be considered a late correction (after 12 months ... and would we have to go through VCP)?  Or could we simply just have extra corrections processed for the affected participants still in the plan and perhaps inform the ones that have left that they might have ineligible money sitting in whatever account they moved to?  

I can't find anything for this scenario.  I know if the refund amounts that came out were too high to begin with, we make an effort to have the money returned to the plan.

Thanks!

Are there circumstances where the ER offers affordable, minimum value coverage but the EE can still qualify for a Marketplace subsidy (premium tax credit?

Stated differently, is the definition of what's affordable for purposes of the employer mandate exactly the same as the definition used for purposes of PTC qualification?

We've encountered situations where subsidies have been awarded despite our submission of proof that the employee declined an offer of coverage that met an affordability safe harbor.

First let me say I am not a benefits manager, I am in operations.  I left my employer in March of 2017.  The company has well over 1000 employees and has locations in 3 states currently.  When I started my with my new employer, I attempted to rollover my previous 401k.  I was informed by the administrator that my 401K would not be available for me to rollover or do anything with the account outside of the plan until Dec. 31, 2018.  Not sure why this is the case and was wondering if anyone has ever heard of this in any plans.

An ESOP Plan is in termination.  All of the assets have been distributed except for the owners, who have chosen to take their distribution in installments over 5 years.  Our understanding is that the Plan will need to file a Form 5500 each year until the assets are zero, but their attorney disagrees.  I have not been able to find anything that says otherwise.

I can't believe I've never seen this before, but...

I've got a 71+ year old non-owner participant not taking RMDs because she is still employed.  The plan is terminating in 2018 , but not due to the business closing, so the employee is still going to be employed.  Does she have to take a 2018 RMD before she can roll over the remainder of her distribution?  Thanks.

I am getting conflicting answers as to whether the transition rule for acquisition solely applies to 410(b) or whether we can apply it to 401(a)(4) testing also.   

Situation is company B becomes a controlled group with Company A due to ownership change on 4/1/18.   Company A and Company B each sponsor 401k plans with calendar plan years.  A's is a cross tested Safe Harbor 401k, B's is a cross tested non-Safe Harbor 401k.

Do you think we  have to combine them for testing 401(a)(4) for the 2018 and 2019?  What about ADP testing since B is not a Safe Harbor 401k?

Does anyone know of a cite that addresses this?

I have a Safe Harbor PS 3% Plan that covers 150 employees. They are planning to fund the PS per payroll. Is there any BRF issue if the company were to fund the PS for most of the employees but miss a few of the participants because administrative errors etc. during the year, but were later caught with the annual true up? 

My concern is that everyone will not equally benefit in terms of timing of the allocation. 

I am advising against it as I see it to be a problem. But any guidance would be appreciated. 

I have had green card for 18years. I have been living outside US for 8 years. I have not visited US in the last 4years due to family issues and I was told my greencard is no longer valid.

I was advised that I should surrender my green card and re-apply for new green card (through my family).

My question: If I surrender my green card, what will happen to my IRA (it was established during the time I worked in US for the 1st 10 years of my career)? Are there any tax implications and will I be forced to withdraw from my IRA or can I leave it there until retirement age even though I will no longer be a green card holder?

Thanks

Due to payroll issue, plan sponsor failed to implement changes made to existing 401(k) plan participants' elective deferrals for two payroll periods.  So there is a mix of participants who elected to increase deferral percentage and failed to defer enough as well as participants who decreased their deferral percentage and now have contributed more than they intended.  Plan Sponsor is clear on fix for those who failed to have their deferral amounts increased and will give notice and correct those accounts via EPCRS guidelines.

What is less clear are the possible alternatives for participants who didn't have decreases implemented and so deferred too much to the plan.  Plan sponsor does not want to forfeit amounts from participants' accounts and/or make additional payments to participants through payroll to get them the additional pay they missed.  Instead, company wants to correct this (at least in all cases possible) through payroll system adjustments.  For example, somebody that was deferring 10% and elected to decrease deferral to 5% (and thus had two payrolls with an extra 5% deferred) will have "negative 401(k) deferrals" for the next couple of payrolls. 

