Can a QDRO BE changed 

I am currently an associate for an RIA in our Retirement Plan Division. I joined the division last year, and  have spent the year "learning by listening". All my energy outisde work on focused on finishing up the CFA.  I recently became a charterholder, and I have the AIF designation as well.

I am extremely confident of my understanding of markets and investments, where I am lacking is understanding ERISA rules, how to design plans to best benefit our clients, how rules affect certain things etc.

I was wondering if anyone here could provide some insight on where I should focus my energies.  I will be working as a 3(38) Investment Manager to plans - would it best to focus my energy on obtaining the QKA?  or would the CPFA better serve me.  Or maybe there is something else I should be focusing on.

I have some insights from my boss - I want to seek out other opinions though - thanks!

 I have a question on eligibility to offer a 125 plan. In this situation the employer pays 100% of the health & dental insurance premiums for the FT employees, and offers coverage for spouses & dependents but it’s at the employee’s expense. Part time employees have to pay 25% - 50% of their health and dental insurance premiums depending on how many hours they work. The employer also offers a pre-tax Flexible Spending account for paying eligible medical, dental, eye glasses, and day care expenses.  Insurance premiums are not eligible for this. The employer is a non-profit religious organization.

I’ve had one “benefits person” state the employer can’t have a Section 125 plan because the employer pays 100% of the (FT) employee’s health and dental premiums.  But I’ve had another “benefits person” state the employer IS eligible to have a Section 125 plan because some employees pay for spouse/dependent insurance premiums and most employees participate in the Flex plan.  

Does anyone have any insight they could share on this topic?

 Thank you in advance.

Is there a deposit deadline for employer contributions to a governmental 401(a) plan?  governmental 403(b) plan?

Thank you!

So in 2017 (more than a little more than 60 days ago, I checked) a participant elected to roll over a fairly substantial pre-tax 401(k) directly to a ROTH-IRA.

Despite making this election and agreeing they had read the Special Tax Notice that indicates if you elect to rollover to a ROTH IRA this will be tax able (but not subject to the 10% penalty) participant now claims they had no idea it would be taxable and wanted it to go to pre-tax IRA.

Is there any "re-charaterization" option available to the participant to convert the ROTH-IRA back to a traditional IRA for 2017 that I am unaware of?

I'm also 99.9% sure the transaction can't be unwound by returning the funds to the Plan and re-issuing as rollover to traditional IRA but on the 1 in a 1000 chance I'm missing something I thought I'd ask here.

Nothing appears wrong with any paperwork and the funds did get to her ROTH-IRA and were cashed.

We now have reduced QNECs required when a Participant is not given the opportunity to defer.

Does this apply when an election form is misplaced?

Back in 2008 a pension plan was terminated and some of the participants elected to rollover their balance to the 401(k) Plan.    Now in 2018, a participant wants to rollover their prior 401(k) plan to this plan and it is realized that the plan does not allow for rollovers.   

Is it as simple as amending  the plan now to allow for rollovers, or how do we fix those rollovers from 2008?  

A Tribal Governmental K-12 Public School wishes to establish a 401(k) plan.  I don't believe they can.

PPA 2006 expanded the definition of governmental plans to include a plan established or maintained by an Indian Tribal government for its employee’s performing “governmental functions”, but not to include those employees performing commercial activities (e.g., workers in a hotel, casino, or convenience store)  Essential governmental functions would be considered those functions customarily performed by state and local governments if: (1) There are numerous State and local governments with general taxing powers that have been conducting the activity and financing it with tax-exempt governmental bonds, (2) State and local governments with general taxing powers have been conducting the activity and financing it with tax-exempt governmental bonds for many years, and (3) the activity is not a commercial or industrial activity. 

Tribal governments can establish a money purchase plan or profit sharing plan for its “commercial” employees, not a 401(k), enabling it to comply with the applicable qualification rules under Code Section 401(a) for plans applicable to nongovernmental plans. 

An Indian Tribal Government is considered a “State” for 403(b) purposes, per Code Section 7871(a)(6)B), that they can offer a 403(b) program but only to employees of their educational institutions.

