Hello,

If a MEWA plan is level funded, can it possibly be considered fully-insured?  And if it has not existed for a year, does that give us any out from being considered a MEWA?  Seller is part of a MEWA and hasn't been in compliance with state insurance laws.

Someone was full time and has received discretionary non-elective contributions.  They are now seasonal and working 300 hours per year.

Plan doc says forfeit after 5 Breaks in Service.  Would you forfeit while still employed?

I am working with a governmental 457b for a hospital. They have multiple plans, of which one that the hospital contributes on the behalf of participants up to the deferral limit. The question is whether the employer is limited at the 402g limit before catch up, or if they can contribute up to the additional annual catch up limit? The employer has contributed $24,000 to a participant for 2017. Do we need to return $6000 so that they are only funding $18,000? 

My thinking is that the catch up is only available if the participant actually defers, but not sure.

Thanks!

I have a retiree that is interested in starting an individual 401(k) plan to defer some consulting income he is going to receive over the next 3-5 years.  He also receives compensation from serving on the Board of Directors for two businesses (paid on a 1099).  Does anyone have a resource on whether or not the Board compensation could be deferred into the 401(k) plan?

Have two unrelated entities that are merging into a new entity (a type A or C reorg, accountants working out details).  They wish to also merge their respective retirement plans.  Both calendar year plans.  Plan A is a safe harbor 3% QNEC, Plan B is not safe harbor and has a matching contribution.

They wish to merge the Plans asap (during the year) with the new merge entity accepting sponsorship of the merged plans.  And want the merge plan to be safe harbor 3%.

I am trying to find guidance on how to handle - can we treat the merged plan as new and adopt SH provisions, do we have to wait until 2019, etc.  Any thoughts would be greatly appreciated.

Thanks.

Is it a REQUIREMENT for the filing authorization to show the EIN? We've always put it on the form routinely along with the Plan name, number, and Plan Year, but I'm not sure if it is actually a requirement. Just curious...

A NFP ["BCO"] created a Type 2 supporting organization* ["BCU"] for itself last year.  According to the accountant, BCU files it's own taxes with it's own EIN and there is a "majority overlap" of the boards, so she is telling us that this should be treated as a controlled group of non-profit organizations.

* "A what?"  Right.  The CPA gave me this link: https://www.irs.gov/charities-non-profits/charitable-organizations/supporting-organizations-requirements-and-types

There are 4 members of BCU's board... two of whom also sit on BCO's board.  BCO is responsible for appointing and removing BCU's board members.

No one told us about this until last week, so even though BCU was established almost a year ago, BCU hasn't adopted BCO's 403(b) plan.  Which is fine, actually - no one from BCU was allowed to defer, and there are no HCEs in BCO, so there is no nondiscrimination issue to worry about.

Does anyone have any experience with these "Type 2 supporting organizations" they'd like to share?  It certainly sounds like a controlled group, but I figured it couldn't hurt to be sure... thanks.

I've got a plan that is not top heavy.  In year 2, the owner realized the safe harbor 3% contribution was going to be too much of an expense.  The notice had the usual "we'll warn you at least 30 days out if we suspend the contribution" language in it, and indeed we amended in January 2017 to eliminate the SH, and the employer made the 3% deposits up through mid-February.

So now - I haven't run my ADP test yet, but I'm curious if the plan does fail, would I be able to use the seven weeks of safe harbor contributions in my ADP test?  Since safe harbor contributions are technically qualified, I suppose there's a shot of dumping them into the test.

Anyone try this before? 

(I haven't thought this out completely yet, but I presume I'll have the owner's own 3% amount working against me.)

The safe harbor was the only 2017 contribution beyond the 401(k).  (So I definitely don't want the owner having any QNEC outside the 401(k) test.)

If there's no regulatory hangup to it, I'll then double-check my plan document to make sure there's not further restrictive language.  (So at this point, I'm looking for at least theoretical justification.)

Thanks..

-bri

In five days I will be eligible to withdraw money from my 401(k) without incurring an early distribution penalty. Where does the time go?

Be on the lookout for a 36-year-old red-headed man who started BenefitsLink. Individual was last seen 23 years ago. May have dyed hair and beard gray since last sighting.

