Company and participating employers are consolidating benefit plans so that all employees participate under one plan.  As a result, premiums will increase for some employees.  Company would like to understand if it's possible to pay certain employees a stipend on a pre-tax basis that is used to cover the increased premiums.  The plan is self-insured, so my thought is that providing this payment to some employees and not others presents some discrimination issues.  Also, if the stipend is paid through payroll, can it be deducted pre-tax to pay for the cost of premiums?  

A participant worked at Company Z & terminated employment at age 60.  At age 72, Company Z's plan began paying out RMD's from his account.  Participant zeroed out their account (rollover to IRA or direct distribution) 5 years later.  EE is rehired at age 80 and has no plan balance.  EE begins deferrals.  Does he get an RMD from his new deferrals or because he is currently employed, he does not need to receive an RMD from this account as it was previously zeroed out?

DB plan terminated a few years ago. An annuity provider was established in terms of transferring the pension benefits. It was discovered that an individual (who was already in pay status when the plan terminated) was overpaid. In terms of trying to collect those overpayments, do the provisions of SECURE 2.0 apply?

I have come to really dislike RMD questions. However, here goes:

Participant dies in 2023. Already taking RMD's. Spouse, who also works at the same company and is a participant, took his RMD in 2023, and then "moved" the balance of his account to her account in the plan. She is younger - late 60's. As I understand it, she can treat this money as her own, and no further RMD's are required until HER RBD. Have I got that right?

We have a client ABC with a SH 401(k) plan.  I just received word they are acquiring company XYZ that sponsors a SIMPLE IRA.  It's an assets purchase which will take place 9/30/2024.

I don't know if ABC wants to recognize service worked with XYZ in meeting eligibility.  I think that is likely.  

So, the 402(g) deferral limit would apply as combined for any SIMPLE deferrals and deferrals under the 401(k) plan for 2024. ABC only funds a 3% non-elective SH.  I'm guessing XYZ funds the SIMPLE match.  

If we sweep into the ABC plan XYZ employees who meet ABC eligibility, would the 401(k) funding be as simple as providing the 3% SH for ABC 12-months and former XYZ employees for 3-months?

I believe there is some flexibility in testing in the case of acquisitions.

Thank you!!

We sent all our 5558 extensions in one package for 12/31 on 7/30 as we always do.  About 60 of them by priority mail on 7/30.  Today one of my clients received a letter stating they were denying the extension because it was received late.  Here's my issue, I can't find the tracking receipt ANYWHERE.  It was on my bulletin board and now just vanished.  Sooooo was it just this one that got separated or my entire package.  I have two things, one my bank statement that shows my charge at the Post Office on 7/30 as well as the screenshot of where all my clients needing one were generated on 7/30.  I tried going to the Post Office to see if they could back track and provide my tracking number but some new person was there and I have to go back and speak with the Postmaster.  At any rate, has anyone had this happen? and do you think they'll accept what I have noted above to abate any penalty considering we have never filed a late return or extension.  I am praying this is a one off and that it just got separated from the package.  I've had plenty of instances over my 30 years where they say they haven't received the extension, I've sent it in, and never heard another thing and never included tracking, just sent it to them.  Thoughts?  Anyone else receiving these notices so far? Would you do anything else other than respond right away with what I mentioned.

Thanks!

Client directs me earlier this year to terminate their cash balance and safe harbor(3% nonelective) 401(K) plan due to a business decline. Appropriate resolutions,notices etc. were done.

Subsequently, business improves, and they decide  to still have a 401(k) plan and only proceed to  terminate the cash balance plan. Small business 401(k) with owner and about 10 employees. No deferrals were made prior to the 401k plan termination. Wondering if anyone has done a 401k pan termination/nullification  and what are the issues..Perhaps it is best to just proceed with the termination and start a  new 401(k) in 2025; however, the successor plan rules could be an issue. If we restart the terminated plan,  I am thinking the HCEs should not defer anything for 2024 and hence not require the safe harbor to satisfy the ADP. It would then be up to the sponsor to decide whether to give say 3% to the employees for the entire year or not since it would not really be a safe harbor plan for 2024..Any thoughts?

IRS Notice 2024-63, Q&A E-3, permits QSLP matches to be contributed at a different frequency than elective deferral matches.

Plan makes elective deferral matching contributions on a payroll period basis (that is, compensation and deferrals are measured on a payroll period basis).

Plan wants to implement a QSLP match feature, making the QSLP match on an annual basis (that is, compensation and QSLPs are measured on a plan year basis).

Does IRS Notice 2024-63 permit this plan design, or will the plan need to be amended to make the elective deferral match on an annual basis to sync up with the QSLP match feature (so that deferrals, QSLPs and compensation are measured on a plan year basis)?

Thanks.

Having a slow brain day for a change.

