When processing loans, if participant has already received approval to borrow 50% of their vested balance determined at the time they requested the loan. They have signed and returned the paperwork. Now with the market drop, do we need to recalculate the amount the participant could borrow. What if the paperwork has been sent to them, but they have not returned it.

Here is a proposed match formula. Appreciate any thoughts on whether non-discrimination testing of the availability of each rate of match would be applicable.

The match rate would remain the same at 50%.

The cap on the match would increase with each year of service earned.

Less than 1 year of service, no match.

More than 1, less than 2, 50% match capped at 1% of compensation

More than 2, less than 3, 50% match capped at 2% of compensation

and so on up to 5 year and beyond, with the cap staying at 5% of compensation.

So the rate of match remains consistent. It seems to me that the increasing cap is more of an ACP issue.

Thanks.

Does anyone know of a requirement to file a notice with either the IRS or DOL when instituting a new health plan? Client got the idea that if they start a new health plan (after not offering one in the past) they must file something with either the IRS or DOL notifying them that a plan has been implemented. I cannot find anything on this. I initially thought the client was referring to the 6055 and 6056 reporting requirements but they assure me they "heard somewhere" that they have to file something "with the government" to show they are now offering a health plan or they will be subject to a penalty. Any ideas?

What if there are 5 HCEs, and only one NHCE in a plan & you would like to use restructuring rules?

Can this be done?

I believe that each employee can only be considered in one component.

How does that work if there is only one NHCE?

Here's the information on the plan:

HCE 1- 2.12 EBR 13.21% PS

HCE 2- 2.94 EBR 13.21% PS

HCE 3- 3.92 EBR 4.40% PS

HCE 4- 10.44 EBR 4.40% PS

HCE 5- 8.87 EBR 4.40% PS

NHCE 5.90 EBR 4.40% PS

Thank you

We have an ESPP that has offering periods that go from the first to the last day of each month. Over the offering period, we deduct money from paychecks. On the last day of the month, the stock is purchased.

Our provider (etrade) reports that "grant date" and the "exercise date" as both being on the last day of the month. They are not easily able to report on Form 3922 that the grant date (Box 1) is the first of the month and the exercise date (Box 2) is the last day of the month. Rather, they'd like to use the last of the month for both the grant date and the exercise date.

Is there any problem with reporting both the grant date and exercise date as the last day of the month?

If we can get comfortable doing it this way this year, should we keep it that way for 2016, or should we try to get etrade to change it going forward?

NOTE: The purchase price under the ESPP is 85% of the fair market value on the purchase date.

We are consulting for a company that sponsors two 401(k) plans - one for the partners and one for the non-partners. The partners' plan has been filing form 5500-EZ, which I think it is allowed to do, even though there are 80 partners. Two questions:

1. One of the partners has a QDRO and his account has been split into one account for him and one for the ex-spouse. Does the account for the ex-spouse make the plan ineligible for an EZ filing?

2. I haven't seen too many of these before (EZ filing for large number of partners). Is it true that even if the partner count got to over 120, they wouldn't have to get an accountant's opinion on this plan?

The controller for a company that sponsors a 403(b) asked whether he could be personally liable for errors or problems that might occur with the plan. He said that at a recent seminar, the speaker suggested this is the case. I know that if he were to take any criminal action he could be personal liable. But the Speaker mentioned that if, for example, contributions are late to be deposited, he could be personally liable. I do not believe that this is correct. Any thoughts on this would be appreciated.

Have a plan that is auto everything crazy. I guess not such a bad thing in some ways. First I think they would go bundled if it weren't a complex plan but they want the financial institution to track hours and reach out to the newly eligible to invite them to enroll so they don't have to worry about enrollment. I wouldn't be so concerned if there weren't a 1000 hour requirement on the plan. The requirements are age 21, 1 year of service where 1000 hours is worked and then monthly entry. We have a meeting this week with the financial institution, myself, the client and a few others to implement this and address concerns. My concerns are bottom line, it being done wrong and me not finding out until year end. I am looking for thoughts and concerns and others experience with this. I'm sure I'm not thinking of everything. I just see a lot of room for auto error. I

It has been explained to me that the institution will receive a payroll feed every week and hours and when it hits the requirements, that a notice will go to the participant to enroll. I'm just leary, maybe needlessly. Can someone offer me their experience and maybe topics I should discuss in regards to this.

Apparently Sungard was acquired in August by a company called "FIS." Have they made any press releases or sent any emails reassuring us that nothing is going to change? For example, what if new management decides to phase out Relius/server environment in favor of its on-line ASP platform?

