We have a 403b plan that has 2 individual annuity contracts that were grandfathered from an older arrangement. The current plan does not offer the annuities as an investment, but the company has been handling the remittance of their contributions.

The plan is converting to another rk so we want to stop this manual process. Are there any formal notification requirements other than telling the 2 participants we won't be remitting the contributions on their behalf anymore?  I can't seem to find anything on this type of situation and would love to hear people's thoughts. 

http://asppa-net.org/News/Article/ArticleID/7159/ct/ff7cdf404509366e8151d44bf327737cf11e6cd03bf5cc2d0bd4426984c92294dd479532ae0d60e6b26b456c3499bd05b4f0b98de35331b536c91c7a45121059

We can use the proposed regs immediately, right?  But what if we are funding a 2016 Safe Harbor contribution today? Can we use the forfeitures today?  I don't see why not.

We have a client with a PEO Plan (multiple employer).  A client has left them and is transferring from their PEO Plan to another PEO Plan.  The receiving (new) PEO Plan provider is requesting a copy of the Plan Adoption Agreement from the sending plan.  The question has been asked if the sending Plan is legally obligated to send the new PEO provider a copy of the AA?

Thanks in advance for any responses.

If a plan sponsor wishes to offer preventive services out of network to non-grand-fathered plans, may it impose cost-sharing (alternatively, may the PS declare that preventive services are not available at all out of network like closed network/formulary for prescription drug benefits)?? 

Plan requires a year of service -1000 hours. Entry dates are 1/1 and 7/1. Year of service reverts to plan (calendar) year.

New employee works over 1000 hours 3/1/2015 to 5/1/2016 and leaves. Is re-hired 1/5/2017.

Would have been eligible 7/1/2016 but not employed.

Less than 1000 hours in 2016.

What is the earliest this employee could be eligible assuming full time in 2017?

When a plans eligibility is Completion of 3 consecutive months of continuous service.   What does continuous service mean? 

owner's two kids work at the company on school breaks and in the summer, work less than 500 hours a year.   Would they have met the 3 consecutive months of continuous service? 

Dr. Payne owns 100% of Payne PLLC ( A )

Dr. Aichen owns 100% of Aichen PLLC (B)

Aichen Payne PLLC (C) is owned by A & B

A owns 60% of C

B owns 40% of C

Per attribution, I would say that Dr. Payne owns 60% of  C and Dr. Aichen owns 40% C.  

Dr. Payne also owns 100% of another practice and is considering his financial advisor wants to install a 401(k) plan.  The advisor has been told (supposedly by a lawyer) that because the doctors as individuals own 100% of their PLLC's which own their shares of C, they have a controlled group.

I have asked for the exact wording of the opinion, but I just don't see a CG issue here.  Am I missing something? 

Takeover plan. He actually worked 2012-2015 and didn’t formerly retire until 2015. There are a couple of other parts who are by aggregation, owners. The Plan is Non-PBGC and is about 125% AEQ overfunded. Its about 140% AFTAP/HATFA overfunded.

The 2012-2014 distributions were RMDs.

It seems legitimate that at his age in 2015 he would be given retirement paperwork[which included a lump sum option], execute same and go home.

But something nags me about this….any thoughts???

The investment-advice fiduciary rule might allow a counterparty to communicate as a non-fiduciary if, among other conditions, the communication is directed to a plan's fiduciary that manages at least $50 million (and the communicator reasonably believes the fiduciary is capable of evaluating the investment decision).  Conversely, if a plan's fiduciary does not manage at least $50 million and is not advised by a registered investment adviser or some other "institutional" fiduciary, a service provider that prefers to be a non-fiduciary must avoid a communication that a reasonable person would perceive as investment advice.

What do BenefitsLink people guess as the percentage of 401(k) plans (by number of plans, not assets of plans) that have less than $50 million?

Suppose John James had a DB plan years ago (1 man business, made scads of money, put a ton into a DB plan, ten ultimately terminated plan and rolled funds over to IRA). Now, some years later, he has another business. Wants to set up a new DB plan.

Do 415 limits take into account the benefit paid to him under the prior plan? I don't think he's a "predecessor employer" but it just doesn't feel right, somehow, yet I'm not sure there is actually a problem. I'd appreciate any insights.

P.S. - I have no idea what type of entity prior business was. Would it make a difference if he was a sole prop? I seem to recall that sole props "last forever" for some purposes.

It looks like when doing 1099's I would include code L, but ONLY code 1 if the participant is under 59.5?  If they are over 59.5, it is just code L?

Agreed?  This person is active so no offset.

In a 403(b) plan, the plan excludes participants who normally work fewer than 20 hours a week are excluded as a class.  If an employee who was previously a full time employee and not part of the excluded class is rehired, are they still eligible to participate in the plan?  Or are they excluded because of their new class status?

