What are your thoughts on COBRA notice failures that are not willful and are corrected within 30 days, so no excise tax, and still reporting $0.00 excise tax on Form 8928?  

I am concerned because if we do not file one then no statute of limitations will apply.  So I am considering filing the Form with $0.00, but have multiple (many, many) failures.  Do you file a separate Form 8928 for EVERY participant that had a failure?

Thank you for your help!

A nonelecting church plan sponsors a 403(b) Plan.  All employees are eligible and there is one platform provider.  Much nicer and cleaner than most 403(b)s!  Oone of the pastors would like to have the church start a separate plan with a company dedicated to retirement advice specific to clergy, which appears to have a MEP for church plans.  The only reason for this change seems to be that the pastor has personal investments with this company already.

The church would like all employees to be able to choose between the new plan and the existing plan.  I understand that 410(b) does not apply, but there are still pre-ERISA coverage requirements.

Questions:

1) Can each plan exclude employees covered under another plan sponsored by the church?  Would it need to be specific as to who is covered under each plan or is it okay to allow participants to choose?

2) If the new plan is set-up, can this pastor move his existing 403(b) Plan assets?  There is no distributable event that I can see, but is there a way to do a 403(b) plan to plan transfer?

Thanks,

Kathryn

I work at a TPA firm and one of the recordkeepers that we use is having their clients amend their plans to use elasped time vesting, employment anniversary to anniversary. .   Current adoption agreement says vesting is based on 1,000 hours in a plan year.   The problem with the 1,000 hours in a plan year they say, is that if a participant works 2,080 hours in a plan year, they will receive 2  years of vesting for that plan year, so this plan has a 3 year cliff schedule, the recordkeeper is saying a participant will 100% vest in 1 1/2 years.   Is this something new that I missed?        

Calendar year plan requires employment on last day of the plan year.  The employee works on December 30, 2016--a Friday.  Was the Participant actively employed on the last day of the plan year?  Seems we can go either way with this one...

Just wondering - suppose several school districts, (so non-ERISA plans) who all sponsor 403(b) plans, merge their plans into one 403(b) plan, effective in, say, May of 2017, using an IRS pre-approved prototype - should be available by then...

Do all of the individual plans have to be restated retroactively to 2009? I presume not, but I've never thought about it! Could get messy screwing around with 4 different plans with different provisions going back years and years.

I've got a plan with a non-safe harbor discretionary match that is calculated per payroll with no true-up.  Halfway through the year, the plan sponsor now wants to cut the rate of the match in half.  Is there anything that would prevent this?  I don't see anything in the plan document that discussed this specifically.

I know they'd still have to pass the ACP test, so if this is a ploy to lower the match after the HCEs have maxed their deferrals, they'll just fail that anyway.  Is there anything else that could come into play?  Thanks.

Only contributions are Employee Deferrals and Employer Safe Harbor Match, our documents ask which test the safe harbor is intended to satisfy, just ADP or both ADP/ACP.

Our old documents from McKay Hockman noted that the ACP was automatically satisfied if the only employer contribution was a safe harbor match.  Was I correct in drafting the safe harbor match with only the ADP safe harbor selected to be satisfied and assuming that ADP/ACP election was only for a safe harbor match with additional discretionary/fixed match or after-tax contributions.  Wanted to know for our new docs.

401k Plan with PS only  (no match)  Client wants a design to benefit some more than others.

NO HCE's by ownership or compensation.

Want Group A to get 10% PS    

Group B to get 5% PS

Group C to get 0% PS

1.  What do I have to look at?  Does it matter how many are in each group?

2.  Is it better to exclude Group C (smallest number of EE's) from the plan by definition or just exclude them from the PS by definition.

No HCE's in plan, plan is not Top Heavy.

We're dealing with a situation in which a participant named his spouse as his beneficiary of his 401(k) plan.  He later divorced, but did not at that time change the beneficiary designation.  (Under Egelhoff v. Egelhoff, 532 US 141 (2001), the divorce would not itself change the beneficiary designation.)  However, after he died, his sister sent a signed beneficiary designation in favor of the sister.  The plan is now asking us whether they can honor a beneficiary designation signed by the participant, but not received until after the participant's death.  The plan document is silent on the issue.

My gut reaction is that the plan should simply refuse to pay until this is straightened out, and file an interpleader action if one of the parties sues for benefits.  But has anyone seen any guidance as to whether a beneficiary designation not received until after death can be honored?

Our Benefits in the News web page displays previously published news items as always, but now you can view them in a new, optional compact format -- you can hide the excerpts, at your option. Just look for the "Hide excerpts" checkbox. (The full list, which includes excerpts, continues to be the default view.)

