In a safe harbor 401k Plan, the plan sponsor failed to withheld deferrals on bonus checks.  They realized the error the next week.  Since it was caught so early, are they allowed to just let participants make up their missed deferral on the next check.  If a participant chooses not to make it UP - do they have to get something in writing and do they still have to fund the match that would have been related to the missed deferral? 

Need some advice!

Thanks

This link is to the Congressional Budget Office's one page describing a CBO finding that H.R. 2823 (which would undo the Labor department's investment-advice fiduciary rule "would have a negligible effect on revenues for the period between 2017 and 2027."

https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/hr2823.pdf

http://www.napa-net.org/news/managing-a-practice/regulatory-compliance/a-boost-for-the-401k-limit/?mqsc=E3909970&utm_source=WhatCountsEmail&utm_medium=NAPA_Net_ListNapa-Net Daily&utm_campaign=2017-09-19_eNewsNAPA_Tue

This is the latest from Mercer projecting the 2018 cola adjustments

Hi all,

We took over administration of a plan in late 2016, prior TPA doing 2016 administration.  This TPA listed all plan investments as "Mutual Funds" both on Schedule H and on Schedule of Assets for line 4i.  Auditor has correctly identified all assets as Pooled Separate Accounts.  Should 5500 for 2016 be filed showing correct information at 2016 Year end ( all assets in Mutual Fund at beginning of year and PSA at end of year)?  Do amended returns need to be filed for prior years?  Should I get a life and stop worrying about things like this? 

Thanks for any help.  

I have heard of plans which only have annual valuations holding a certain percentage of plan-year distributions in escrow until the next valuation date, at which time the escrow can be released after adjusting for gains or losses during the period between valuation dates.  Has anyone seen any official IRS word on such procedures?   

Would anyone have a copy of the basic plan document that MetLife used in its RetireServe program pre-2009? In May 2007,  my client executed the MetLife 403(b) Adoption Agreement, but was not given a copy of the basic plan document.  The Adoption Agreement contains a footer indicated that it is an "ERISA/January 2007" document and a 2004 copy write by MetLife.   I would not be asking the question, but for the fact that the client was really late in signing MetLife's 2009 restatement.  Just wanted to know what the plan provides, and if there is an argument that the 2007 document qualifies as a good faith written document as of 2009 under guidance issued by the IRS.   

I'm reviewing a deferred compensation program that has the pay-out based upon the value of the service recipient's stock.  There are several 409A permissible payment triggering events (separation from service, disability, change in control).  In the payout section, it says that upon a triggering event, 1/3 of the deferred comp will be paid out over each of the next three years.  Then, there is a provision that says in the case of a Change in Control,  if the terms of the payout for the shareholders under the CIC are more favorable than the standard payout above, then the payout will occur in accordance with the terms applicable to the shareholders in general.

1.409A-3(i)(5)(iv) says: "Payments of compensation related to a change in control event...that occur because...the service recipient or a third party purchases a stock right held by a service provider, or that are calculated by reference to the value of stock of the service recipient (collectively, transaction-based compensation), may be treated as paid at a designated date or pursuant to a payment schedule that complies with the requirements of section 409A if the transaction-based compensation is paid on the same schedule and under the same terms and conditions as apply to payments to shareholders generally with respect to stock of the service recipient pursuant to a change in control event...."

I don't see this as an impermissible toggle - there is only one payout schedule in the case of a CIC- in accordance with the terms of the general shareholders agreement if they are more favorable than the standard terms; otherwise the standard terms apply. 

Does that interpretation seem reasonable, or am I way off base?

A lot of recordkeepers are starting to talk about Student Loan repayment programs.  Anyone have any articles they've read about what these things are?

Clients seem to get really excited about these things but I can't seem to figure out what they do/how they work.  

From what I gather employers can do payroll deductions/matches (the latter of which is taxable) and then faciliate payments to lending institutions?  Very curious to know what you guys know!

Don't really know anything about this subject (457(f) plans). There were proposed regulations issued in 2016 - are updates to 457(f) documents required by a certain date, similar to qualified plans? A client mentioned in passing that they have one of these, and I don't know who did the document or if any updates have been made (if even required in the first place).

Any thoughts appreciated.

As I was looking into this issue, I came across the DOL regulations at 2580.412-31 and -32.  However, these provisions appear to limit the exemption from bonding to the insurance companies providing the plans to other employers and do not specifically exempt the employers themselves.  Has anyone sought to apply these regulatory exemptions to the employers adopting such plans?

Plan auto enrolls at 5%. Participant completes the online process with the vendor to opt out. Plan sponsor does not stop withholding for 6 months. Participant wants the money back. Vendor says "too late you can't have the money back" because too much time has passed. I don't think their answer is valid.

EPCRS does not have an example of this nature, but is it reasonable to return the deferrals and forfeit the match using the logic in EPCRS of: 

(1) Restoration of benefits. The correction method should restore the plan to the position it would have been in had the failure not occurred, including restoration of current and former participants and beneficiaries to the benefits and rights they would have had if the failure had not occurred.

Any other thoughts? (participant wants the money, so leaving it in is not an ideal option)

Client's plan is being audited by IRS. We provide support services to the client/plan for the audit and charge a fee. Is that fee eligible to be paid from plan assets?

Hi.  We have a plan that currently is a safe harbor 401(k) using a QNEC.  The plan now wants to change mid year to a safe harbor using a match.  I do not believe this is possible, since it reduces the amount of the required QNEC.  Notice 2016-16 indicates that changing types of safe harbor plans mid-year is prohibited and uses the example going from a tradition 401(k) to a QACA 401(k).  Most literature out there cites this as the only prohibition, but the IRS Notice indicates that this is an example, which would seem to indicate that there are other prohibited changes.   Is there anyone out there that has dealt with this question?  Thank you.

Do Solo DB plans have to issue an SAR?

I am looking for DOL Advisory Opinions 82-21A and 79-82A.  Does anybody know where I can find them?

I have heard two opposing opinions.

When calculating an RMD, is the accrued contribution added to the 12/31 of the previous year's account value?

Say a participant dies while in pay status -- he is receiving installments.  Once he dies, can the plan allow a beneficiary to change the form of payment, or is the beneficiary locked into whatever the participant chose?

What if the participant was not in pay status?  Can the plan allow the beneficiary to elect how he receives the payment?

Thanks!

We recently took over a FICA Replacement plan.  The plan has a 7% employee contribution and a 13% employer contribution.  The employer contribution account has a vesting schedule that begins at year 5 with 50% vesting.  I was under the impression that at least 7.5% had to be 100% vested.  Can you have a vesting schedule?

GROAN. Ok, so let's say you have school districts A and B. Both sponsor cafeteria plans, which are calendar year plans. The plans have different provisions.

Let's further say that the school districts are legally merging on July 1, 2018, into one new unified school district. This merger date is a legal agreement and is set in stone.

I don't know what they WANT to have happen - at this point, only trying to determine what options might be available. 

What happens to the plans once the merger takes place? Can the plans merge into one plan, but maintain the same provisions for the separate employee populations for the balance of 2018?

Alternatively, possibly thinking outside the box, can the elections made for 2018 in Plan A and Plan B specifically state that they are for 6 months only? And then they make new elections, under a new plan sponsored by the new entity?

Somewhere in the back of my head, for no reason I can discern, it seems like there is some prohibition against consecutive short plan years in cafeteria plans. But even if true, since as of 7/1/18 there is a new entity, then perhaps this wouldn't apply?

Perhaps Revenue Ruling 2002-32 can be relied upon to prohibit any CHANGE in employee elections for the second half of 2018?

Any thoughts are very welcome.