If I understand the proposed correction process correctly, that seems to mean they will basically offset or adjust participants' future 401(k) deferrals to reduce the contributions by the excess amounts contributed.  So while next two payrolls should have a 5% 401(k) deferral, they will instead show a negative 5% 401(k) deferral and participants will basically not have any salary deferred and contributed to the 401(k) Plan.  After 2 pay periods, the total deferral amounts will be correct and equal to what participant would have deferred if the election change had been timely processed. 

Is it generally possible to correct this sort of mistake in this or a similar manner by essentially adjusting within the payroll system?  If not squarely covered under SCP, do others have experience with these sorts of corrections getting approved under VCP?  Not sure exactly what you do with individuals who have dropped deferral rate down to 0% or have since terminated employment?  Guess you could just arrange for forfeitures in those cases if that is only way to fix.  Guess you could also forfeit excess earnings but still make main deferral adjustments via payroll?

Thanks for any thoughts or experience.

I was just made aware that the 2016 5500 filings for our plans failed to include the audited financial reports. The reports were done on time but the wrong attachments were uploaded to EFAST. 

No notice was received from the DOL, as of yet, but I would like to get this corrected as soon as possible. 

Do I amend the filings via EFAST or is there another more efficient way?

I am looking for a creative solution around repayment of loans in a spinoff.  Imagine I have an organization where a group of employees are part of divestiture.  The selling organizations loan program does not allow for terminated employees to continue making payments, nor do they want to open this feature up to the entire population.  The purchasing organization does not have a loan program, nor do they want to create one. 

The best solution would be for one of the parties to adjust / create a loan program.  That seems to be a tall order even though it makes the most sense.

So I am looking for a creative solution where the entire group of employees can be packaged together so they continue making loan repayments.  If you have any recommendations, please let me know. 

Employee's 10% deferral election was not implemented for over a year.  SH nonelective plan.  I don't believe SH plans can use the reduction from 50% to 25% for the QNEC, can they?  The employee should get a 5% QNEC for the deferral, plus the 3% SHNEC, plus earnings, right?

A brand new DB plan is started 2-1-2018, plan year ends 1/31. It excludes years of service prior to 2-1-2018 for vesting purposes. Vesting is a 3-year elapsed-time cliff. One participant is also a 20% owner and they are 71 years old now.

The owner becomes fully vested on 1/31/2021.

The first RMD is the accrual on 12/31/2018, but it is not vested, so it gets added to the next year's RMD. The second RMD is the accrual on 12/31/2019 plus the prior unpaid (nonvested) RMD, but it is still not vested, so it gets added to the next years' RMD. The third RMD is the accrual on 12/31/2020 plus the prior amounts, but it is still not vested, so it gets added to the next year's RMD.

By 12/31/2021, the participant must take the distribution of their RMDs. They terminate in 2021 and elect a lump sum payment. The RMD for a full lump payment can be calculated using the "Account Balance" method (like a DC plan).

Can all of these RMD's be determined using the account balance method, or must the 3 prior year's RMDs be based on the DB annuity calculation method?

I have a traditional DB plan that is terminating.  Lump sum was only available at retirement age and now it is available to all for the plan term.  When we calculate the PVAB for anyone at ERD we base it on the benefit payable on ERD.  We are calculating the PVABs for the 6088 and have discovered that due to the current segment rates the PVAB of the NRD benefit is higher than the than the PVAB of the benefit at ERD.  Has anyone run into this?  The document really doesn't address it.  It makes a $130K difference in the termination distribution amounts.  How will the PBGC expect us to calculate it?

The definition of Compensation under the 401(k) Plan is W-2  compensation. Employer has a non-qualified deferred compensation plan. Participant receives a distribution from the non-qualified plan. Can the participant elect to defer a portion of the non-qualified plan distribution to the 401(k) Plan? Seems to me that the answer is "yes" because distributions from a non-qualified deferred compensation plan are included in W-2 compensation.

Thoughts???