Thank you!

I have a plan on the FT William VS.  The plan excludes union EEs for SH & PS, but not deferrals or match.

There is no "regular" match selected for the plan, but it is in the Additional Match subsection for the Safe Harbor Contribs section.  The formula is discretionary.  The only other item checked is the match timing which reads:

The Matching Contribution and time period for all Collective Bargaining Employees shall be the amount specified in the Collective Bargaining Agreement

There is nothing about only the union getting the match.

Given this fact pattern MUST the non-union participants get a match, too?

Calendar year plan terminates August 4th.  The plan failed the ADP test.  Refunds made in December.  Plan sponsor is being told that the excise tax normally assessed on refunds made more than 2 1/2 months after the end of the plan year would not apply.  They are being told that even though the plan terminated creating a short plan year that the normal 03/15 deadline for calendar year plan still applies.

I don't find anything that indicates that the excise tax isn't required in the is circumstance.  Am I missing something?

Thank you for your help.       

Corporation sponsored a Profit Sharing Plan for several years.  The corporation still exists, but there are no employees.  The assets in the plan belong to the principal.  He no longer takes a salary from the corporation.  Some of the assets can not be easily distributed.  As long as he continues to file the 5500 and keeps the plan document current, any issue with the plan just going on.  He takes RMDs from the Plan and that is the only transaction.

Since the principal is the only participant entitled to a benefit, is there any issue with the Trust continuing. It is not an orphan/wasting trust since the corporation is still in existence.

Thoughts??

Scheduled to be published tomorrow.  Looks like we can go back to using forfeitures to fund safe harbor contributions, as long as your plan allows it.  Fortunately, our VS document has the phrase "unless provided otherwise under IRS guidance" at the end of the sentence about not using forfeitures towards SH contributions.

https://www.federalregister.gov/documents/2017/01/18/2017-00876/definitions-of-qualified-matching-contributions-and-qualified-nonelective-contributions

Quote

Explanation of Provisions
After consideration of the comments described in this preamble in the
“Background” section, the Treasury Department and the IRS are proposing to
amend §1.401(k)-6 to provide that amounts used to fund QMACs and QNECs
must be nonforfeitable and subject to distribution restrictions in accordance with
§1.401(k)-1(c) and (d) when allocated to participants’ accounts, and to no longer
require that amounts used to fund QMACs and QNECs satisfy the
nonforfeitability and distribution requirements when they are first contributed to
the plan.

Quote

Proposed Effective/Applicability Date
These regulations are proposed to apply to taxable years beginning on or
after the date of publication of the Treasury decision adopting these rules as final
regulations in the Federal Register. Taxpayers, however, may rely on these
proposed regulations for periods preceding the proposed applicability date. If,
and to the extent, the final regulations are more restrictive than the rules in these
proposed regulations, those provisions of the final regulations will be applied
without retroactive effect.

What are the fund change notification requirements for a plan not subject to DOL ERISA rules? Is it a matter of state law?

Thanks!

An employee, who was in our Dependent Care FSA plan that ended 6/30/2016, did not make an election for the plan year beginning 7/1/2016. The deduction was not removed from payroll and continued to be deducted from the employees pay. This administrative error did not come to our attention until calendar year 2016 was over. What is the proper procedure to correct this error including filing corrected returns?

In a governmental 401a defined benefit plan, each monthly annuity is paid in the month after it accrues (i.e. in February the member is paid the annuity amount accrued in January).  When a member dies, say 15 days into a month, his or her designated beneficiary is entitled to a one-time, lump sum distribution of the deceased member's prorated annuity amount (i.e. those 15 days in the month of the member's death that they were alive and accrued an annuity amount).  Is this prorated annuity amount paid upon the member's death considered an eligible rollover distribution or a nonperiodic payment?  We are trying to determine whether we should apply the 20% federal withholding on ERDs or the 10% federal withholding on nonperiodic payments with an option for no withholding.

A tax exempt's employment agreement entered into years ago provides for a payment to an employee on August 31, 2017 if the employee is employed on that date.  Thus the agreement is within the short term deferral rules under 457f proposed regs and 409A.  The employee would like to be paid and taxed in 2018 rather than 2017.  Under the STD rule, agreements can now be drafted to provide for vesting in one year and payment and tax by March 15th of the next year.  But can an agreement providing for payment in 2017 be amended to move the payment date to early in 2018?  Issues include: 

      1. If an agreement extending the payment date is entered into, does that agreement violate 457f or 409A (e.g., the subsequent deferral rules), assuming the extension still requires payment by March 15, 2018?

       2. If no agreement extending the payment date is entered into, can payment be made in 2018 without violating 457f or 409A, on the theory that there is no deferral of compensation, even though payment in 2018 violates the terms of the agreement?