Does a profit sharing allocation that is a points based allocation based on service where participants get a share of the contribution based on the ratio of their years of service to the total years of service of all participants meet any kind of designed base safe harbor?  It's basically a pro rata allocation based on service.  Thanks. 

Looking for opinions on reasonable fee range for one of the big consulting houses to conduct an RFP to help us select a new PBM? We are a 40,000+ employee company operating in almost all states. Pharmacy is currently carved in with medical.

Also need reasonable fee for implementation and ongoing oversight of PBM.

Thank you.

We have a client who established a regular SEP but failed to cover their two eligible employees for five years. We've advised the client how to correct using guidance from the IRS Fix-it Guide.  What are the consequences if the client does not make the corrections?  A regulation cite would be helpful if possible.

Thanks!

Well, it is that time of year again.  The July CPI was published a few hours ago, so I imagine Tom is busy updating his spreadsheets.  To get the ball rolling:

It looks like we can lock in the 2018 limits as follows:

DB $220,000*
DC $55,000*
Comp $275,000*
401(k) $18,500
HCE $120,000
Key employee $175,000
Catch-ups $6,000
SIMPLE - $13,000

Those marked with an asterisk have a slight chance of not increasing as shown. For that to happen the August CPI would need to decrease 1.58 and then remain level at 243.206 for September or if August remains level at 244.786 then September would need to decrease all the way to 241.625 (a decrease of 3.16).  To put the 1.58 and 3.16 raw decreases into perspective, the CPI did, in fact, decrease from June to July by 0.169. If you are a fan of smoother rates a decrease of 1.05 from July to August and another decrease of 1.05 from August to September would also result in those three limits not increasing.

mike

The expense ratio of an Investment is 1.00% as advertised  on the Investment prospects. The detail fee structure of the expense ratio is that 0.60% is allocated to Revenue Retained by Investment Provider, and the rest of the expense ratio is paid out as Revenue Sharing to Record keeper/TPA.

Assuming the only service provider fee (Indirect Compensation) for the Investment in discussion is the expense ratio (EIC) that is advertised on the Investment prospectus, is this permissible to use the alternative reporting method and exclude the Record Keeper/TPA from being reported Part I Section 2 and Section 3 of Schedule C (Form 5500).

My careful reading of  the 2016 Instructions for Schedule C (Form 5500) Service Provider Information did not help me to be 100% sure to exclude the Record Keeper/TPA from being reported Part I Section 2 and Section 3 of Schedule C (Form 5500).

Thank you for all your help.

AdKu

Non-Safe Harbor 401(k) plan has (non-statutory) class exclusion for the employer.match.   They are not excluded from salary deferrals.  Must the employees of the excluded class be counted in ACP testing?  Thanks.

Is anyone using DocuSign to facilitate the signing of plan documents? Do you like it, did you try it and hate it, let me know!

When auditing a 401K plan for the first year it requires an audit, how are the financials dated? The Statement of Net Assets Available for Benefit must be comparative, but this is the first year audited (limited scope). Should we include two years on both statements and mark the prior year as "unaudited"?

USERRA Intermittent leave

A reservist has been repeatedly called up for 3- and 4-day/week assignments.  He has ceased to satisfy the "regularly works 30 hours/week" requirement for maintaining health plan coverage, i.e., has become a part-time employee.  Must we treat each weekly notice as a new period of service and restart the 30-day clock for retaining the eligible employee premium sharing rate?  Can we unilaterally classify this pattern of military service as a continuous period of part-time military service and then convert from the active employee rate to the 102% COBRA rate after the employee has lost the active employee coverage and received 30 days of coverage at the active employee rate? 

A participant has a Simple IRA, a Traditional IRA, and a non-deductible IRA.  All three are separate IRAs.  Their employer started a new 401(k) plan that accepts rollovers from IRA and qualified plans.  They want to rollover the Simple IRA and Traditional IRA into their 401(k) plan.  Do they have to account for the non-deductible IRA and the after tax money, even if they do not rollover that non-deductible IRA?

Also, say the 401(k) allows for after tax contributions and in-plan Roth rollovers.  Rollover money can be distributed at any time in the 401(k) plan.  Can you rollover the non-deductible IRA into the plan too and then, do the in-plan Roth rollover?

I work for an Esop Company and it appears we are being sold although no one has been formerly told. The signs are all there. In 2008 our stock price was worth double what it is today. The owners have hired their families and friends and showed favoritism in wages and advancement while telling the rest of us there wasn't much profit so here is a 2% raise. Then they turn around and hire another family member or friend at a high wage. They also have a separate company that they have owned for years which they purchase warehouse building that they lease back to our company essentially letting our company pay for them. They setup the leases so that our company is responsible for all maintenance and repairs, so when they buy a building through their one company, they thy renovate it and make the Esop company pay for it. They have also turned in numerous expenses that probably had nothing to do with business. When they purchased the one building that the Esop leases, they gave themselves a $333,333.00 bonus each (There are 3 primary owners)to pay to have the building built that they then turned around and leased to the Esop.

Recently they fired a 30 year employee and layed off a 25 year employee with Muscular Dystrophy. I think they did it in order to obtain their shares of Esop stock.

They also have donated thousands of dollar in material to different organizations that they are affiliated with for the prestige I am sure. This has taken from our Esop profits. 

The Trustee is a long time friend of theirs.

On top of all these  things, they have made many bad decisions that have affected our stock price. I fear that an announcement will be made in a few weeks that they have sold the company and many of us will lose our jobs. Do we have any recourse? Can we do anything after the sale goes through, or are we just screwed?