Remember that you can limit the list to a particular type of news item (in either the compact or full format), such as Official Guidance. Other types are Guidance Overview, General News, and Opinion. Just use the checkboxes at the top right corner of the list.

And you can narrow the list further to only show a particular type of news item that concerns a particular kind of plan. For example:

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I just saw a release from last week where Datair says they have received an Advisory letter.

We haven't heard a peep yet, but presumably it is coming soon.

We have a NQDC Plan.  When a distribution comes due, the Administrator sends the money we have set aside to us, we cut a check to the participant, and we issue a W-2.

The Administrator said it can cut the check to the participant itself, but since the check will be coming from them, they will have to issue a 1099.

I've always understood that NQDC distributions are to be issued with a W-2, since the money represents compensation earned from an employer for work performed.  Would it be appropriate to allow the Administrator to cut the check and issue a 1099?  Can the Administrator legally issue a W-2?  

Another option might be for the Administrator to cut the check, send any withholdings to us, and then we issue a W-2 from that point.  But the point of the change to to have the Administrator take over the entirety of the distribution process, so that is not ideal.

An employer's plan year is 10/01 - 09/30. However, their medical and life policy year changed to 12/01. How do I report this on the Schedule A? The system that we use will not accept the policy year because it extends beyond the plan year end date. I really hope my question makes sense. Thanks in advance for the help and advice.

As of May 1st, 2017, my status will be RETIRED.  And many will say it's about time.  It has been a looooong fun run folks.

A profit-sharing retirement plan provides as its only form of distribution, whether for a retirement distribution or a death distribution, one single-sum payment of the whole account balance.

A participant dies before receiving a distribution.

The participant, with her spouse’s consent to meet ERISA § 205, had made and delivered to the plan’s administrator a beneficiary designation:  “ABC Bank, N.A.”

The plan’s administrator receives a claim signed by a person identified as a trust officer of ABC Bank.  The administrator does not doubt the claim’s authenticity or genuineness.  The claim asks the plan to pay the bank (and does not request that the plan treat the payment, or any portion of it, as a rollover).

In the envelope with the claim form is a copy of a 13-page trust document and a transmittal letter that says:  “Following 26 C.F.R. § 1.409(a)(9)-4, Q&A-6(b)(2), we enclose a copy of the participant’s trust document.”

The plan’s administrator believes it need not read the participant’s trust document.  Rather, it believes its duty is limited to satisfying itself that the claimant is the beneficiary the participant named (and directing the plan’s trustee to pay that beneficiary).

The plan’s administrator is thinking of sending ABC Bank a letter informing the bank that the administrator did not read the trust document the bank furnished, and promptly destroyed it.

BenefitsLink mavens:

Must the retirement plan’s administrator read the participant’s trust document?  Or is it okay to ignore it?

Assuming the administrator had no duty to read, and did not read, the participant’s trust document, must the administrator keep the document in the plan’s records?  Or is it proper not to keep a writing the administrator never considered?

About the proposed letter to inform the bank that the administrator did not read, and no longer can read, the participant’s trust document, is this a good idea, or a bad idea?

On all three questions, what is the reasoning for your answer?

Hello,  Client was divorced 5 years ago and the divorce decree awards a portion of Jax police and fire pension as property settlement award.  Now, govt ee is retiring and not sure if can use IDO to claim divorcee's share? An attorney said use IDO, but this is property settlement award, not alimony or child support. Pension representative says use IDO. I think need to get order reforming this property settlement as permanent nonmodifiable alimony and use IDO. Can we do that? I am an attorney trying to help my client. But as a newbie attorney (yet old to defined contribution plans), not sure who to ask about what I do with a government plan question? Where can I go to find answer? Or, who can I reach out to for help in this divorce case?  Thank you, Susan

I inadvertently deleted a topic in my attempt to simply delete a blank response

The topic dealt with Derrin's book on e-bay.

my bad ooops

Can someone tell me where I can find the rule that states you have to have a blurb on the participant statements is the PS is integrated with Social Security?  (The reg and/or where to find it in the EOB)

Does it only apply to participant-directed accounts, or pooled accounts, too?

Thanks in advance.

Subject company has filed 5500 as a small plan for 2013, 2014 and 2015.

They recently discovered that a division of the company was not offered the opportunity to participate in those years. 

The company has done a self-correction for the failure to cover those employees.

If participant counts had correctly included the missed employees the plan would have been considered a large plan for 2013, 2014 and 2015.

Should the company file amended 5500's for 2013, 2014 and 2015 and hire an independent auditor to audit the Plan for those years?

This doesn't fit any fact patterns described in the voluntary correction programs, so how should they proceed?

Quick question:    Can a SIMPLE IRA balance be rolled into a 401(k) balance?