Is my assessment correct?

A 401(k) plan limits partiicpants to 1 plan loan at a time.  It was discovered last year that a participant took out 2 plan loans.  Is this an operational failure?  How is this corrected?  VCP?

Let's say a plan has 2 participants. Participant A is an HCE because of ownership - he owns 100% of the company and his salary is $50,000. Participant B is an NHCE and earns $100,000.

From what I understand, the company can make the same dollar Profit Sharing amount contribution to everybody. Let's say that contribution is $5,000 each. So that's 10% to HCE and 5% to NHCE. The software says that the General Test is failed! What would you do in this case. Is it fine to not include the General Test at all in the reports as the same dollar amount to everybody is a Safe Harbor definition?

Thanks.

Plan Sponsor with a safe harbor 401(k) plan (basic safe harbor match), just learned that for 2017 their payroll company did not apply deferral elections to bonuses paid during the year.  Plan Doc does not exclude bonuses for any plan purposes.

Match is allocated at year end.

In reading through the IRS 401k fix it guide, Example 2 under Mistake 3 (didn't use the Plan's definition of comp), would require a QNEC of 50% of the deferrals that would have been made from the bonuses had the elections been applied, plus earnings, plus applicable match.

However the example goes further to say that with respect to the missed deferrals, "other correction methods may be acceptable to fix that part of this mistake", and refers to Mistake #6 which describes corrections for situations in which "Eligible employees weren't given the opportunity to make an elective deferral election (exclusion of eligible employees)."

The Plan Sponsor just discovered the error (when putting together the year end census data).  They are going to ensure that elections are applied to 2018 bonuses.

I'm thinking based on the reference to Mistake #6, that the QNEC can be limited to 25% of the missed deferral, assuming the QNEC will be made in 2018.

Am I off base on that?

Thanks very much.

Has anyone thought about what the deadline is for setting up a new multiemployer defined benefit plan?

Example:  Plan is intended to be effective July 1, 2017, and to be a calendar year plan.  The employers all have fiscal years ending June 30.  The plan is not finalized until January 20, 2018.

The IRS 401(k) resource guide says, "The plan may not be made effective earlier than the first day of the employer’s tax year in which the plan was adopted. In other words, an employer may adopt the plan document on the last day of its tax year, with an effective date retroactive to the first day of that tax year, but not any earlier."  https://www.irs.gov/retirement-plans/plan-sponsor/401k-resource-guide-plan-sponsors-starting-up-your-plan If this applies to multiemployer defined benefit plans, it would mean that the plan could be retroactive to July 1, 2017, even if the plan itself has a calendar year.

It would seem odd to make the deadline for adoption of a multiemployer plan the employer's fiscal year.  What if the employers had different fiscal years?  A more reasonable approach would seem to be to have the deadline relate to the plan year--meaning that the plan could be adopted in January of 2018 retroactive to July 1, 2017 only if the plan adopted a plan year that ended between January 31 and June 30.  However, I'm just not finding any guidance at all on this issue.  Is anyone aware of any?

I have a 403b plan whose assets are invested with an Insurance Company. Have a participant who has been in the plan finally decide to start participating. He contributed $900 and the company matched $900. The issue that I just found out was that the money was not deposited with the Insurance Property.  Instead the participant opened up a Simple IRA, which the company deposited the contributions into.  This opens up a host of issues but wanted to get some ideas on how to best move forward.

I have a question that has bedeviled me. Here's the situation:

Both spouses work full-time for the same ALE.  Husband enrolls in family coverage and covers his spouse and children,

The instructions for Form 1095-C provide that in such as case "the enrollment information should be reflected only on Form 1095-C for the employee who enrolled in the coverage. (However, it would report the other employee family members as covered individuals)."

This makes total sense.  My question is whether a Form 1095-C needs to be completed and delivered separately for the spouse.  (The Instructions also state that one Form 1095-C needs to be completed for each full-time employee.)  If one does need to be completed, what codes should be used for the spouse?