Fiscal plan 5/1/22 to 4/30/23. 

Limitation year is plan year.

2022 415 limit 245k, 2023 415 limit 265k

Froze the plan 5/1/22.

What is the frozen 415 limit?

This is for a 1-person plan.

Owner overdeposited by < $50.

PS amt needed to be exact due to certain limits.

I'm thinking to just cut a check out of the plan to return it.

If a voluntary vendor offers a premium discount for other benefits (1% discount for our life coverages).  My concern is that this would constitute "consideration" and therefore would not satisfy that prong of the safe harbor exemption.  Any thoughts?

If a voluntary vendor offers a premium discount for other benefits (1% discount for our life coverages).  My concern is that this would constitute "consideration" and therefore would not satisfy that prong of the safe harbor exemption.  Any thoughts?

Company A is purchasing Company B.  Stock Transaction.

Company A is transitioning employees to Company B and wants to ensure that the employees in the transition get the annual PS.  PS has last day and 500 rule.

Can we amend the plan for just the employees transitioning?  Or, do we need to amend the plan to remove allocation conditions for all employees for the plan year?

I feel like we need to remove the conditions for all employees for the 2024 for Company A.....

Thoughts?

Thanks

Hi

Plan sponsor is an s-corp.

It is a CG with a sole-prop i.e. adopting employer.

No 5558 (first year of the plan, late adopter (put aside that they do not need to file) but curious.

For automatic extension purposes, plan sponsor deadline is the determining factor i.e. 9/16 because it is an s-corp and cannot rely on sole-prop extended deadline of 10/15.

Right?

I am working on a plan that has a QACA.  The plan has one group of participants hired before a certain date as 100% vested in the QACA match.  The group of participants hired after that same date is subject to a 2 year cliff schedule for the QACA match.  Is this permissible?  The two groups do not fall under the permissible disaggregation rules as the difference is based on hire date only.  Any thoughts?

Good Afternoon,

Has anyone found a way to extract hours of service from date of hire to first anniversary date for newly hired employees?  We haven't had any luck pulling hours reported per payroll across plan years at a participant level. 

Thank you.

We are currently using DATAIR for the documents and their pension system for testing. What software systems do you all have personal experience with and recommend? 

Any thoughts on this one is appreciated.

We have a large 403(b) Plan, over 100 lives.  They have filed as a large plan previously, along with the required audit.

A new ownership group took over; 2023 plan year is their first one involving the plan.  After much foot dragging, I finally received their 2023 employee data, 6 weeks before 10/15.  After stressing that they need to take action since the audit is needed and those take time (and money), I finally heard back today:  "They do not believe the audit is needed".  They want us to finish the 2023 form 5500 and they will file but without the audit.

Reasoning and pointing out that an audit is needed whether they want to engage that or not has gone nowhere.

I can document how they are wrong on this, but otherwise, would everyone just prepare the 5500, indicate the audit is not attached, and let them get 
"caught" by the IRS/DOL a few weeks from now?  Should we as the TPA file the 5500 for them knowing it is not complete?

Thanks for any comments.

I am having a hard time finding how Secure 2.0 will actually impact Top Heavy.  I know Top Heavy Rules were changed so now non-excludable and excludable can be tested separately and the Top Heavy minimum can also be allocated to just the non-excludable.   I know the provision applies to plans starting after 12/31/2023, but we have differing thoughts on when these options will actually start affecting plans.  The prevailing thought is that in order to allocate the Top Heavy minimum to just the non-excludable, the actual Top Heavy must be disagg as well.  Since the determination date is the last day of the prior plan year, the consensus is we cannot use the non-excludable option for the minimum allocation until 2025.  Another thought is that they are independent of each other, that you can run test with all employees but then allocate the Top Heavy minimum to just the non-excludable employees.  I am of the former opinion as I do not see the benefit of using disagg for Top Heavy Test since the more Non-Key balances the better for the percentage.  My thoughts are the only way it makes sense to split the test is so you can get the benefit of allocating the top heavy minimum to the non-excludable, since more likely than not there are no excludable key employees which makes the test 0%.  Basically I think you have to allocate the Top Heavy Minimum in the same manner as you ran the test.  Thoughts?

Another thought that is confusing the issue, is what if there is a Key employee who is in the excludable test, so that test is actually top heavy?  With ADP/ACP and Coverage, we know there is the option to disregard the excludable employees from the test.  I haven't see that spelled out for Top Heavy as yet, and if my previous observation is accurate and there is a Key employee who is excludable and that test is technically "top heavy" does that mean that those excludable employees now need a top heavy minimum?

There seems to be pushback by a recently retired sponsor of their own DC plan who has an unusually large account balance and does not want to terminate as recommended.

They believe the funds and investments are safer under a retirement plan than an IRA.