We have a deceased person whose assets are to be split between 5 beneficiaries at the investment house. The beneficiaries choose to leave the assets in the plan. These assets are all held in one plan with each person having their own account. When the deceased assets are switched to the beneficiaries accounts within the plan and staying in the plan, should the beneficiaries receive a 1099-r as a rollover coming into the plan for these amounts?

Person submitted an application and opened an account but never executed a Plan Document.

Do you think this is correctable under EPCRS?

If not, how would you correct this?

Account was established in 2015 so PPA would be the applicable Plan Document that does not exist.

(And for those of you wondering, Pioneer.)

Thank you

I probably don't even have enough information to properly ask this question, but I thought I'd give it a shot.

I don't know whether this relates specifically to a section 125 Cafeteria plan, or some other form of welfare benefit plan. I THINK the question revolved around whether the 1-person employer could be considered as having a "group" health insurance plan, in order to be eligible for some sort of welfare plan with dependent care benefits, etc...

Does anyone know, offhand, what the governing authority is for defining a "group" plan for such purposes? Or any other pertinent items? Thanks.

Plan Sponsor applied an incorrect match % to certain employees for a 3 year period (in addition to failing ADP/ACP). All employee defferrals were prcessed timely and properly. Correction for the incorrect matching % is being done via VCP.

Would this also require a VFCP filing?

My take would be yes, since a prohibited transaction occured as a result of the incorrect match (and not corrected with the year) and for the lost earnings.

However, I do not see any applicable boxes on the VFCP model application.

Any suggestions?

Hi Guys -

I'm trying to figure out what to file for a DFVCP filing going back into pre-1999 years. Based on my reading of the current instructions I would think that I would use current year 5500 and schedule I and electronically file through EFAST2. However, the 5500 Form Selection tool for this does not recognize plan years prior to 1999 so I'm second guessing myself. Just wanted to see what others are doing.

Thanks!

Hello,

I am currently trying to find out how many TPA's of retirement plans are in the states of MA & NH. Does anyone have any suggestions for how I could locate a list? I tried ASPPA and Benefits Link and have been unsuccessful. Any ideas would be greatly appreciated, thank you.

- Valerie

I am trying to confirm that no excise tax under Sec. 4890D is due if no plan participants are affected by a failure. Example - plan fails to remove lifetime limit provision until 2014. The limit was never imposed on a plan participant in any way (i.e., no participant was denied benefits because they went over the limit). The way I read Form 8928, there is no excise tax due because there are no "individuals to whom the failure applies." Section 4980D nor the instructions to Form 8928 do not define the phrase "individual to whom such failure relates." Has anyone run across any guidance, etc. that speaks to this? A related question is whether a Form 8928 must be filed if there is no tax due. I would think the return would still need to be filed to report the failure. Any help would be greatly appreciated!

Greetings,

I am in the process of preparing a VCP for the below described errors. Where I'm at a loss (despite extensive review of the forums) is

(a) Can the correction for the use of the incorrect match be limited to just those participants making deferral (those with "account balances") by using a QMAC instead of a QNEC correction; and

(b) If a prohibited transaction occurred as a result of the incorrect match % and the loss earnings, thus requiring a VFCP.

FAILURES:

1. Failure to correctly apply the Plan's matching contribution provisions to employees during 2012 and 2013 (Plan Sponsor applied lower matching % to all new employees, despite the Plan language limiting this to only acquired Company A employees)

2. Corrections necessary to pass the non-discrimination tests for 2013 and 2014 due to the three tier matching contribution formula (Plan Sponsor used the wrong matching % in performing tests)

Proposed Correction under VCP

A. For those participants that received the smaller incorrect match AND that had "account balances" (i.e., limiting the correction only to those participants making elective deferrals). a QMAC (as opposed to a QNEC) could be made under VCP. [i know there's a strong argument this correction should go to all eligible participants - even those not deferring - but such a correction would be astronomically higher]

B. Since the incorrect employer match was used, resulting in lost earnings, I believe this would be a prohibited transaction (outstanding match % became plan assets when PS filed tax return) and thus I would propose a VFCP be filed with the DOL (meaning no filing of Form 5330 Return of Excise Taxes). However, looking at the VFCP Application, there is no box to check for "missed employer matching contributions/earnings"

Any insight would be most appreciated. Thank you...

Apologies if this has been asked/answered before, but I did not see this specific question addressed on this message board when I searched:

The 417 regulations state that a defined benefit plan is not required to offer retroactive annuity starting dates (RASDs).

If a plan does not offer RASDs, how is the benefit calculated when a terminated participant who has attained normal retirement age does not receive the QJSA explanation prior to his annuity starting date? Is it calculated on the basis of the prospective annuity starting date, with no makeup payments for the time period between the original annuity starting date and the actual annuity starting date?

What if the plan never provides the QJSA explanation? Since the terminated participant has attained normal retirement age, and the 417 regulations say that consent is not required when a benefit is no longer immediately distributable (which occurs after the later of NRA or age 62), then does the plan have to provide the QJSA explanation? Or can it commence a QJSA distribution - calculated as of a prospective starting date - to the participant without the QJSA explanation and without consent?

I have a client who, instead of doing a profit sharing or matching contribution for employees, prefers to just pay all plan expenses for them. They want to include mutual fund expense ratios in these plan expenses. My question is, would this be at all possible? Assuming expenses are paid daily out of returns from the mutual funds, is there a way to do a calculation of exact expenses paid at the end of the year, and if so, can the employer legally reimburse these funds into the employee accounts?

Thanks in advance for your help!

