Hello all - our company has changed HR benefits providers. Previously we had Slavic401k, and we moved to ADP (for that and all other benefits). A year before the switch I took out a 401k loan for the purchase of my home, which comes with a 15 year repayment duration. When I took out the loan via Slavic, there was an ability to make one principal reduction payment a year on top of your normal payroll withdrawals.

ADP is stating that there is no ability to make a principle reduction outside of payroll, you can only do a complete payoff.

I borrowed 50k to get us over the gap between closing our two houses, and paid off some credit card debt with it as well. So I'm about 10k shy of having hte full amount to pay back, while I have 40k sitting in savings. I had planned on being able to pay back the bulk of that, leaving just a few years of loan left. Now that isn't an option. This is complicated by the fact that I have kids going to college in just a year or two, and since that money is really 401k funds, I really don't want it being considered money I could be putting towards college in the student aid apps (considering if I did apply the funds it would be at a huge tx penalty!).

So - now I'm in a race against student loan apps, in a situation I did not foresee.

Is it legal for your employer to change companies in such a way that your loan repayment terms have changed? Or should all preexisting loans have to have the same terms (i.e. can I force ADP to let me make a payment?).

Thanks very much for any advice! I can find a lot on what happens if you lose your job, or change employers, or fail to pay it back, etc - but not about when your company changes the loan company and that changes your terms mid-loan.

We have a participant that wants to name a trust as his beneficiary. Our plan does allow this. However, on the beneficiary designation form, it states "if you name a trust as a beneficiary, the trustee also must satisfy additional documentation requirements no later than October 31 of the calendar year following the calendar year of your death. The Administrator will provide you or the trustee with the additional forms you must complete."

Can anyone point me to the additional documentation that is required? And we (the plan administrator) do not have any additional forms. What do we need?

Thanks.

Suppose you have a self-insured health plan that improperly provided certain new employees (including highly comped) with the ability to participate and receive benefits in the plan immediately while other employees (nearly all non-highly) were required to wait 60 days to participate. Based on prior guidance, this appears a clear 105(h) violation. There is some IRS guidance (JCEB Q&A, other comments) noting that one possible way around these issues would be for the highly compensated employees receiving the extra / early coverage to pay for that or have that amount imputed in their income. That was not done in real time. Would it be possible for the employer to go back and impute the value (presumably full COBRA cost) of the early coverage in the highly compensated participant's income now and head off any possible future challenge by IRS of a 105(h) violation which could lead to taxation of the benefits received by the participants (and not just imputing cost of coverage). So, basic question is can you retroactively impute income to "fix" the 105(h) issue for open tax years or has a 105(h) violation already occurred since the amount was not imputed in real time?

For those handling MEPs, what kind of software are you using to do the compliance testing? We mostly handle closed MEPs so there are controlled groups that have to be tested together along with unrelated employers that have to be tested separately. We are currently using Relius Admin but I'm curious if anyone has found another product to be better.

And does anyone have experience with handling MEPs using FT William? Asking because we use their 5500 system.

I have 2 companies A and B owned by 2 separate individuals X and Y respectively.

Company A own by X only have 1 employee, Y

Company B own by Y has 4 employees and one of them is X

Company A derives much of its income from Company B

Company A wants to set up a 401K with defined benefit plan

Company B wants to set up a 401k Safe Harbor

Can they have separate plans or are they part of controlled group by management function?

Thanks in advance for any suggestions.

A profit sharing plan (no deferrals) requires 24 months of consecutive service and then enters on the 1st of the year preceeding meeting eligibility.

If a participant is hired on 3/15/2014, terminated 12/22/2015, and rehired 3/24/2016. Since the participant terminated prior to having 24 consecutive months, does his eligibility computation period start over on his rehire date?

We have a 401K safe harbor match 100% of the first 4% of W-2, sponsored my a mgmt company and including 10-11 subsidiaries.

Combined there are over 100 employees.

I would assume that after weeding out those who do not meet the age/service rests,

if there are still over 100 eligibles, we would need an independent auditor report??

We have a 401k plan with employer contributions of safe harbor non-elective and additional profit sharing. The plan has a November 30 year end. While completing the 11/30/2015 year end administration, it was discovered that the employer failed to provide census information for 2 employees for the prior year of 11/30/2014. Both employees had met eligibility to enter the plan during the 11/30/2014 plan year and should have received employer contributions.

We are calculating a QNEC for the missed deferral opportunity. But for the missed employer contributions, should we amend the 11/30/2014 year's 5500 or compute a QNEC to be included in the 11/30/2015 5500?.

Thank you for your thoughts.

Hi. So I just now got revised data for 2014 for a partnership, and Partner P who deferred $6,000 is now showing a loss on his K-1.

