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.

I have an employee that elected Dependent Care FSA for 2017, has had amounts withheld and has processed claims with our provider but just realized that as part of his divorce decree he and his ex switch year to year who covers and claims their child so he is not eligible for the DC FSA. 

How do we go about refunding him for the amounts withheld and him repaying the amounts he was reimbursed for invalid claims?

A 457(b) plan requires all employees to make a mandatory contribution of 7.5% of compensation. The employer didn't take the mandatory contribution from a new hire's pay beginning 6/2016. The plan document does have language that the employer can make corrective contributions to the plan.

Since employer contributions are added together with employee contributions towards the 457(b) limit, would this also apply to a corrective employer contribution?  

Plan is prior year tested.  Last year, no NCHE contribs, no HCE.  2016 1 HCE and some NHCEs.

HCE is over 50, deferred $2,500.  ADP test fails, but no refund, re-characterized as catch-up.

He received a $600 match.  ACP test obviously fails.

BUT:  do I forfeit the match b/c the ADP test failed and all the match is attributable to deferrals anathema to the ADP test?  Or, do I refund the money, as the ACP test fails?

Is anyone making the shift to self-certification?  Has anyone spoken with auditors about this (I mean CPA auditors)?

http://benefitsbryancave.com/irs-views-on-self-certification-of-financial-hardship/

When calculating the covered comp for the 25% deductibility, do you use pay as a participant or full year pay for mid-year entrants and when benefits are calculated on partial year pay?

For example, participant paid $50,000 in 2016, but entered the plan on 7/1 and made $25,000 thereafter.  PS is 5% of $25,000.  Am I using $50k or $25k when calculating the max deductible tot he ER?

Plan uses Safe Harbor Nonelective 3% but excludes Key Employees and HCE's.  For 2016, the plan is Top Heavy but there are no NCE's covered under this plan only HCE's and Key Employees.  Does the Top Heavy minimum have to be given?

Caesar didn't get his done on time and look what happened to him.

So beware the Ides of March!

the CPI factor was released today for Feb = 243.603

so if it stays at that level for the next 7 months, the deferral limit moves to 18,500

the other limits will jump if the avg for Jul  Aug  Sep = 244.5 (rounded)

with the Feds expected to raise interest rates, with 7 months to go of CPI factors, I'm guessing there will be an increase in all limits next year. of course it is still early....