What happens to the existing loans when a plan changes loan provisions? Let's consider these scenarios:

1) There were 2 loans allowed in the past, but now the plan is amended to allow only 1 loan. Can participants who had 2 loans outstanding prior to the amendment still maintain both loans?

2) What if a participant with 2 loans wants to refinance them? Can he do that even though the plan only allows for 1 loan now?

3) What if the participant had loans outstanding and the plan was amended to not allow any loans. What happens to the existing loans? Can the participants still refinance?

Thanks in advance.

On occasion we take over TPA services from another TPA firm in the area.  The prior firm does not cooperate with the transition and in some cases, the plan cannot locate any prior year reports that provides crucial information related to plan assets, census and receivables.  Is there any formal organization where the plan can file complaints? 

Non-governmental entity created a 457(b) plan 5 years ago, but did not ever tell some employees who were eligible for it that they were in fact eligible.  There are no employer contributions, only elective deferrals.  Is there anything to correct?  If so, what would the correction be?  I am not sure about following 401k correction procedures for missed deferrals.

Basically a few higher up employees could have made elective deferrals, but werent aware that they could.

I'm a little new to 401k, and my company has encountered a situation in that a certain group of employees have decided to unionize. Currently, every employee in the company has the same 401k structure (elective deferral, company match, safe harbor, profit sharing). Should the unionization go through, leadership will likely not want to give them any more than they have to. If they are to be under a different structure (say the company doesn't want to give them safe harbor and profit sharing), can this be done and would it require a separate plan or just a change to the plan document?

Thanks

Ee is a new hire in 2016 and thus an NHCE in 2016.  Allowed into the Plan early.  Today we want to amend the Plan retroactively to allow him in.  The problem is he made $130,000 in 2016.

He would have entered 1/1/17 absent the EPCRS amendment, so the amendment would only affect the period of time that he was an NHCE.

What do you think? Can we use EPCRS SCP for the retro amendment to make him eligible in 2016?

Can SIMPLE IRA be merged into a 401(k) mid-year. I know the SIMPLE IRA cannot be terminated mid-year, but can it be merged mid-year into a 401(k) plan. If not, would it be required to wait until the end of the year, then terminate the SIMPLE IRA and rollover the assets into the 401(k) plan.

Thanks in advance.

One of several participants in a 401(k) plan is age 50+ and has compensation of $28,000.  He is an HCE and defers $24,000.  The company will be making a profit sharing contribution - will he be able to be allocated $10,000 as a PS contribution ($28,000 comp + $6,000 catch up - $24,000 deferral), or will he be limited to only a $4,000 contribution due to the 100% of comp 415 limitation?  

We have a plan that failed ADP (deferrals only).  The HCE is due a corrective distribution as it stands of $7376.78 plus earnings.  They are also Top=heavy and the amount due for TH is $23,300.05.

The QNEC required to pass the ADP is $27101.19

IF they want to put in the $27101.19 - as long as it is vested 100% - can this count for both TH and meeting ADP test and avoid the corrective distribution? 

Would LOVE feedback!!!!

All deferral elections are made online through payroll company software. The payroll company claims it is not possible to have different deferral limits based on date of birth, and therefore requires separate elections for deferrals and catch up contributions. 

Participant elected to defer 7% of pay. That would have yielded a total contribution of $18,740.03, but for the payroll company requirement that catch up be elected separately. (It is not yet known if the participant intended to make a catch up contribution.)

Does this require a correction because less than 7% of pay was withheld? Or is it permissible to require a separate online election for catch up contributions?

Governmental DB plan is changing from 9/30 to 12/31 FYE. What are financial statement requirements with respect to the period 10/1/x0-12/31/x1? Are they required to complete financial statements for the FYE 9/30 and create a short FY ending 12/31 or can they have a 15 month FY?

In January 2016 the Employer contributed 5,000 as deferral for a HCE individual that was never withheld from his pay.  We caught it at year end comparing the total deferrals for the year to w-2's. 

To correct, we need to take the $5,000 from his account.

I assume we need to take earnings also . 

If we use the 5,000 as a part of the discretionary matching contribution at year end, what do we do with the earnings?  (we are estimating about $700)

I cannot see how their accounting department never caught this.

Employee took out a 401k loan in April 2016. Loan repayments were never entered into payroll due to oversight on part of payroll coordinator. Loan defaulted due to nonpayment per plan. Employee says she never received notice of any kind regarding the default until receiving the 1099.  Employer wants to correct the default so that employee doesn't have to pay the taxes. Can they correct through VCP and where can I get info on how?

