Does anyone know whether federal law has any help for the estate of a murdered spouse, where the murdering spouse was the ERISA plan participant, and community funds were used to contribute to the 401(k)?  It does not seem right that federal law would allow a murdering plan participant's benefits to be protected from a state claim by the murder victim/spouse. 

tpa firm cannot reconcile 5500 with prior year's trust on a new account.

thinking to file current 5500 with actual opening balance, which would not match prior year's 5500 closing balance, and also without amending prior year's 5500 since cannot reconcile that year's opening balance as well.

curious of other best approach practices to this scenario?

I administer a 401k plan (not SH) that will be top heavy in the current year (2017) based on last years valuation. Can the Employer amend the plan now for last year (after for the YE)  and add a provision to make a discretionary matching contribution for 2016? With the additional matching funds deposited for 2016, the plan would not be top heavy in 2017 and all of the employees not deferring would not get a contribution. Any guidance would be appreciated. THANKS

Long story short, no payments were made on a loan, which should have defaulted in 2015.  This was figured out in 2016.  In the midst of implementing the correction, the participant terminated and opted NOT to repay any portion of the loan.  1099 was issued in 2016.

The IRS is basically forcing us to use the "taxed in year of correction instead of year of default box" which sounds reasonable enough, EXCEPT that that correction requires the plan sponsor to pay for any related withholding.  Does anyone know what that actually means?  Does the plan sponsor make a contribution equal to the withholding to the participant's account?  If the participant rolled over their account, there is no withholding. Is plan sponsor off the hook?

We have a 401(k) plan with a profit sharing new comparability formula.  1000 hours & Last day requirement for the profit sharing contribution.  It is not top heavy.  There is no safe harbor nonelective or matching formula and it passes ADP just fine.  The new comparability formula puts eligible Individuals into their own classification category for profit sharing allocation purposes.  Owner wants the maximum so we gave all eligible employees with 1000+ hours & active on 12/31/16 a contribution of 1/3% of the owner to pass the gateway.  Alas, one of these profit sharing eligible employees terminated in January 2017 so they don't want to give him a profit sharing contribution for 2016.  It will still pass avg ben test & rate groups etc. if we give this otherwise eligible employee a "zero allocation" for the year.  The document appears to restrict PS contributions from those who worked less than 1000 hours and/or were not employed on 12/31 but not actually require a PS contribution to everyone otherwise eligible if one is made for the year.  Are we allowed to give this one employee a zero allocation for 2016 (for whatever reason) and give all other eligible EEs with 1000+ hours & active employment on 12/31 a PS contribution?  What do you think?

I just got off the PBGC website after setting up a premium payment for my clients' initial plan year.

At which point I started thinking that since the client is a husband and wife owned LLC, there may be a possibility they would not be covered (hopefully)??

A participant terminated from a qualified plan in 2016.  She will NOT be 70 1/2 until December 2017.  When she filled out her paperwork to roll her  money to an IRA - she ask that they also distribute her RMD.  The platform rolled it all to her IRA.  The IRA provider is claiming that amount of her RMD (which no one has calculated yet) should not have been rolled and is now an excess distribution that needs to be paid out of the IRA.   She still isn't 70 1/2, but will be by year end so does that muddy the waters?

If they pay it to her - will it be considered her RMD (I guess they plan to calculate it) and can it be split between her ROTH IRA and regular IRA.  There may be more tax issues I haven't though of, but this is enough for starters.

Isn't this for the IRA to deal with  now that it is out of the plan?

1. Generous employer provides post-retirement health benefits to retirees (pre-65 continued participation in group health plan, at 65 payment of Medicare Supplement and Part D premiums). Is there any reason these benefits would not be tax free to the retirees?

2. Same employer also pays premiums for a whole life insurance policy on each retiree until death. Is there any way this benefit can be tax free to the retiree and if not is the proper employer reporting to the employee a W-2 or 1099? 

Thanks

Curious - these days there is usually a lot of talk about merging public schools or school districts to save money. How does this work for their 403(b) plans? I mean, in private employer qualified plan situations, the plans are often merged, so there is an assumption of assets and liabilities, etc. But in a public school situation, there isn't any "trust" to be merged. So does the new school or school district just set up a totally new plan, and the old plans are "terminated" - which is another headache altogether, or are the plans in fact "merged" into a new plan of the new sponsoring school or school district? Many of these plans have individual annuity contracts titled to the employee, so a new school/district can't really "force" them to do anything. If there are employer contributions subject to a vesting schedule, then it seems like this could get very messy.

