Sorry if this is an overlap. I did search and there was just too many posts to go through so questions is:

Have a Non-Erisa 403(b) Plan wishing to terminate. Funding vehicle says Custodial Accounts. What am I as TPA required to provide the plan sponsor other than the termination resolution for this process. Do I need to prepare a Notice for participants and if so, what information should it provide, and what should I convey to the client regarding this termination process? I was reading about a 12 month rule for distributions to be all out. I am just not versed on 403(b) termination and want to make sure I provide all the information correctly for the client and the participants.

Thank you.

A participant requested a direct distribution. Thinking she was executing a rollover, she forwarded the check to her new employer's plan. After back and forth with the new employer plan to deposit the check, she's calling the old employer plan stating she wanted a rollover in the first place. According to the participant, the new employer plan has taken so long to act and return the original distribution check, the 60 day rollover window is about to expire.

The recordkeeper is willing to void the direct distribution and issue a new distribution as a rollover. To do this, they want a letter from the trustee of the old employer plan stating this was an "error at the participant level and please correct the distribution as a rollover".

I'm the advisor to the old employer's plan. My question, is the trustee of the old employer plan putting themselves or the old employer plan at risk with the IRS to write a letter requesting the distribution be redone as a rollover?

Thank you for any thoughts

A group of controlled companies with 7 separate plans decides to merge the plans for 2017. Three of the companies maintain plans that currently offer matching contributions, which they would want to continue going forward but would not be extended to other members of the controlled group participating in the merged plan.

If each of the 3 companies could pass 410(b) separately, am I correct that: (a) there is no BRF problem, and (b) the ACP test would be performed separately for each company?

If one or more of the 3 companies could not pass 410(b) separately, but could pass if all 3 are aggregated, am I correct that: (a) there is a BRF issue that would be tested for current availability, and (b) the ACP test would be performed for the 3 companies on an aggregated basis?

Thanks.

I am trying to download an Aviator file into Relius with a QACA Match. The source code on the file is 180. Relius only supports codes through 179. Does anyone have any ideas how to complete a download with a QACA Match. I've tried going into the file and changing the 180 codes to a 149, but then the file completely errors out. Relius has also tried this, but has not had any luck.

Is there an established deadline for a nonprofit to establish a 403(b) plan for a plan year? Is the only requirement that a written plan document needs to be in place prior to allowing 403(b) deductions?

The plan year is calendar, eligibility requirements are age 21 and 1 year of service (1,000 hours) with immediate entry. Subsequent eligibility computation periods revert to plan year.

Participant did not meet the requirements during the 1st eligibility computation period (9/23/14 - 9/22/15), but did meet it during the 2nd period (1/1 - 12/31/15). Is his entry date 12/31/15 or 1/1/16? This has impact on whether he gets the 2015 employer nonelective contribution.

Thank you.

Plan year is calendar, eligibility requirements are age 21 and 1 year of service (1,000 hours) with immediate entry. Subsequent eligibility computation periods revert to plan year. An employee didn't meet the eligibility requirements during the 1st eligibility computation period (e.g., 9/23/2014 - 9/22/15) but did meet it during the 2nd period (1/1 - 12/31/15). Does the employee enter the plan on 12/31/15 or 1/1/16? This has impact on whether he gets the 2015 employer nonelective contribution.

Thank you.

Health insurance premiums for a partner in a partnership are paid by the partner and deducted on his personal return. Does the fact that this expense is classified as deductible by IRC Section 213(d) make it hardship withdrawal-eligible? Assuming that all the other requirements are met. And if not eligible, what specifically excludes it?

Thanks!

Dog

401(k) Plan provides for automatic enrollment. The idea is to automatically enroll participants in either a Roth or traditional (pre-tax) 401(k) account depending on the participant's wages. If the participant earns less than $45K annually, the participant will be automatically enrolled in Roth. If the participant earns more than $45K, the participant will be automatically enrolled in a traditional (pre-tax) 401(k) account.

The reasoning here is that employees who earn $45K or less do not generally pay any Federal income tax (e.g.,after taking into account the Retirement Savings Contributions Credit), so enrolling them in a Roth 401(k) makes more sense for them.

Seems interesting. Any thoughts on this idea?

Hello All,

Quick question on a scenario:

We have a participant who is taking a hardship from the plan. For argument sake, say the plan allows only hardship withdrawals from Employee money. She has 10,000 in employee money available for hardship (after all necessary calculations), and 10,000 in employer match money NOT available for hardship.

If she elects to take out 9,000 (backup permitting) AND gross up 20% for taxes, are we able to take out 11,250 so she nets out to 9,000 or are we limited to 10,000 - leaving her with a net check of $8,000? I believe we are able to take fee's past the limit (for example a $10,000 withdrawal and then a $100 fee from the Employer Money) but this seems like a different scenario

My feelings and around the office is that you are limited to $10,000, with a net check of $8,000. The logic being that if there is not that limit then you could have scenarios where someone elects 10,000 withdrawn and then another 10,000 "withheld for taxes" to skirt around the Employer money limitation.

Could not find much on this in research. Thank you in advance for the help!

I have a plan that was filed as a Multi-Employer Plan from 2011 to 2015 but now the ERISA attorney says it is a Single Employer Plan because it is considered a Controlled Group. Not sure of the history of why this was changed as it was filed as a Single Employer in 2010 but changed in 2011.

