From the W-2 instructions, I learned that an employer's contribution (including an employee's contributions through a cafeteria plan) to an employee's HSA is not subject to federal income tax withholding or social security, Medicare, or railroad retirement taxes (or FUTA tax). 

I understand that 415 compensation is grossed up to account for elective deferral amounts contributed to a cafeteria 125 plan but what about if the employer contributes to the HSA on behalf of the employee.  Is 415 comp grossed up for the employer contribution to the HSA? And ,if the answer is no, then I assume the plan document would not have to be amended to exclude the HSA employer contribution from the definition of Plan Comp for allocation purposes (SH & ER) because it is not comp for plan purposes.

Total Comp is defined as W-2 Comp and Plan Comp does not currently exclude deferrals / cafeteria. 

Greatly appreciate your input.

QNPG

We are making a deposit to a plan that contains a safe harbor matching source.  Can the corrective QNEC be deposited to that source as opposed to setting up a separate QNEC source?  They have the same w/d restrictions, correct?

Starting with the fact that 1.401(k)-5 is "reserved" so that there is not necessarily any clear guidance...

Let us assume that both plans operate on a calendar year basis. Let's further assume that both businesses are corporations. Say Corporation A has a SH 401(k) plan. Corporation B has a non-safe harbor 401(k) plan. Corporation B buys Corporation A's assets, and all of A's employees come to work for B. B wants to assume the assets and liabilities of A's plan, and merge A's plan into its own plan while still preserving the safe harbor status of A's plan for the year.

I'm not sure I see any way to do this. I think corporation A's plan could be TERMINATED, and thus preserve safe harbor status, but I don't see how it would work in a merger of the plans. Thoughts?

If instead it were a stock sale, I don't see that it alters the outcome. Thoughts?

(If B's plan were a safe harbor plan of the same type, then I think a good argument might be made that the plans could be merged while preserving safe harbor status, but that's another issue altogether.)

Mr. Smith had a one-participant DB Plan which was over funded.  The DB Plan was terminated in 2014; all assets were transferred into a 401(k) Plan as a qualified replacement plan.  The over-funded amount was credited to a suspense account.  In 2015, a portion of the suspense account was allocated to Mr. Smith with the intent of allocating all of the suspense account within 7 plan years.  

Mr. Smith only paid himself each year on 12/31.  Contributions and suspense account allocations were based on that single pay date. 

Mr. Smith dies in 2016.  He had not taken any pay, therefore no allocation from the suspense account could be made.  Therefore any remaining amounts in the suspense account will now be subject to the 50% Reversion Tax.  

Is this correct? 

Thanks for your help.

From the W-2 instructions, I learned that an employer's contribution (including an employee's contributions through a cafeteria plan) to an employee's HSA is not subject to federal income tax withholding or social security, Medicare, or railroad retirement taxes (or FUTA tax) but are these amounts included in the definition of 415 comp? 

Plan sponsor contributes an employer contribution to the HSA on behalf of the employee but does not want to include this employer contribution in the definition of plan compensation (SH and ER). 

Total Comp is defined as W-2 Comp and Plan Comp does not currently exclude deferrals / cafeteria.  To exclude the employer contribution to the HSA from Plan Comp, is an amendment to the plan necessary? 

Greatly appreciate your input.

QNPG

Are employee and employer contributions to an HSA grossed up for 415 plan compensation purposes?  I am not too familiar how contributions to these arrangements affect plan compensation. It looks like they can be run through the cafeteria plan - if so then I assume they would be considered Section 125 pre-tax amounts and then gross up the 415 compensation? Another way to set up an HSA is like an IRA and then take the deduction on your 1040. In this way, I assume the compensation is also included as 415 compensation in the employee's 401(k) plan?  If an employer wants to exclude them, I think they have to be excluded under the plan compensation definition in the document?

Any suggestions to assist me would be greatly appreciated!

Are employee and employer contributions to an HSA grossed up for 415 plan compensation purposes?  I am not too familiar how contributions to these arrangements affect plan compensation. It looks like they can be run through the cafeteria plan - if so then I assume they would be considered Section 125 pre-tax amounts and then gross up the 415 compensation?  To exclude these amounts under plan compensation, I assume you need to exclude them in the plan document?

Another way to set up an HSA is like an IRA and then take the deduction on your 1040. In this way, I assume the compensation is also included as 415 compensation in the employee's 401(k) plan?

Any suggestions to assist me would be greatly appreciated!

ERISA Section 105 requires benefit statement to include a statement of "vested percentage of such benefits (or the earliest date on which benefits will become vested)".  Do you agree that the "earliest date" is the date on which a participant becomes partial vested?  That is, on a 2/20 vesting schedule, does a participant "become vested" when they become 20% vested or when they become 100% vested?

Thanks

Guy bought a franchise with a ROBS 401k and wants to terminate it.  Can the stock get rolled over to an IRA? I think not, because if it could, there would be no such thing as a ROBS you would just do it from an IRA.  I thought the whole point was to take advantage of the employer securities exemptions available in a 401k plan.  Any specific sites (cites??) you can provide would be appreciated!

Hi.  I work for a governmental entity (at the municipal level).  My salary information is public information and subject to any citizen's Freedom of Information Act request).  Are my contributions to retirement plans (403(b), 401(a), and/or 457(b)) included in that information that is FOIA-able?

Thanks.

Hi.  I work for a governmental entity and participant in a governmental 457(b) plan.  I make elective deferrals into the 457(b) plan.  How do those deferrals impact my future social security benefit?  For example, if my salary is $100k, but I defer $15k into the 457(b), are my reportable earning to SS the $85k?  I just want to make sure that I am not suppressing my future SS benefit by deferring into my 457(b) account.