Could someone write me a match formula for the following? 

Match formula is as follows:

100% of first 4, 33.34% of next 3.  So if you put in 7% deferrals, you get 5% match

The last 3%.... payroll calcs it 33.34% for 5, 33.34% for 6, 33.34 for 7%... I know, a little different than what you might expect.

I'm proficient in excel, just not that proficient on the if/then statements.

Thanks

I think I remember that, regarding disclosures, it is the Participant's responsibility to keep their address up to date.  

If a lost participant is found, I think I remember that we do not have to send past notices, SAR, 404, etc.  But I cannot remember where I got this idea.

What do you all think?  Do we need to send past notices when we find someone?

We administer a safe harbor 401K  with Roth only deferrals.

W-2, boxes 1 & 5 are the same dollar amount,  employee deferred $5,000.

Wouldn't the deferral (whether Roth or not) be added to box 5 for the calculation of the safe harbor match??

Client is selling his dental practice. 

He said the sale is an asset purchase sale not a practice sale  so would the new owner be able to  continue the current retirement plan.  Or do they have to terminate the current plan and start a new one with the new owner?

I have a client with a company that sponsors a 401(k) plan,  The company also sponsors a Supplemental Retirement Plan for owners and select HCEs and managers.  One of the owners is turning age 70 1/2 and must take an RMD from the qualified plan.  Is there any requirement for RMDs from the SRP?

For Participants that don't respond to Distribution Election notices and since you can either buy annuities or pay to the PBGC, does the under $5,000 Lump Sum option exist so that the $1,000 balances can be rolled to IRAs?

Just hoping.  Thanks

Is the Clergy Housing allowance included for contributions?

Is the Clergy Housing allowance included for HCE determination?

Hello,

Would a surviving spouse be eligible for the same tax exemption as the duty disability retiree? I see all kinds of documentation referring to federal tax exemption to the disability retiree but nothing referring me to how taxation works for the person picking up the pension after the death of the disability retiree. 

I was given a copy of PLR -167262-03 within it "...the benefits received by the surviving spouse  or dependent minor children of a recipient who was receiving service incurred benefits are also excludable from gross income...." 

Thanks!

When it comes to plan terminations, we have always obtained all benefit elections and then instructed the trustee to distribute benefits all at one time.

Is this really required?

For example, we handle a 10 participant non-covered traditional DB plan that terminated November 30. Is there any problem distributing the benefits to one of the two 50% shareholders of the plan sponsor now and all remaining participants 6 months from now?

All participants other than the one remaining 50% shareholder would receive their full benefits (including PVABs determined up to the distribution date). The one remaining shareholder will end up waiving about 10% of his benefit.

Thanks.

I want to make sure my understanding of the QJSA rules for DC plans is accurate.  As I read Rev. Rul. 2012-3, if a plan offers a single life annuity or a QJSA as the default form of distribution in the absence of a participant election, and also offers a lump sum, spousal consent is not required if the participant elects the lump sum prior to the participant's annuity starting date.  Assume the plan has no annuity investments, and thus, e.g., Situation 2 in Rev. Rul. 2012-3 would not apply.    

I got divorced in 2007 - at that time, my ex-wife was awarded 50% of my 401K.  A QDRO was done stating this.  She never took the money out - the Plan never divided the money, I even got a loan from the 401k twice (which I should not have been able to do before they split the money).   The loans have been paid back.  Fast forward to 2017, she is wanting the money and is unfortunately, not using a QDRO lawyer, just a divorce lawyer, so she keeps writing the Order wrong to the Plan Administrators. 

The first time the Plan Administrators told her the Order must clearly specify whether loans are included in the participants account balance prior to any calculations and to submit an amended draft or court-filled QDRO .  The lawyer answered that wrong. 

Second time, they asked for historical statements issued by the previous plan administrators and provide an amended QDRO containing a specified dollar amount to be awarded.  Unfortunately, that was in 2000 and the previous plan says they don't have that info.

Her answer is to sue me - a Motion to Modify Postdivorce Domestic Relations Order.  Anybody have an idea how to respond to this?  Any thoughts would be appreciated.