Let’s say I have a plan sponsor with 3 divisions and 250 employees.  At one time they had a DB plan for the entire company, but the plan was closed several years ago.  The plan now contains 52 active employees and is expected to drop below 50 at which point it will fail 401(a)(26).  The plan is a safe harbor 1% of pay/yos.  There are other HCEs outside the plan and the plan and the plan satisfies 410(b) using the average benefits test.  We don’t need to do 401(a)(4) rate groups because the plan is a safe harbor.  I think we are good so far.

In an effort to avoid freezing the plan (they just feel obligated to provide the promised benefit), they are contemplating bringing in additional participants.  They are thinking about adding a cash balance benefit for the salaried employees.   This would add another 40 people to the plan.   Although this would now include all of the HCEs, it would cover enough of the NHCEs and would still satisfy 410(b) using the average benefits test.  My thought is to structure the cash balance formula in such a way that it would satisfy the cash balance safe harbor.

If I have 2 safe harbor formulas inside the same plan, can I continue to avoid the 401(a)(4) rate group testing?  In other words, can I disaggregate the plans and claim they are both safe harbors, even though they are inside the same plan?  I know I also need to think about rights & features, but I want to get through the testing issues first.  Would each component plan need to satisfy 410(b) on its own in order to call them both safe harbors under (a)(4)?

We have an employer who wants to freeze their current 457(b) plan and start a new 457(b) plan.  The employer also wants to allow participants to roll their account balances from the current 457(b) plan into the new one.  The employer is tax exempt (not governmental) and the plan-to-plan transfer rules in 1.457-10(5) require that "the participant has had a severance from employment with the transferring employer and is performing services for the entity maintaining the receiving plan."  (Interestingly enough, there are specific rules for plan-to-plan transfers in a government 457(b) plan within the same employer).

This would seem to ruin our client's plans.  Is there any other way to get money from the current 457(b) plan into the new 457(b) plan?  

I have a plan that had a large prior year asset lost. It is a beginning  of the year valuation. Actuarial assets<.6*FT. Does this imply in the absence of additional contributions before 10/1 to achieve a 60% FTAP that there is no normal cost for the plan year due to the 436 accrual restriction? I think so but don't do that many boy vals.

Just when you figured out how to navigate the old website, there is a new design, effective today, https://www.irs.gov/

We just set up a plan for a real estate agency, covering staff.  Now the owner asks if we can include 1099 agents.  My initial reaction was no, but then I thought "why not" if we just add them as participating employers.  We'd create our own little MEP.  Testing is separate for each employer.  Not a problem (?) if some sign on and some don't, right?  Am I missing anything obvious that makes this not work?

Company X has a 401k plan.  Partners in X have frequently caused the company to make profit sharing contributions.  With new comparability, the company can make varying profit sharing contributions for different participants as long as the testing passes.  Right after a year ends, a partner leaves the company.  The former partner is claiming that he has a right to have what was a projection of profit sharing contributions prepared and circulated before he left the company.

The plan document speaks of the company giving itself as the plan administrator a written notice, designating the allocation.  That's not yet happened.

Do you know of case law, IRS or Dept of Labor rulings that suggest when a company has acted to the point that its profit sharing discretion is exercised and the company is then obligated to make a profit sharing contribution? 

IRS has brought to our attention that two 1099Rs were filed for an individual.  They both contained the same data ($21,000 distribution).  It was a cash distribution and the individual reported both amounts as income from both 1099Rs, so he reported more than he should have.  Two Form 945s were filed as well, both showing $4,200 paid in taxes.  The IRS is looking for the other $4,200 since they only received $4,200 and were expecting $8,400 (based on both 945s).

How would you go about fixing this on the 1099Rs?  They would have to file a corrected form, but what figure would be used?  If we show "$0.00", since there were two forms, could that be interpreted as he had no distribution at all for the year?  Is there a fix or would it be best to try to work with the IRS via reply to their correspondence?  Same with 945?   

Thanks

So far, it seems there are two kinds of claims that an individual-account (defined-contribution) retirement plan's fiduciary breached its responsibility in selecting a plan's "menu" of investment alternatives for participant-directed investment.

One kind asserts self-dealing.  For example, plaintiffs asserted that ABB made suboptimal investment selections because this resulted in Fidelity's willingness to lower its fee for services used for purposes other than the retirement plan.