401(k) with cross-tested PS allocation puts both spouse HCEs in one allocation group. They choose 15% PS contribution, but doctor (husband) gets lower allocation because he is capped at 9.21% due to annual addition limitation. Can spouse (wife) still get 15% allocation? Or is she limited to the same percent as husband because they are in the same allocation group?

Thanks!

Has anyone dealt with Corporate Owned Life Insurance (COLI) inside a plan as a financing vehicle? And how is treated for accounting purposes? Any guidance, insight or thoughts are appreciated. Thank you.

is it allowed to have a 403b Plan with no Participant investment direction?

the contributions would all go into an account managed by an RIA and the TPA would produce individual statements.

It is a 403b7 plan and management would be restricted to mutual funds only.

Thank you

Someone in my office seems to remember a rule that custodians must provide a trust report for a plan no later than 120 days after the plan year.

Is that true? if so, where does it say that?

Situation is as follows:

Eligibility requirements are age 21, 6 months with quarterly entry dates. Plan year end is 12/31.

Employee is age 20 when hired on February 1, 2015 and terminates August 1, 2015 (still age 20 at termination). Participant turns age 21 November 2015. Participant is rehired on February 1, 2016. What is his entry date?

The document does not require employment on a quarterly entry date.

Thank you

My question is on what is the definition of an "Officer" in a 401(k) Plan fo rTop Heavy Purposes.

I know that its a facts and circumstances test. Someone with the title but no authority is not an officer, someone who has the authority but no title could be.

My question is what Authority? Is it the authority to hire / fire, authorize / sign checks, legally bind the company to a particular course of action, e.g., set process or fees?

Does each employee who is considered an officer need to be able to make these decisions independently of another employees?

If two employees who can hire and fire but cannot do it independently of each other still considered OFFICERS?

Thank you in advance

This situation arises in the 9th Circuit, where the Carmona v Carmona decision was rendered.

Here are the facts:

Employee 'marries' Spouse.

Employee retires and begins taking benefits under a DB plan as a joint and survivor annuity based on the lives of Employee and Spouse.

Sometime later, Spouse is diagnosed with a terminal illness and in all likelihood died 15-20 years before Employee.

Employee wants plan to recalculate the benefit and henceforth pay it as a higher per month, single life annuity to him. Plan denies the request.

Employee and Spouse further obtain a declaration of annulment from a state court--as if, legally, they were never married. Employee presents that decree, along with a waiver signed by the negated 'spouse', to the plan administrator, renewing the request for recalculation and then payment as a single life annuity.

Plan administrator is facing the question again.

Of course, had the Employee died already the 'Spouse' would be entitled to the survivor annuity from the plan, the administrator of which would not be the wiser about the 'illegality' of the marriage. They would not have gotten an annulment (which are usually granted on trumped up allegations and affidavits of never-intended-to-be-married anyway).

The plan could easily be gamed in situations like this, where the benefits obligation has already attached to the two lives and been calculated accordingly. Only after additional facts come to light about perhaps the early demise of the spouse could the employee then want to go back, do an election 'Muligan' at the expense and to the detriment of the plan regarding the extent of its benefits obligations. The Carmona decision is that the rights of a spouse vest when the benefits go into pay status with a survivor annuity for that spouse, and divorce courts cannot make the plan undo it and recalculate the benefits (such as there, in Carmona, in favor of a different, prior spouse per a QDRO order).

Plan is considering denying again the request to change to single life annuity.

Does anyone know of a situation where a court has ruled on the effect of an annulment on benefits already in pay status with a survivor annuity?

Is anyone aware of an outright prohibition on multiemployer defined benefit plans offering a lump sum buyout to vested terminated participants? I know there are restrictions on plans in critical or endangered status paying lump sums, but I have a green zone plan that wants to look at this possibility. Any help would be appreciated.

Say employee works for Corporation A. His employment agreement is only with Corporation A and he only performs services for Corporation A. He owns a portion of Corporation B.

Corporation B is in a brother-sister controlled group with Corporation A based on overlapping ownership. Both corporations operate in very similar industries, just different aspects of the same industry.

Corporation A's employment agreement provides a change in control payout to employee if Corporation A undergoes a change in control. Corporation A also wants to give employee a change in control payout if Corporation B (which employee does not work for, but owns part of) undergoes a change in control. Assume the payment (withholding, taxes, reporting, etc.) comes from Corporation A.

I don't think the change in control of Corporation B would be a 409A-permissible payment event for the employee of Corporation A. The "relevant corporation" rules are defined in terms of "corporations" and do not seem to extend to other members of the "relevant corporation's" brother-sister controlled group.

However, the definition of "substantial risk of forfeiture" speaks in terms of a business-related condition of the "service recipient," which does include brother-sister controlled group members. That would seem to allow short-term deferral treatment as long as the payment is shortly after the change in control.

Assuming there's actually a substantial risk that Corporation B will not be sold, thoughts on using the short-term deferral rule by saying the successful sale of Corporation B is a business-related goal of the entire controlled group, which is the relevant "service recipient"?

employer has mulitple locations, which have independent payrolls. Participant transfers from one location to another. New location neglects to enter participant's deferral election into payroll resulting in approx. 3 months of "missed deferrals".

since we know the participant's exact missed contribution amount, would you agree that one method of self-correction might be for the employer to make the QNEC contribution based on what the participant's contributions would have been for that period, along with the corresponding employer match?

I've been looking over the self-correction info and they address a participant not given the opportunity to defer but not specifically failure to follow the participant's election.

Also wondering since we are in the same plan year with 4.5 months left in the year - can the participant be offered the opportunity to increase contributions for those that were missed?

any thoughts appreciated.