How and what do I do to Amend these filings. It is a large Plan requiring an audit not sure if that makes a difference or not.

I have a participant whose company was just purchased (asset sale). He is considered a new employee at the new company. As such he is eligible to take a distribution from the other plan. He called today to request distribution paperwork and let slip that he is going through a divorce. There is no domestic relations order yet. I believe they are at the very beginning (as in they just hired lawyers).

Isn't his 401k balance frozen until a DRO is received? Is there any IRS or DOL citation that says this? The plan doc just references QDRO's which we are no where near yet. His adviser is demanding something in writing.

A plan to be funded by a VEBA was established in the last part of a calendar year, but no money went into the trust until the beginning of the following calendar year. Is a Form 990 due for the calendar year in which the plan was established, or is the first 990 due for the calendar year in which the trust was established (i.e., the date assets were placed into trust)? In other words, can the trust be viewed as nonexistent (i.e., no 990 required) until the date that dollar one was placed into trust?

Can a plan sponsor exclude Roth contributions when making the Safe Harbor matching contribution?

Our company recently started offering a Roth 401k in addition to the traditional 401k. I've been investing into the Roth 401k since January of this year. I finally looked back over the contributions, and saw that there has been no company matching on my contributions (should be matching 100% on first 4% of salary). Contacted payroll about this, and they responded: "You contribute to a ROTH account. There is no employer match on the ROTH accounts, only 401k contributions".

I looked over the plan documentation, and below is a summary of the safe harbor matching:

· You are allowed to defer a portion of your compensation to the Plan. These amounts are referred to as deferrals and are held in an account for you.

· You may make either Regular 401(k) deferrals (pre-tax) or Roth 401(k) deferrals (after-tax).

· In order to maintain "safe harbor" status, your Employer will make a safe harbor matching contribution equal to 100% of your salary deferrals that do not exceed 4% of your compensation.

I'm having a really hard time finding anything on my exact scenario, and I'm trying to avoid a PLR, so any help would be appreciated.

I have a plan which intends on investing/being a minority partner in an LLC which will manage property. They're starting with one parcel, so a QERP exemption is off the table. The investment in the LLC will be under 10% of assets.

The LLC, in turn, will lease a small portion, let's say under 20% of the building, back to employees of the Plan Sponsor.

I'm under the impression this is not a prohibited transaction. The LLC will manage the building, so the route I'm thinking is that this isn't a prohibited transaction because this doesn't constitute a plan asset under 29 CFR 2510.3-101 because the LLC will constitute a "real estate operating company." (takes breath)

This is one of those things where it just feels like they're removed enough to make this legal, but I just can't pinpoint why. Unless I just did, in which case I'm satisfied. I just feel like I'm missing something very simple regarding ownership percentage in an LLC, a de minimis exception, or something along those lines.

Thoughts? Thanks in advance!

Individual works for two companies. Each company has a SIMPLE IRA plan, and the individual has participated in both plans, reaching his annual deferral limit by putting some into each plan. One company ended their SIMPLE Plan, and the individual will not be paid enough in the other company between now and the end of the year to reach his annual deferral limit, even if he defers 100%. Can he put more in the second company's plan based on prior earnings in the current year?

I think a participant cannot defer retrospectively in a qualified 401(k) plan but I'm not sure about a SIMPLE IRA plan. And I can't seem to locate a cite even for the 401(k). Can anybody help with this?

Thanks.

Our ESOP is maintained by the Holding Company and the ESOP has borrowed from the subsidiary directly under the Holding Company. We are restructuring to put a new entity between the holding company and the current subsidiary that is the lender to the ESOP. Is it OK for the same entity to continue to be lender (the sub of the sub of the Holding Company that maintains the ESOP)? Or should be get the loan transferred to the new subsidiary?

A client established a brand new 401(k) plan effective 1/1/2016. According to this new plan, plan document,

· All service with the employer were counted for all purposes

· Service crediting methods for all purposes was elapsed time method

· Eligibility was 1 month and entry with 1^st day of the month following or coinciding for all contributions

· 2/20 vesting schedule

Six month later, 7/1/2016, this client decided to change the TPA and add a New DB plan. To simplify the combo plan testing, the new TPA changed Service crediting method with ultimately affected the vesting. According to the restated 401(k) plan, plan document

· Service from the effective date of the plan were counted for all purposes

· Service crediting methods for all purposes become Hours of Methods

· Eligibility stays the same for deferral but changed to 1 YOS with dual entry, 1^st & 7^th month, for Employer contribution

· 2/20 vesting schedule

The client financial advisor suggested it is ok to go with the restated vesting since this is the new plan.

I have hard time to buy client’s financial advisor suggestion in light of IRC §411(d)(6) anti-cutback Regulations. The reason is that 90% of the employees had at least 1 year of service and entered to the plan on the effective date of the plan, 1/1/2016.

I would think all full-time employees/plan participant will have at least 20% in their employer contribution by 12/31/2016.

Is this not the case?

I have a DC plan that allows terminated participant account balances between $1000-$5000 to be rolled over into an IRA without participant consent. The PPA doc does not address balances under $1000. Can these be cashed out without participant consent?

Hello

What are the cost benefits of converting a Defined benefit plan to a Cash Balance Plan? What are specific issues to watch out for when doing so? Thanks