A Cash Balance plan uses ET for benefit accrual....so a participant joins plan 1/1/2015....terminates 12/28/2015....looks to me like she gets no benefit accrual [Pay credit] for year.

Any thoughts -- I haven't seen an ET plan in about 15 years.

Sole prop 401(k) plan. Owner is sole participant. He makes $100,000. Defers $18,000. Deposits $30,000 in PS.

He's $5,000 over 404(a)3 deduction limit.

What is the remedy?

A participant was terminated (fired) on May 2. She is age 56. She has an account balance of $9000 approximately. The plan does not offer an early retirement provision.

Her broker's question is whether she meets an exception to the penalty. He is reading PUB 575 page 35. I was always under the impression that unless you were 59 1/2 - if you took a lump sum distribution upon termination - you paid the 10% penalty.

Would she qualify for the exception and not have to pay any premature penalty if she withdrew the $9000 in lump sum? It certainly looks that way upon first reading .

Am I missing something here?

p575.pdf

Do HIPPA regulations apply to self-insured health plans? At what address should children over the age of 18 receive their explanation of benefits/reimbursement checks/ notices etc? Their residence or the parent's residence?

I know, I know, 30 days after the end of the plan year-end. But isn't that just based on the DOL's plan asset rules? For deduction purposes, shouldn't they have until they file their 1040 or business tax return?

When opponents of the Labor department’s investment-advice fiduciary rule still were trying to delay the rulemaking, one of the arguments was that the Labor department shouldn’t set standards for “retirement” investment advice until the Securities and Exchange Commission had set standards generally for a broker-dealer’s investment advice, including for advice about accounts beyond those for which the Labor department’s interpretive powers has a legal effect. Once the Labor department’s rule takes effect (in about 3½ weeks), that point is over.

But the SEC still has on its agenda considering a rulemaking that could set some new standards for a broker-dealer’s advice to a retail customer.

How much is left for the SEC to do?

Perhaps it’s biased by who my friends and neighbors are, but I sense that while many people have investments under employment-based retirement plans, Individual Retirement Accounts, Archer Medical Savings Accounts, Health Savings Accounts, and Coverdell Education Savings Accounts – all of which the Labor department’s rule applies to, few have significant investments outside those forms.

Is my guess right? Is your experience different?

What’s your guess about the portion of the population with investments beyond the tax-favored accounts named above (and § 529 plans, which have some investment-advice regulation by other means)?

Is there survey evidence or an economist’s study on this?

Nonprofit has a 403(b) for deferrals and a SEP for Employer contributions..The need to update the document. Because they have the 403(b), they can't use form 5305. American Funds Doc says American funds is custodian. VanGard doc says Vangard will hold assets.

How does this paragraph play out in real life?

Accounting Question:

When a plan offers Roth Contributions, is there an order in which deductions are withheld from the paycheck.

Pre Tax Deferrals with held first

then Federal Income Tax and Social Security

The question is if the participant has several after tax deductions, is the Roth the first or is there a hierarchy as to which after tax gets withheld first?? Or does it matter???

Employer A is a very large 501©(3) and maintains a 403(b) plan for all of its affiliates. Affiliate P has participated in A's 403(b) for a number of years. Last fall, P's executive director complained about A's arrangement with provider M and wanted to have a 403(b) with Provider N instead, so it set up its own 403(b) with Provider N. Now, P wants to have amounts contributed on behalf of its employees while participating under A's 403(b) plan transferred in a plan to plan transfer to P's 403(b) plan with Provider N.

Are the plan-to-plan transfer provisions in the 403(b) regulations participant-initiated, employer-initiated or can they be either or both? It is not at all clear from the text of the regulations. I know that in the qualified plan context, the employer can arrange for a plan merger or spinoff without even informing the participants or seeking their consent. Is there an analogous concept in the world of 403(b) plans?

We were sent an order two years ago and determined it was qualified. However, before we could process it, we received word from the parties that they were not sure they wanted it processed as-is.

We tried many times to contact the parties, but we didn't get confirmation from them until recently that they want the order processed as-is.

So I have an order that's dated 2014 and is otherwise qualified, but can I process such an old order, or do I need to get them to get me a new one?

I have a plan who's 414(s) test is failing by 5.27% because the one and only HCE (the owner) has no bonus.

It's a 3% SH plan. Do I give everybody 3% of their full pay now?

I'm having a brain cramp - currently a straight PS only - no 401(k) feature. They want to add a 401k feature, with safe harbor nonelective as of, say, July 1. No problem with that. Question is this - the safe harbor feature isn't technically added until July 1. When calculating the 3% nonelective for 2016, they want to use full year compensation. Any problem with this?

