Auto enrollment plan where participant takes a permissible withdrawal to close their account within 90 days.

Match eligibility is immediate.  Do they still get the match?  Please please please tell me the answer is yes cuz I don't want to have to look for these withdrawals every time I run some numbers (let alone differentiate between permissible withdrawals and any other kind of withdrawal).

An employer has a 401(k) plan for the staff and a 403(b) for their union employees.

A former staff 401(k) participant is not a union employee.  There are no distribution options available to the employee in the 401(k) plan.

Is it possible for the participant to request an elective transfer from the 401(k) to the 403(b)?  Did EGTRRA create an exception that allowed an elective transfer between dissimilar plans, and if so, would that apply in this situation?

Thanks.

I have a safe harbor design question - 

401(k) regulations provide that "the safe harbor nonelective contribution requirement of this paragraph is satisfied if, under the terms of the plan, the employer is required to make a qualified nonelective contribution on behalf of each eligible NHCE equal to at least 3% of the employee's safe harbor compensation."

I know a plan can limit the safe harbor contribution to only NHCEs or it can provide it to everyone.  Is there anything stopping a plan from providing the safe harbor contribution to NHCEs and also to HCE's in a certain identifiable job category (but exclude all other HCE from the contribution)?  

Thanks,

I have been asked to look into a situation where a Plan Sponsor did absolutely nothing regarding compliance since adopting the Plan in 1994.  While I anticipate operational defects, my first concern is toward plan documentation.

My understanding is that the filing under the "Non-Amender Program" requires document updates for every required restatement that was not done.  My question is what document restatements would be needed for a Standardized Prototype which has an Opinion Letter dated 7/9/1991.  I do not have access to the Basic Document or any updates to the Basic Document.  Just a 2 page Adoption Agreement and the Opinion Letter.

Any suggestions on what needs to be done are greatly appreciated.

I have a client with a Group Health Plan that has experienced excessive utilization with their Drug Card program. A solution being considered is to offer a Base Plan with Generic only, and let those who desire it Buy Up to the plan with Broader Drug Card Coverage.

The company funds a $1000.00/year Health Reimbursement Plan that allows the assets to accumulate in each participants account.

I am seeking a solution that would allow the $1000.00 being contributed currently, to a plan that will allow the employees to allocate that towards their portion of their employee premium if they choose.

It that possible?

In making disclosures for and reporting on Form 5500's Schedule C, did anything change between the 2015 form and instructions and the 2016 form and instructions?

Since the regulation requires to perform aggregate test if an employer has a DB/DC plan.

Is this permissible to use forfeitures from the DC plan as a contribution to the DB plan?

Plan document says that, among other options, a participant can elect nearly equal installments over a specified period of years (with remaining payments to a beneficiary if participant dies before full distribution), or non periodic installments.

My base question is, when do payments rise from the level of being nonperiodic to becoming periodic?

A participant wants to receive $1,000/month.  But, he wants it to be subject to change (like if he needs more or less for a specific time period).

Can the participant go the Plan each month for a distribution?  Or would that rise to the level of periodic?  Or am I just reading way too far into this?

Thanks.

can I take a hardship withdrawal to pay my fathers medical expenses?

Plan is a mess.

5 years ago, while dealing w/downturn, company released auditor & TPA as they wanted to maintain plan but needed to reduce costs. For 1st 2 yrs count was btwn 100-120, so they filed as large but no audit. They then went < 100. All this time, they reported no delinquent 401(k) contributions, in spite, as we have found, many.

They want in good faith to clean up the plan, pay lost earnings, submit VFCP, amend last 3 year 5500's (small plan years). But they refuse to pay for auditor to audit those 2 years (2011-2012). We have explained that the VFCP will include those years and we've explained risks. Just contemplating next steps but wondering if anyone has any thoughts.

A TPA has asserted the following. A CB/DC combo plan that requires a 7.5% Gateway covers 6 of 10 ees in their CB plan and 10 of 10 in the PS plan and the average NHCE EAR is 2.5% in the CB plan. The ER PS contribution is 5%.  Question is do the employees who are not in the DB plan get to use the 2.5% avg EAR, or since they are not in the CB plan, they may only use the PS 5% and therefore must up the PS to a full 7.5%?