Thanks.

I have a participant who turned 70.5 in 2013, but at that time he wasn't eligible to receive his pension.  The 2016 Plan Year was his fifth, making him eligible to start receiving a pension (though he is still actively working and has already accrued another year of service in '17)..

So what would the required start date be for his RMD? He wasn't eligible on the 4/1 following the year in which he turned 70.5. 

Thanks in advance!

Any reason a medical plan offered through a non profit (nongovernmental, nonreligious) association would not be considered a Plan Sponsor and therefore be required to file Form 5500?  Association in question is unhappy at the $4,000 DFVC penalty and would rather do nothing. Yes the potential consequences have been explained.

On what line of Form 5500, Schedule H would you report the value of a private hedge fund?  Investors are not partners, the fund is not a registered investment, it is not a trust. Would you report it as a joint venture?

Thanks for sharing your thoughts and experience.

Hello All -

Longtime lurker, first time poster.  I really appreciate all of the insight from this forum.  My question:

Canadian based company has a few US Employees, they are Sales People located throughout the US.  They want to provide similar benefits to their US Employees like they do to their Canadian Employees.  They are inquiring about a startup 401k Plan.  Assuming they have an EIN would it be feasible to create a start-up 401k Plan for these employees?  I don't see a reason why they can't but I have zero experience with a Foreign Company setting up a new 401k Plan so I want to make sure I am not missing something.  If there is an alternative suggestion to a 401k I would be all ears as well.  Thank you very much.

Participant contacts the DOL stating that they deferred more than the Employer has credited.  DOL starts an inquiry, which is handled by the accountant.

Accountant claims that DOL has finished the inquiry.  DOL has not sent out any correspondence accepting what accountant submitted.

Accountant claims that DOL only sends out correspondence when there is an audit, NOT when a Participant makes a claim.

Is accountant correct?

I am trying to understand the comparability rules for HSAs, particularly as they apply to former employees and have some pretty basic questions. 

Under the Final Comparability Regulations for HSAs CFR § 54.4980 Section 1-7, employer contributions to an HSA are not subject to comparability testing if the contributions are made through a cafeteria plan “if under the written cafeteria plan, the employees have the right to elect to receive cash or other taxable benefits in lieu of all or a portion of an HSA contribution (meaning that all or a portion of the HSA contributions are available as pre-tax salary reduction amounts), regardless of whether an employee actually elects to contribute any amount to the HSA by salary reduction,” and they are subject to the comparability rules if made outside of a cafeteria plan. (54.4980G-5, Q&A-1)

• My first question is whether HSAs are ever not offered through a cafeteria plan?  This is not the relevant question, but I would like to know if that ever happens.

   

• Former employees may receive contributions from their former employers, and former employees are a category that must be tested under the comparability rules if they apply.
  
  (a) Categories. The categories of employees for comparability testing are as follows … (3) Former employees (except for former employees with coverage under the employer's HDHP because of an election under a COBRA continuation provision (as defined in section 9832(d)(1)). (54.4980G-3, Q&A-5)

   

  Also, “An employer that contributes only to the HSAs of former employees who are eligible individuals with coverage under the employer's HDHP is not required to make comparable contributions to the HSAs of former employees who are eligible individuals with coverage under the employer's HDHP because of an election under a COBRA continuation provision (as defined in section 9832(d)(1)). (54.4980G-3, Q&A-12).

              Am I correct that if the HDHP is a retiree plan, the comparability rules apply and if elected  through COBRA, they do not apply?  So, subject only to discrimination testing, the employer can choose to make HSA contributions of differing amounts or only to some but not all former employees under COBRA?  Finally, is there any limit as to how long employers can continue to make contributions to former employees, either under COBRA or the comparability rules?

I have only a couple 401(k) plans with auto-enrollment, so now that a 150-life NFP with an ERISA 403(b) asked me to add auto-enrollment to their plan, I figured I should ask around to see if there is anything that I specifically need to be careful of implementing this in a 403b.

I figure they will go the EACA route because they are not going to want to do the required QACA contribution, and they sound like they want the ability to let the participants do the 90-day withdrawal.  Following the Relius chart I'm linking below, there doesn't seem to be anything else that would pose an issue in this situation.  Any tips or advice would be appreciated, thanks.

http://www.relius.net/news/pdf/Form376ACAcomparchart.pdf

So, employee defaults on a loan, and no 1099 issued for deemed distribution.

Payer penalty for failure to issue 1099 (let's suppose it was defaulted in 2016) before August 1 (from memory) is I think $260.00. I can look that up. But here's my question - since participant didn't get 1099, taxes filed incorrectly, since participant didn't "know" it was a distribution.

How do you typically see this handled? By that I mean, does the employer/plan administrator/TPA/guilty party pony up any expenses top reimburse the participant for refiling expenses, if any, and interest/penalties? Could be expensive if it happened years ago...

this is the report I have been using

SSA report

(saved as excel file)

then copied and pasted into the FT William

8955 Sample

which imports quite easily.

of course, no guarantees use at own risk, but I have been running this for years.

this reports people an A the year following termination not the year of termination.

if someone went from active to ineligible (e.g. person was active but now excluded class) they will show as an A, it will indicate "Verify Data", you might have to delete them from the report.

If terminee is 0% vested it should show person as a D and  indicate 0% vested. Since I am not sure if the person was ever reported as an A (if it was a takeover) they will show up on the report as a D. of course such people should forfeit.

8955Sample.csv

notes on SSA report.doc

SSA .rpt