I'm not worried, but I sure would like something in writing telling me I have nothing to worry about. Depending on what you all have to share, I will obviously ask them too.

I honestly did not even know about this deal until I logged in to Relius Documents today and saw the new logo.

I think I'm suffering from some sort of brain cramp. Probably normal Monday morning...

New plan for 2015, non-safe harbor, current year testing. Deferrals were not permitted until, say, July 1.

When running the ADP test, is it run using full year compensation, or compensation only from July 1? There's technically no short year.

While it seems "reasonable" to only consider comp from July 1, I'm not finding regulatory support jumping out at me - but then, I'm probably missing something. Thanks!

Hmm - under 1.401(k)-6, the 414(s) compensation may be limited to the period the employee is eligible, provided it is applied uniformly, etc...- but I would think that this would require the plan to exclude "pre-participation compensation" in order to use only comp. from July 1. Thoughts?

NQDC Plan provides only for lump sum payment at a specified date. The Plan does not permit or even address the subject of participant elections. Can the Plan be amended to permit a "second election," obviously in accordance with the 409A limitations on second elections, or is it too late because vested benefits have accrued and the Plan does not permit elections?

too early in the year to be confused and yet I am. hmmmm...

anyway - I have a cross-tested profit sharing allocation formula.

allocation conditions for active participants are 1000 hours, last day rule.

If termed due to death, early retirement, retirement or total and perm. disability then hours/last day requirements waived for allocation. Plan is not top heavy.

Participant termed in 2012 under the early retirement provions - was over 55 and had 10+ YOS. Participant received an allocation in the year of early retirement. Same participant rehired 11/23/2015. Active on rehire. Participant had 243 hours in 2015 and was employed on the last day.

Is participant excluded from the profit share allocation or no?

appreciate any feedback....

Working with an advisor who says he has a solo 401k with an owner and their child both participating. I was under the assumption that only an owner and spouse could participate in a solo-k.

Are there any exceptions that allow children to participate in a solo-k?

A university has several small plans they are merging into their main plan. The recordkeeper that is receiving the funds says the accounts can be merged in as a rollover. We argue that records should come over as in a normal conversion (i.e., ee and er money broken out by source). Thoughts?

I'm working with a small non-ERISA 403(b) that has convinced the few participants with balances to take their distributions so the plan can be terminated. The custodial vendor sent a letter reminding the plan sponsor that the plan must file a "final 5500" for the year the payouts are made.

Can anyone confirm that? I'm not seeing that rule anywhere... thanks.

Our 401k plan has 2 employers in it (the parent company owns 80% of the subsidiary) and is considered a controlled group. When determining 1% and 5% owners, would you consider each company separately or just consider the parent company?

The example is-

If person A owns 2% of the parent company and person B owns 6% of the subsidiary, is person A a 1% owner and person B a 5% owner?

Obviously, person A also owns a percentage of the subsidiary because the parent company owns 80% of the subsidiary but not sure if you would figure out this percentage and add the 2 together? Or something else?

Client has always been evasive when it comes to firm ownership. Always says there is numerous owners, too many to list. Every year signs off on a statement that no employee has any ownership, AND firm is not part of a controlled group.

Recent events "uncover" that the firm is actually owned by a "foreign trust", which also owns other firm(s) in the US.

Knowing that ownership by a foreign can create a controlled group, I fear that this foreign trust means that the plan we are working on now has controlled group issues to address (i.e. coverage). Assuming this trust has a controlling interest in the 2 firms, do we have a controlled group?

From what I currently know, the 2 firms I have knowledge of have comparable benefits as the plans are currently identical with only salary deferrals. Unfortunately, I do not have the complete history of the two plans AND there could be other firms and plans.

Assuming there is a controlled group, just how big of a mess could this become?

I have a client who closed his business. Single member business, only plan participant, substantial plan assets. We are trying to roll the assets into an IRA but unfortunately are running into some legal issues with the new IRA custodian accepting the money (a lot of document redlining between the new IRA custodian and the firm investing the IRA funds).

I know a plan needs a sponsor. We have been working on this for a year (no joke). My questions are...

1- Can the plan continue sponsor-less until we iron out the IRA issue? If so how much time do we have?

and what about....

2- Can the plan continue indefinitely frozen or orphaned as long as the document is maintained and the plan operated properly?

Thanks

Can anyone provide some guidance on how (or whether) a employer sponsor of a self-insured plan reports on Form 1095-C with respect to employees who terminated employment prior to 2015 but participated in the plan by reason of COBRA for all or a part of 2015? Are they reported the same way as employees who terminated in 2015 are reported for the portion of the year in which they were on COBRA? Thanks.