What would typically (if there is such a thing as typically) happen in these situations?

In order for a divorced spouse get a portion of an employee’s pension through a QDRO, wouldn’t they have to be married during the time the employee earned eligibility and credited service for the pension?

Does a multiemployer health & welfare fund have to provide a requesting contributing employer with an actuarial report or financial statements?  I believe this requirement exists for multiemployer pension funds but I am not sure if the same rules apply to H&W funds.  Thanks!

Must an individually designed profit sharing and 401(k) plan be restated according to the 5 year cycle, if there are no amendments needed? 

The plan was amended and restated in 2010 and incorporated all of the required PPA, Heart, EGGTRA, etc. amendments.  It's already compliant with Windsor and upon a quick review of the cumulative list of changes in qualification requirements it appears to be compliant. However, under the rules re: the remedial cycle in effect at the time the plan should have been restated in 2015 and the plan should have filed for a determination letter.

My interpretation is that the only error was a failure to apply for a determination letter in 2015.  Is this considered a "nonamender" failure if there are no amendments that were failed to be adopted?  Does the plan need to correct through VCP, or simply file for a determination letter at this time?

Any guidance would be appreciated.

Consider this situation (hypothetical, but I hope grounded in enough reality to be useful for our BenefitsLink conversation).

An employment-based retirement plan’s fiduciary seeks a rollover-IRA for default rollovers.

The fiduciary receives three offers.  Each offer presents a form of agreement closely based on 29 C.F.R. § 2550.404a-2(c)(3), including contract promises and warranties on all five conditions.  Every offer represents and warrants that the IRA’s and its investments’ fees and expenses don’t and won’t “exceed the fees and expenses charged by the individual retirement plan provider for comparable individual retirement plans established for reasons other than the receipt of a rollover[.]”

Yet these offers differ not only in their illustrations of the capital-preservation investment’s past performance (which anyhow might not predict future performance) but also in the current fees and expenses.

If the fiduciary does no analysis, chooses one offer, and over the years it turns out to have had the highest fees and expenses and the worst investment performance, is the fiduciary nonetheless protected by the rule’s safe harbor?

(Assume full disclosures, and that neither the selection of the IRA nor investing a rollover into it results in a nonexempt prohibited transaction.)

If the fiduciary has some responsibility beyond what the safe harbor deems “satisfied”, what is that responsibility?

Scenario:

• Plan Fails ADP on Total Group basis, but Passes ADP on a Permissive Disaggregated basis.

• Plan Passes Ratio Percentage K on a Total Group basis and on a Permissive Disaggregated basis.

AND

• Plan Passes ACP on a Total Group basis, but Fails on an Permissive Disaggregated basis

• Plan Passes Ratio Percentage M on a Total Group basis, but Fails on a Permissive Disaggregated basis.

Could this plan rely on the passing ADP and RPK that were prepared on a Permissive Disaggregated basis, while relying on the passing ACP and RPM that were prepared on a Total Group basis?

Two participants in the same plan are getting married and plan to purchase their first home.  Their plan allows for participant loans.  They want to take hardships to use as a down payment on their new home.

Do they have to take loans first?   I am thinking that most lenders won't take a downpayment of borrowed money.  Is there a way around the taking the loan first requirement for this situation?

Thanks!

I have a question regarding a safe harbor 401(k) established in August 2016.  We set the effective date as of 1/1/16 to allow all enrolled employees at 8/1/16 the ability to receive a full year contribution into the plan.  Prior to us establishing the plan, we had two employees terminate their employment (one in February and one in April of 2016).  Now our Administrator is saying that because our effective date is 1/1/16, we have to provide a safe harbor contribution to the two terminated employees even though they were not employed when we established the 401(k) plan.  Does this sound right?  It does not make sense to me.  Any help would be appreciated.   

A client sponsors a 403(b) plan for its employees.  However, there are no HCEs who are eligible to participate in it.  Does the plan still have to satisfy the universal availability requirement?

This has probably been asked before but if a Company President directs the handling of the company retirement plan to his son who's the investment advisor with a national investment provider and receiving compensation, would this constitute a conflict of interest or prohibited transaction?

Tampa Bay area 403(b) needs someone to handle VCP filing.  Referrals very much appreciated.  Thank you!

Hello,  I was wondering if anyone knows of where you can get free CE credits for ASPPA/ERPA requirements besides from the e-tutor series at John Hancock.    We were members of Pension Podcast before Cheryl Morgan's untimely death.  With the cost of the annual conference being what it is, we are looking for a lower cost/free option that might be available for credits. Thanks.