Clearly, his deferrals are no good. I think that means that a 5330 is needed to report this, completing Schedule H (Sect. 4979). Is there anything else I need to do because it is happening now? Or do we wait for the IRS to send a letter demanding interest? Or am I way off base in the first place?

Any guidance is appreciated. Thanks!

We need a crash course in cafeteria plans. We have done strictly retirement, but have an opportunity to take on a client with a plan covering dental, health and disability. Plan has over 100 people and so would require a 5500.

I would be particularly interested in any course that would give ERPA credits (kill 2 birds with one stone?).

We need to address both testing and reporting.

Participant has loan and is transferred to another division. During his time with the new division ( they also participant int he plan), his loan payments were not withheld. Participant has now returned to his original division.

Participant wants to bring the loan current and continue making payments.

Participant is past the cure period.

1. Platform will issue a 2016 1099R for the deemed loan

2. Is the only way to avoid the 2016 1099R to file under VCP?

3. Any provisions in the self correction to cover missed loan payments due to management error ( transferring between divisions)?

I can not find any why to prevent the 1099R from being issued unless they file under VCP. Just looking for some thoughts?

Thanks

If an on-site clinic is a stand-alone welfare plan - for line 8b on the 5500, is it appropriate to use code 4Q for other and write in "onsite clinic". Not finding much guidance on this other than the clinic definitely needs a 5500 filing. Other thoughts?

A client provided census data on their plan back in February. It turns out that they included some "historical" data (overstated some compensation and deferrals). This of course, affects the ADP test results, and it changes the refunds that should have been made to the HCE's.

One HCE's refund is only overstated by $1.94, but the other one was paid $989 too much in corrective refunds. At this point in 2016, what are the options to get this corrected?

Tax-exempt 457(b). Employee terminated in June 2009. Because he made no deferral election, entire account balance was to be distributed 90 days after termination. No distribution was made, and error not discovered until 2016! We have no idea what participant knew or thought at the time.

1. Was it "made available" in 2009 and therefore taxable?

2. If so, was it reportable on W-2 and subject to withholding in 2009, even though there was no actual distribution? IRS Notice 2003-20 implies that it was.

3. Is this an operational error that places entire plan at risk? If so, any ideas as to what to do other than distribute the entire account balance now and report it on a 2016 W-2 with income tax withholding?

Profit Sharing Plan holds real estate. Trustee wants to subdivide and sell lots. Jurisdiction requires that a Home Owner's Association be set up before the real estate can be subdivided. Interests in the HOA will be conveyed to each buyer. Trustee's real estate attorney asks if the Plan can own interest in the HOA? At some point the Plan would no longer have any ownership interest, even possibly before all of the lots are sold. The plan document, of course, does not address this specific issue, and I've not found any prohibited transaction addressing HOAs. Where should I look?

Thanks in advance!

Wrap plan document incorporates all benefits offered by employer which are subject to ERISA. It never references any benefit type or provider, all of which are mentioned in the SPD.

If Employer makes a change in benefits, when is it subject to a plan amendment & SMM if there is no actual change to be made to the Wrap Plan Document?

Sample situations are:

• Change in carrier
• Removal of benefit
• Change of benefit from ER sponsored to voluntary
• Change in portion paid for by ER

The SPD will need to be updated for any of these.

700 Hours of Service within the 4 months time period following the Employee's Employment Commencement Date seems like an odd combination to me.

Anyone agree?

I have a doctor group. Company A has 41 doctors/owners participating, all owning equal shares. 19 doctors own company B and the other 22 own company C. Company B and C's plans are for the employees of the imaging centers the drs. own.

It has been determined that this is an Affiliated Service Group, not a controlled group.

****They want to continue to have three separate plans but have the assets combined in one. Is this allowed? The trustee/custodian would have to split the assets by company to complete the individual 5500s.

Employer match is only employer contribution, and it has a 1000 hr/last day requirement. Plan fails coverage (at 69% - grrr!). It's probably going to fail ACP as well, but that's a separate issue.

So if using the average benefits test for coverage, you do NOT include elective deferrals as per 1.403(b)-5(a)(2). Agree?

Now, assuming it still fails on an allocations basis, the coverage testing can be done by cross testing. As I read it, the same applies even if cross testing - you don't include deferrals. Agree?

Imputed disparity won't help, I don't, think, as there is only one HC, who still falls just below the taxable wage base.

Am I missing anything? Other thoughts? Thanks!

So we just picked up a new plan and the prior consultants were aggregating a 403b plan and a 401k plan for the ACP test. All of the HCE's are in the 403b (and their match goes there too) and all of the NHCE's are in the 401k. So no ADP test, but we do have an ACP test.

The problem is, the 403b is calendar and the 401k has a fiscal year-end.

Any suggestions? The match is identical in both plans (small payroll to payroll calculations). Is this something the IRS would entertain allowing a fix for under VCP?