In January 2016, a participant obtained a loan to pay delinquent property taxes. As a rule, we require proof of the hardship. That loan has been paid in full. The participant has applied for another loan and the documents show the same unpaid property taxes.

The Plan Document and Loan Policy are silent on this and I just wanted to get some opinions as to what other TPAs would recommend to their Clients about approving or denying the loan.

I have added a new, optional way to see what's new on the message boards.

You might prefer it because it's simple and straightforward.

It's the new "Portal" tab next to the "Activity" tab and the "Browse" tab (at the top of every page). Just click the Portal tab.

The Portal tab generates a list of all topics recently added to all message boards, with a snippet of the first five lines of the message that started each topic.

The list includes links to the full version of each topic if you'd like to read the rest of the initial message and any reply messages. (Of course, the full version of each topic includes a box at the bottom where you can post your own reply message.)

Hope the Portal view is useful to you!

An employer with leased employees sponsors a 401(k) plan and, in addition to that plan, the leased employees are also participants in the 401(k) plan of the leasing organization.  The employer has decided to terminate it's plan and will not be replacing it, but the leased employees will continue to participate in the leasing organization's plan.  Are the leased employees entitled to make a distribution election, or is the employer considered to "maintain" the leasing organization's plan and the balances must automatically be transferred to the leasing organization’s plan?

We have a participant who didn't receive a matching contribution for three contributions at the end of last year, whereas he should have. The document states that the payments of matching contributions should be made on pay-period basis. What is the best way to correct this situation?

Of course, the company will fund the matching contribution, but what's the best way to go about lost earnings? Should the 15% penalty be calculated on lost earnings? What about Form 5330?

Thanks in advance.

A plan can not be amended to allow participants to elect only a percentage of pay as their deferral election, but can a plan sponsor encourage participants to elect a percentage rather than a flat dollar amount when they enroll or change?

Former owner retired in August 2016. Wants to roll entire account to an IRA. He turns 70 in April. His RBD is 4/1/2017. Does he have to take a RMD in 2017, before he rolls over the balance?

Here is a question that I don't know the answer to, I don't do that much work in the HSA field:

Couple gets married in October, 2016. Spouse, who is a Schedule C individual and who had her own HSA, gets added to her husband's HDHP plan at his work. He also has an HSA. Question is whether she could still contribute to her own HSA, for 2016, before 4/15/17.

Thanks very much for any replies!

I have a start-up 401(k) plan excluding all prior service (effective 1/1/17).  Eligibility is 21/1, calendar year plan.  If an employee was hired 10/1/2016 will their eligibility computation period be 10/1/16 - 9/30/17 due to it being their first year of employment?  Or since the plan excludes prior service is the eligibility comp period 1/1/17 - 12/31/17?  Thanks!

Must the auto increases in a QACA take place on the first day of the Plan Year?  The regulations regarding increases are worded that way, but I wonder if it is permissible to allow the increases earlier than the first day of a plan year.

We're taking over a plan that added QACA 1/1/2017, with the first increase scheduled for 9/30.  As such, the increases will always be a little earlier than is required by the regs.

He says the recently issued modified rules on Safe Harbor permit mid year adoption of a Safe Harbor feature in an existing 401K Plan....is that correct????

Employer has an HRA that they are trying to phase out.  The plan has been closed to new participants since 2004.  The employer ceased contributions to the plan as of 12/31/16.  Active participants with balances may "spend down" their accounts over a certain period of time based on their account balance (higher balances get longer to spend down).  Terminated employees forfeit their balance upon termination, subject to a run-out period following termination for expenses incurred prior to termination.  My question is how to administer COBRA for this plan.  Generally, COBRA must be offered for an HRA.  Under general COBRA rules, a qualified beneficiary who elects COBRA will have access to their unspent account balance and be entitled to HRA accruals that active employees get. In this case, there are no employer contributions for active employees - only balances, which are forfeited upon termination.  Are we required to offer terminated employees the option to continue their HRA coverage by paying a COBRA premium that will in essence fund their account going forward?  This would give them greater rights than the active employees - that doesn't sound right? Help!

Plan participant terminated and retired at age 68. They took a full cash distribution and elected to have it rolled over to an IRA.

3 years later it was determined that an incorrect present value rate was used to calculate the single sum value. The participant is owed an additional $6,000 plus interest - in which the plan sponsor will be using IRS self correction program guidelines to distribute this corrective distribution.

Considering that the participant is now 71, is there anything that would preclude them from rolling over this amount?

One of the requirements to mark yes to the small plan audit waiver in the Form 5500-SF is that any person who handles assets of the plan that are nonqualifying is bonded in an amount that is at least the value of the nonqualifying plan assets.  Is this amount determined as of the beginning of the plan year or the end of the plan year?  5500 instructions just say bonded in the amount and doesn't clarifying the amount as of a certain date.  In my case, there were no nonqualifying assets as of the beginning of the plan year, but were acquired during the plan year.

Thanks-

The ADP test is run using the excludable disaggregation method.  The software I use categorized two re-hired employees as otherwise excludable.  Both were 100% vested participants prior to their first termination and entered the plan on their re-hire dates (4/20/16 and 7/13/16). Is the software classifying them correctly?  This plan does not use the rule of parity.

Hi:

 Wondering if any firms will take Participant's 20% Mandatory withholding amount and electronically transmit the payment in excess of $2,500 to the IRS.

Thanks

DPSRich

A small plan's administrator files Form 5500 (not 5500-SF) and, although it does not engage a CPA to audit the plan's financial statements, prepares financial statements and wants to submit them as a part of the Form 5500 report.

How, mechanically, does a filer do this?

99% of my plans are on the Relius volume submitter document, so I am used to having flexibility in testing assumptions. However, I have one plan on a prototype document that actually reflects the cross-testing assumptions of 8-1/2% pre and post and the 1984 unisex table. Am I stuck with using those assumptions or if I fail using them, can I use other assumptions to show I pass?

I just read an article in Institutional Investor, the December 2016 - January 2017 issue, on page 27 regarding the California Public Employees' Retirement Fund entitled "Jerry Brown's Battle".  The fund is $300 billion.   The question was whether the discount rate should be moved from 7.5% to 6.5% immediately or over a 20 year period.

I am not an actuary but, for plans like these, what would happen to the plan if the rate magically increased from 7.5% to 10%?   Generally would the effect of increasing the discount rate 250 BP for DB pension plans have a low, moderate or high impact to the calculations?  How sensitive are plans to discount rate changes?   If moving the rate downward 1% immediately or over 20 years is a huge debate....

I would appreciate thoughts and feedback on this.  

Regards,

Brad

Yes no maybe?

SH Match is 100% of first 4%.  Discretionary match (no ACP SH) is zero on first four and dollar for dollar on the next 96% (i.e. client wants to match dollar for dollar). Assume top-heavy not an issue.  Do we need to test the 2nd match for BRF because the rate of match increases as deferrals increase OR can we "aggregate" the match formulas and say that everyone gets the same match formula?