I'm looking at Rev. Proc. 2016-51 6.07, but not finding it to be much help.

Thanks for any assistance you can provide.

ok, have a person who made $5150.

deferral = 4756

I guess must have deferred 100% of pay. husband must pull down the big bucks and the comp isn't needed!

soc sec = 7.65% * 5150 =394

5150 - 394 = 4756

so ADP % based on comp less deferral = 4756 / (5150 - 4756) = 1207%. software won't even use that, it caps at 999%.

guess they weren't thinking that could happen when they wrote the regs.

One of the takeover plan I'm working on had payroll by payroll matching provision that was amended and eliminated mid-year.

Due to Failed ADP test, some HCEs' deferral will be refunded to them. There has to be matching contribution refund associated with the deferral that will be refunded, too.

Unfortunately, the matching contribution was booked as a transfer when we took it over from the other TPA. I was thinking of entering these matching contribution amounts into our software for testing purposes

My biggest challenge is that the plan allow immediate entry to the 401(k) portion of the plan and some employees deferred after the matching contribution was stopped by amendment mid-year.

How do I handle a situation like this?

Please share me your experience if you were in the similar situation I'm.

Many thanks.

A local union and employer are bargaining over continuing participation in a multiemployer db plan, and they jointly approached the plan with a proposal as follows.  They would like to allow individual employees covered by the cba to have the option to opt-out of participation in the plan.  So, as I understand it, if there are 25 employees in the group, we could have a certain number (let's say 10) opt-out of participation, and the employer would be obligated to make contributions only on the remaining 15 employees who did not opt-out.  The plan does not have any language permitting employees to opt-out.  Is there any legal reason employees could not be allowed to opt-out?  My inclination is to say this would be allowed, provided the plan were amended accordingly to provide for the opt-out.  Any thoughts on this would be appreciated.

DOL Proposed Rule: 60-Day Extension of Applicability Date for Definition of Fiduciary (Conflict of Interest) Rule and Related PTEs

Hello,

Newbie to this forum so please forgive my ignorance on this issue.  I recently retired from the military and moved back home to help my aging mother.  I will try keep this short and to the point.

My mother is currently 71, married and lives in NC.

I recently looked at divorce paperwork from an earlier marriage she was involved in where the separation agreement was filed in a CO district court in 1991.

Her ex spouse is a cardiologist in CO, still practicing and part owner in the very large practice.

In the separation agreement I discovered a QDRO was to be used to ensure my mother received $25,000 from the practice's pension plan.  

My mother did trust this man and they split on good terms, but she simply relied on him to make sure he complied with the terms of the agreement.  When I recently asked, she was unaware she was entitled to the $25k and confirmed she never received it.  She also did not have a lawyer.  The doctor had the paperwork prepared by his and she  just showed up and signed.  I know it was not the smartest thing for her to do but I was too young to know better at the time and she really had no idea either.

Again the doctor's practice is alive and well today, but they have added a word to name of the practice.  The pension plan also exists under a slightly different name from what comes back in a google search and has substantial assets.

Needless to say, this guy is easily a millionaire several times over by now and my mom deserves what she's entitled to.

How should I go about collecting on this QDRO?  

My thoughts on how to proceed:

1 - send the doctor a letter (with a copy of the separation agreement)  and ask him if he just wants to write a check and be done with it

or

2 - use a lawyer to collect (less desirable)

I appreciate your time and any and all ideas you may have to help.  Thank you.

We are receiving conflicting answers on due-date of 1096/1099R to IRS.

Some accountants maintain 2/28. others are saying the rules changed for 2016 to 1/31/2017.

Which is correct???

Would it be permissible for a SH Basic Match Plan to allocate a discretionary match in a nonuniform manner where the owners get a lesser benefit than all the other participants? For example could the owners get a match equal to 40% of the 1st 100% where the other participants get a match equal to 70% of the 1st 100%?

I looked in the EOB and the EOB seems to suggest that it is possible, but it would be subject to BRF nondiscrimination testing. 

Thanks in advance!!

Hi,
Employee of Sports Authority participated for a number of years in deferred compensation plan. FICA and Medicare was withheld from the deferred comp.

SA went bankrupt in 2016.  Deferred comp is a total loss.  Is there any type of tax deduction/writeoff on the personal federal tax return for the withholding and contributions?  If so, how?

Thank you.
Keith