Plan X is a non-safe harbor 401(k) with hardship provision.

Safe harbor hardship definition; Plan X elective deferrals plus employer match.

Max hardship by definition would be the aggregate employee contributions less any previous hardship amounts;

Would aggregate match be included or aggregate vested match???

Good day,  quick question can 100% of my spouse 401k be left to his only child/my stepchild if he dies before he retires.  Recently I have read by law the spouse has to consent to that which I have I not.  I do understand if re retires and pull all the funds out of the 401k plan he can leave it to anyone he likes.  Also do the ex-wife with a Qdro have any claims to it ,  because it says she is the surviving spouse int the qdro.

I'm the new wife,  I guess my husband thought he would not remarry,  however I have 2years in the marriage and plan to stay till death do us part.  However the ex-wife has a qdro approved back in 2013, we were married late 2015.  They have been divorced since 2006. Is the amount of the benefits she will be  awarded valued at the  amount of what his retirement was worth up to the date of the divorce in 2006,  and is that the same for survivors benefits.   At this time the qdro  says that she will get 50%.  He plans to work another 5-10 years but his currently at the age of 59 1/2 so I think she can start collecting benefits.  What can do to protect myself from losing out on the Benefit plans, 401k, survivors benefits and social security benefits.  Things like this really he does not like to talk about but does he need to make any changes to these benefit plans or to the qdro.  I'm no dummy I refuse to let the ex get everything.

Hi All,

Are there any impacts under ERISA if the QDRO qualification notice was sent to the AP (using an address on file and not the address on the QDRO) and the AP says it took weeks to receive it was forwarded to the new address? 

Thank you!

How are your firms structuring your staffing roles?  Are you operating with administrators that correspond with their assigned clients and also perform all of the annual valuation work from census scrubbing, to contribution calculations, applicable testing and tax return filings?  Or are you structuring your organization with staff assigned solely to client communication and others to day-to-day plan administration functions only?   Do you operate with staff that only perform distribution and loan processing functions? What seems to be working best in your organization from a client happiness and overall efficiency process?   And if you wouldn't mind sharing the size of your organization or what you have found has or hasn't worked if you have looked into making changes to your overall practice staffing structure.

Qualified DC Plan, fully vested account balance - no beneficiary form on file

Former participant was married at time of death and died 15 days before 1st RMD was due to be taken.

A letter regarding benefit from plan, along with distribution forms, has been sent by Plan Sponsor via certified mail and a return receipt has been received 2ce!  The SSN of the surviving spouse is unknown.

How can the account balance be disposed of?  As a missing participant - to forfeitures until/if a claim is made? other?

Like most plan documents, the plan has a small payment provision in which a single sum payment is made to the participant if the PV of their benefit is under $5,000 at the time of their termination. The plan sponsor has apparently failed to pay out several terminated participants who fall under this category - some of whom have been terminated for well over 5 years.

Has anyone heard of this coming up under an audit?

This has always puzzled me and I'm pretty sure there are other threads on this but I can't find them!

Anyway - participant in a profit sharing plan terms at age 58.  takes cash payment distribution the following year but before turning 59 1/2.  In reviewing the 1099-R codes, I think the 1099-R code should be a "2" because the participant termed "in or after the year the participant has reached age 55" (quoted from the 1099-R instructions; code 2) and not a "7" although the participant will be 59 1/2 before the end of 2017.  It doesn't appear that code 7 applies in the year a participant turns 59 1/2 but rather after they turn 59 1/2.

Does anyone know why didn't they just make the age 55 instead of 59 1/2 to avoid the 10% excise? Is this a leftover from when pension plans were more prevalent and more people took early retirements? 

I can only think of two examples of those between 55 and 59 1/2 who might still pay the 10% excise  - active participants between 55 and 59 1/2 who take an 1.) allowable in-service distribution or 2.) hardship withdrawal.  Any other examples?

Client is surviving spouse.  We believe her to be the beneficiary of a large account held in a "PSP."  Husband and his attorney are both deceased.  Life insurance salesman who sold them on the nonstandardized plan created by life insurance company is senile.  Only papers related to plan date back to 2000.  Those include some 5500s.  We have contacted the insurance company and it cannot produce the nonstandardized plan, let alone the adoption agreement.  We don't think it will ever be capable of being reproduced.  Likely that the plan just went totally silent after about 2001, but no contact we can find in deceased's files from the IRS.  Further, the small 3 person company that sponsored the plan is no longer and no one can be found.

The investment firm holding the account says, "produce the plan document" before it will do anything.  No plan document exists.  What to do?

One take I have is to say, "There is no plan document, hence, it's a after-tax account.  Make a distribution and don't report on a 1099-R.  I've read in this forum about the King case and the issues of "consistency" but, if I can convince the investment firm that it is an after-tax account, perhaps they would distribute the account to the surviving spouse.  I do have an issue with not having a beneficiary designation, it appears.  But, I do have a letter from way back from the attorney indicating that the deceased husband's revocable trust is the beneficiary.

The King case might allow me to argue that if the plan went out of compliance from the get go due to lack of a document, that cash contributed was taxable in a closed tax year.  And, now, the distributions are tax free from the account.  We can't establish that a plan ever existed but there are just a couple of returns that the deceased attorney prepared (1997, 2000 and 2001).  Nothing after.  We have exhausted our search and I have concluded no documentation will ever be found.

Thoughts?