There is probably no requirement that a form be completed for the spouse but I have not found any guidance specifically saying so, and, as I mentioned, it is bedeviling me.

Any assistance would be appreciated.

Let's say there are 2 companies, both owned by the same Employer. Company A has employees who are NHCEs and the Employer is the 100% owner. Company B is owned 100% by the same Employer and there are no other employees at Company B. Would this be a Controlled Group and would it have to be aggregated for testing purposes? What about the coverage test for Company B? Wouldn't the test show that 100% of HCEs are benefiting and 0% of NHCEs (since the denominator includes the whole NHCE population of the controlled group) and therefore the two plans will have to be aggregated for testing?

Thanks.

Employer A and B are unrelated employers who both sponsor a 401(k) Plan.  Employer A purchases 100% of the stock of Employer B on December 15, 2017.  However, on December 14, 2017, Employer B establishes a termination date to terminate its plan as part of the M&A agreement because Employer A does not want to assume sponsorship of that plan.

ISSUE:  Employer A does not want to recognize prior service with Employer B (wishes to treat the newly acquired employees as new employees) requiring them to meet the age/service conditions in the plan to participate.

The excerpts below are from the ERISA Outline.  The first two seem to relate to an asset transaction (not stock transaction).  The third seems to back up that interpretation especially with the highlighted text.

• IRC §414(a)(1) requires service for a "predecessor employer" to be treated as service for the current employer only if the current employer is maintaining the plan of the predecessor.
•  IRC §414(a)(2) provides that where the employer does not maintain the plan of the predecessor employer, service with the predecessor employer does not have to be counted by the new employer, except to the extent provided in regulations. Since no regulations have been issued, the IRS has generally treated the granting of service under the circumstances described in IRC §414(a)(2) to be elective on the part of the employer, provided that the granting of service does not create prohibited discrimination.

• According to the IRS in GCM 39824, an employee generally does not have a severance from employment merely because all or a portion of the stock of the company is sold to another person. For example, if the shareholders of a corporation sell their stock to another business, or to other individuals, the change of ownership of the corporation does not cause the employees of that corporation to have a severance from employment. This is true regardless of whether the corporation maintains a plan and, if it does, whether it continues to maintain that plan after the sale. The IRS is simply recognizing here that in a stock sale, the entity itself continues. Only the owners of that entity have changed. Thus, there is no “former” employer from which the employees of the entity can have a severance from employment.

When the employee is treated as having a severance from employment from the seller, the buyer does not have to give the employee credit for service with the prior employer.  If there is no severance from employment, then the employees are treated as continuing to work for the same employer.  

QUESTION:  Does the termination of Employer B's 401(k) plan prior to the acquisition date (12/15/2017) allow Employer A to treat the newly acquired employees as having a severance from employment and therefore no mandatory recognition of prior service is required?

I have always thought the answer was YES but I am beginning to second guess this answer.  Any feedback is greatly appreciated! Thank you.

I have a plan where the owner is the only one deferring.  6 staff members.  She wants to max out at $54k.  Plan is 3% SH with a discretionary match.  We are thinking of giving her a 4% match to lower the gateway.

Does she have to let the non-deferring staff know that a match is being made to the plan?

Participant defaults loan on 3/31

Participant turns 59 1/2 on 7/1

1099-R is issued after end of the year

Early distribution penalty?

Has anyone had any experience with the following (or similar) scenario?

Plan effective 1/1/18 with profit sharing provisions. Elective deferrals are added effective 3/1/18, but the plan sponsor wants to offer the 3% employer non-elective safe harbor contribution effective 1/1/18 (i.e. for the whole plan year, even though deferrals are only allowed for 10 months).

this hardly seems like it would violate anything as they are being more generous than necessary, but I cannot find any authority for allowing such an arrangement. 

Thoughts anyone?  

Can someone please help me find reference to guidance that I have heard of that allows an employer to not combine two related companies into a Controlled Group for the purposes of discrimination testing in the year of acquisition, and perhaps even the year following acquisition?  Thanks so much.

Nancy Pritz