An employer match forfeiture was allocated based on deferrals instead of compensation.  Document says pro rata compensation.  If using SCP under EPCRS can the correction method be that the participants that received too much have it taken away and given to the participants that should have received more.

What if the failure has been for longer than the last 2 years?  Can it still be correct using EPCRS?

We have a client with 401(k) plan that provides for matching contributions. Under the terms of the plan, the matching contributions should be made by the time for filing of the employer's tax returns, including extensions.  And of course, under Code section 404(a)(6), they have to be made by then in order to be deductible on the prior year's tax return.

In this case, the calculation of the matching contributions for 2016 got bogged down, and still hasn't happened.  But over in finance, they got very efficient and actually filed the corporate return on March 15, without ever requesting an extension.

So, it would appear we may have two problems:

• The company may have to give people earnings on the late contributions.
• The company may not be able to take a tax deduction for 2016 for the contributions.

Obviously, both of these problems could have been averted by requesting an extension (which would have been automatic).  But is there anything we can do after the fact?  It just seems silly that the company will be out a lot of money due to late contributions, when those contributions wouldn't even have been considered late had the company just requested the automatic extension on its tax return.

Hi Everyone,

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Rebecca Giannini

I see plenty of threads on this question and I see that the answer is NO, an employer cannot transfer an entire plan and that each participant must direct the transfer.  Since these threads are outdated, I was just wondering if anything has changed to make it possible for an employer-directed plan transfer? 

In this case, it is a non-ERISA 403(b) plan, if that matters.

I have a new client that has a 401(k) plan that has elective deferrals and match.  After some discussion, it appears that have spoken with an outside consultant who suggested that they added a new comp allocation with each person in their own group.  Based on this set-up, they want to offer the NEC to a very select number of participants in the following fashion.  There are 5 HCEs and 50 NHCEs.  They are going to ask the plan sponsor, annually, which HCEs are to receive the NEC and then gage who and how many NHCEs are to receive an NEC to pass the ratio test.  A quick general example, let's say that 1 HCE says yes.  Based on that, the HCE coverage ratio would be 20%.  Based on that, the NHCE coverage ration would need to be 14%.  Based on that, only 7 NHCEs (14% of the 50 NHCEs) would need to receive an NEC.  This would pass the ratio test for coverage.  The next issue would be 401(a)(4).  Based on this, they could select the 7 youngest NHCEs and provide them with a contribution that would cause them to satisfy the gateway and pass the 401(a)(4) testing. 

While I know that this does "smell" right, I am having trouble finding a reason that it wont work.  There is no reasonable classification requirement as the contribution level can be high enough to pass all testing at the 70%.  Can anyone tell me why this won't work? 

I am sure that I am missing something simple.  Comments are greatly appreciated. 

We have a new client who is a Hospital that currently holds dual status but is dropping the 501(c)3 status.  Currently have a 403(b).     They are adopting a new 457(b) and a 401(a) plan for employer match.     Assets are in 403b individual annuity accounts.   Nothing is changing regarding Employer other than non-profit status.     What are the options to move over those existing 403(b) balances to new successor plan?    Approximately 200 employees are not currently 100% vested in employer contribution.     Exchange or transfer does not apply since they are not going from 403b to 403b.    They do not want to 100% vest currently in the 403b plan.    Want to move match funds and retain vesting schedule.   

An employee's salary is capped at $270k and they've elected to contribute 6%. The payroll system is capping them at 270K * 6% = $16,200 and reclassifying the next $6k above that as catch-up since he's over 50.  However, they are paid biweekly and the only plan-imposed limitation is participants can contribute up to 50% of compensation, so i believe they should be allowed to contribute $18k, barring any HCE limitations. Am i thinking about this correctly? 

The 2 owners in a plan over-contributed to their 401k accounts by $465 each for plan year ending 12/31/2016 even though their W2s state they contributed $18,000.  There were 53 payrolls in 2016.   The refund is being made after 4/15.   Is the Distribution Code a P for Prior Year, or 8 for Current Year?   They are not 50 or older.

Thanks is advance!

For which situations does a TPA get a Form 2848 to represent a taxpayer before the Internal Revenue Service?