And the "proprietary"-funds cases assert that a fiduciary of a retirement plan for employees of a business that's in the business of serving as an investment manager selected "house-brand" funds because the manager had a compensation interest or business interest in the retirement plan's use of those funds for which the manager gets a fee or cares about whether the manager and its employees are seen to "eat their own cooking".

Another kind asserts that the plan could have bought essentially the same investment at a lower expense.

Has anyone seen a lawsuit that alleged a fiduciary selected an investment alternatives that was weak on its investment merits without either kind of claim described above?

I have a controlled group of two plans. Plan A has deferral and profit sharing and plan B is deferral and match.   They have always passed combined 410b testing including the participants from the other plan.       They use top paid group so HCE's vary from year to year.   Some years there are none in Plan B and some years there are two or three.    Some years the ADP test fails separately, but combined with the two plans, it will pass.     

If Plan B would go to a safe harbor match,  how does that affect Plan A and the ADP testing.   Is it even allowed? 

I have a client who has 401k plan and realized in 2017 plan year that they missed deferrals for a participant in 2015 and 2016 plan year. Now they have calculated missed deferrals and match amount along with earnings.

Question is:

1. Can this QNEC amount be included in ADP\ACP test?

2. If yes for above, can 2015 and 2016 QNCE amounts be included in 2017 ADP\ACP tests or only can be included in their respective plan year testing. In this case as they have already completed 2015 and 2016 testing thus these amounts are not included in any testing year, is it ok or IRS has some guideline for the same. 

Prior year tested plan failed ADP and corrective refunds to HCEs were issued timely.  It was then discovered during form 5500 financial audit processes that the employer neglected to apply deferral elections to year end bonus.  Employer will make 50% QNEC (plus earnings) to those affected for missed deferrals.  Some of those affected are HCEs.  Can I rerun the ADP test excluding altogether the HCEs whose elections were not properly implemented?  I still get failing results - with refund amounts less than those actually issued. 

We have an employer with a 457(b) plan that currently has a distribution option of "life certain."  They want to get rid of this option and instead offer 10 year certain and 20 year certain.  Is this allowed?

They also want to freeze their 457(b) plan and allow participants to roll over ALL their money to a new 457(b) plan (there is no option to move just some but not all money).  Is this allowed?

Thank you in advance!

If this is not allowed, feel free to remove it.

I have had a 457 plan with ICMA for the last 22 years through the city I work at. I have contributed $90,000 into that plan over the last 22 years. I currently have $133,000 in it. ICMA is a non profit but is charging 3-15 times the national average in maintenance fees. We were told if we followed their plan, we would have hundreds of thousands of dollars in our plans by this point in time. Do I have any options? 

My client is a 501(c)(3) organization that maintains an ERISA 403(b) plan.  It has never filed Forms 5500 and has never purchased a fidelity bond, as required by ERISA Section 412.  I will be filing the client's 5500s under the Delinqauent Filer Voluntary Correction program.  However, I am reluctant to go further until it corrects for the failiure to have an ERISA bond.  I asked the client to obtain a quolte for an ERISA bond retroactive to January 1, 2009, but they were   told that the bond could only made effective on a prospective basis.  What do I do about 2009 - 2016, when no bond was in place?

Has anyone seen auditors making any disclosures about this in their financial statements?

http://www.great-westclassaction.com/

I worked over the course of 19 years with this company and although the information pertaining tomy benefits say I have 15 vesting credits and a total of 7.82 benefit credits....only the final 2 years have been awarded benefits. May 1986 through July 1993 and then April 1999 through November 2000. Only 1999 and 2000 have any benefits awarded AAAAHHHHGGGG!!!!

I recently read about a defined benefit pension plan in which the employer makes the contributions but the employee gets the credit. The acronym started with H. I am tryng to find this again but Mr. Google is not giving it up.

Help!  I need to obtain the text of the IRS' Q&A 36 from the 2000 ASPPA Conference held in Washington DC.  If you have it, please send me a message and let me know how I can get in touch with you!  Thank you.   

We have a client who wants to rollover some SEP IRA annuities into their DB plan and are asking if these accounts can receive new or existing DB monies.

Technically, I see no problem; however are there any rights or features to either type of money they would be giving up by co-mingling in one investment?

Company A sponsors a Simple IRA. Company B sponsors a safe harbor 401(k) Plan. Company A acquires 100% of Company B through a stock acquisition in July of 2017. Both companies want to maintain their plans as is: Company A employees participate in the Simple IRA and Company B employees participate in the 401k.

I'm aware of the transition rules for coverage testing but can the separate plans continue as is past the transition period as long as they meet coverage?