The plan does not allow in-service withdrawals at any time. The plan does allow in-plan Roth rollovers. The plan also allows distribution from in-plan Roth rollover accounts at any time. The plan would like to change that so the in-service distribution options for the in-plan Roth rollover account are the same as the rest of the plan (withdrawals from rollover accounts are not permitted at any time).

Is the distribution from in-Plan Roth rollover accounts a protected benefit? Can it be completely eliminated so that the in-plan Roth distributions are the same as the in-service distributions?

A non-profit we work with has a 403(b) plan - all the participants have the individual accounts where the contracts are between them and the product directly. Now the plan sponsor wants to leave that product, but they can't unless each individual participant agrees to it - there are dozens, so I'm sure we won't get them all.

They suggested freezing Original Plan and starting a new 403(b) plan (where the employer controls the accounts, thankfully), and then the participants can transfer from Original Plan to New Plan at their leisure. But I don't think that works because the active participants have no distributable event from the Original Plan, so therefore there is no legal basis to move the money from Original Plan to New Plan. Am I making a mountain out of a molehill?

I thought we could have the plan sponsor terminate the Original Plan - that would give the participants a distributable event to move to New Plan. Twelve months later, there will still be some terminated participants who haven't moved... so the plan termination fails and Original Plan still has to continue to exist as an active plan. But the accounts that got rolled over to New Plan don't have to go back, so we basically just created a 12-month window to make these transfers. Is that OK?

Have a client who lost his job and rolled the balance within a 401(k) (with a Roth provision) into an Roth IRA.

He has since found employment and would like to roll the Roth IRA into his new company's 401(k) (that allows rollovers and has the Roth provision).

The service provider that is managing the Roth IRA won't allow it and just keeps saying, "it's not allowed because it's a Roth IRA going back to a 401(k)'??? can anyone help?

Thanks.

I'm going to research the boards on my own too, but as usual the person asking needs an answer in 20 minutes.

Person A owns 100% of Co. Y and 100% of Co. Z

Co Y has had a SIMPLE IRA for years

Co Z has had a 401(k) for years

That is a no-no.

We're trying to help him fix the SIMPLE IRA first. I know you can file through VCP, but I'm not sure of the end result.

The SIMPLE IRA excluded eligible employees and under VCP corrective contributions have to be made. Two questions:

1. Would the IRS consider the contributions made to the 401(k) on behalf of Co. Z employees as corrective contributions?

2. If Co. Z makes corrective contributions for the SIMPLE IRA failure, won't they be tainted since they sponsored a 401(k) in those years?

Thanks for any guidance

I have a Union Plan who has a low-level prescription benefit (after about $1,000 it becomes an 90% co-pay). Some participants who are over 65-years old are asking if they can also have MEdicare Part D as a "secondary" to their Rx coverage.

Does anyone know if that's possible? All I've seen is how Medicare Part B works as primary/secondary, but nothing about Part D.

Thanks in advance!

A doctor has a few people working in his office at a hospital who are paid by the hospital and have access to a 403(b) plan with the hospital, of which at least one employee contributes. The doctor operates under his own business entity and does not have any direct employees paid by that entity. The doctor also maintains a 401(k) Profit Sharing Plan and Defined Benefit Plan sponsored by his entity.

Does the doctor need to make contributions to the people who work in his office, if he accrues benefits in and contributes to both plans? I believe they qualify as employees under the common law definition but I'm not clear on the effect of their eligibility for the 403(b). Also not sure if I am asking the right questions?

Any opinions from this community are greatly appreciated.

Anyone have any info on either EFAST 3 or the DOL's project to completely revamp the 5500?

Hello, looking for some advice or thoughts...

My company had to make some cuts at the end of 2015 due to a lost contract. I was one of those cuts unfortunately.

My company's 401k plan has a 50% match up to 3%. They have a last day of plan employment stipulation. Here is the exact wording from the SPD...

"Allocation Conditions: In order to share in the matching contributions for a Plan Year, you must satisfy the following conditions:

- If you are employed on the last day of the Plan Year, you will share regardless of the amount of service you complete during the Plan Year."

The plan year is Jan 1 - Dec 31. I was employed and worked on December 31st. I worked from 7A-10P. That was my last day of service.

Was I not employed on the last day of the Plan Year? I worked the majority of the day. Should I be entitled to the 3% company match?

Thanks for your advice.