We have one participant in one of our plans who lives in Puerto Rico. He is a U.S. citizen.

How should his direct distribution be taxed.

1) Will the mandatory federal tax withholding still be 20%?

2) Will there be any mandatory "state" taxes upon distribution? If so, what would they be?

I tried to look up this information online, but there are very few sources. Has anyone had experience with this?

Plan sponsor is setting up a wrap plan document eff 1/1, but some of the benefits are not expected to exceed 100 covered ee's until the following year. Rather than report on the 5500 for all benefits, they'd like to design the wrap plan to include 3 given benefits the first year and additional benefits the next year. Is there reason why not?

Greetings,

Does anyone have a good contact at the DOL that they could share?

I have been looking into the question of when ERISA bonding is required under Section 412 with respect to a TPA that collects premiums from plan sponsor and remits to the carrier (note: TPA does not pay claims). My feeling is that these monies are not "plan funds" that trigger the bonding requirement until they are in the hands of the carrier, and thus the TPA does not need to have an ERISA bond in place.

I base this mostly on Section 2580.412-5 "Determining when 'funds or other property" belong to a plan.

https://www.law.cornell.edu/cfr/text/29/2580.412-5

Any information, whether it be a contact # or experience relating to the above issue, would be most appreciated.

Thank you.

Greetings,

Does anyone have a good contact at the DOL that they could share?

I have been looking into the question of when ERISA bonding is required under Section 412 with respect to a TPA that collects premiums from plan sponsor and remit to the carrier. My feeling is that these monies are not "plan funds" that trigger the bonding requirement until they are in the hands of the carrier, and thus the TPA does not need to have an ERISA bond in place.

Any information, whether it be a contact # or experience relating to the above issue, would be most appreciated.

It is my understanding that the e-signing credentials obtained from the DOL Efast 2 site are tied to an individual, not a business entity.

So the question is, if the plan sponsor changes from a C corp to an LLC, and the same person is the trustee of the new entity's plan - are his old signing credentials still in effect? I would think so, but want another opinion. Thanks

based on the CPI-U factors, unless there is a drop I have the comp limit increasing to 270,000 and

the 415 limit to 54,000

hadn't expected that, but there are 3 months to go and it is close using the current 3 months of ffactors

Plan wants to add hardship distributions, but the Trustees want to limit the number of times a participant can take a hardship. For example, a participant is allowed a maximum of 2 hardship distributions total.

In my experience, a Plan can make the hardship distribution rules pretty much whatever it wants, especially if it limits the hardship options to the safe harbors contemplated by IRS regulations. But I haven't seen any regs saying if a Plan can limit the number over the Participant's time in the Plan.

Is there anything that would prohibit the Trustees from adopting such a provision? Thanks.

Can a 401(k) accept a rollover from a 403(b) that is not subject to ERISA? The document simply says that rollovers are accepted from an annuity contract described in section 403(b). The word "qualified" isn't included.

Taking over a plan where the timing for distributions to participants with vested balances <$5K is immediate, and for those >$5K, it's as soon as administratively feasible after a BIS is incurred. We typically don't make that kind of distinction in distribution timing - we put in our documents that payouts are done as soon as administratively feasible after the end of the plan year regardless of the amount.

I'd like to not have this outlier for distributions if possible. Can I change the current provisions to what we're more accustomed to (the plan sponsor doesn't care)?

For the >$5K, I think our timing is going to be the same or sooner in all instances, so I'm OK with changing that side. But is it a cutback for the <$5K participants? And if it is... what's the downside? It might be worth incurring a little extra testing or whatever to ensure that we don't overlook the one plan with a different distribution timing feature.

Thanks.

First plan year 2015, over 100 participants, is an IAR needed?

Does the pension plan have an obligation to provide me with what would be my monthly benefit form my EX's pension while going through the QDRO process? A 50/50 split of my Ex's pension split was a stipulation in divorce settlement ten years ago with the understanding that a QDRO would need to be prepared. Ex is making it very difficult by not signing the prepared QDRO to be submitted to the court. I know there's a lot of different things I could do including getting a lawyer to get this done, but is it worth my time if the amount is minimal ? He was a vested participant the pension plan for 15 years and we were married all of those years.

Does anyone have experience with North American Professional Liability Insurance Agency? I am considering purchasing E&O coverage with them. Any negative experiences or warnings? Thx,

Employer X offers its employees group medical coverage. For purposes of the employer mandate, it has elected the monthly measurement method. Let's say an employee has satisfied the waiting period and is eligible for coverage as of July 1, 2016. Because the employee is actively working during July, and it cannot accurately predict whether the employee would be credited with at least 120 hours of service in July, does the employee get coverage regardless of whether the employee is credited with the minimum number of hours in July? In that case, would the employee then lose coverage for August? Or, does the employer provide the employee with provisional coverage during July and if s/he fails to be credited with at least 120 hours of service during July, does the employer then slip the July 2016 medical coverage rug out from under the employee at the end of July? What if the employee has incurred claims in the month of July?

Employer X offers its employees group medical coverage. For purposes of the employer mandate, it has elected the monthly measurement method. Let's say an employee has satisfied the waiting period and is eligible for coverage as of July 1, 2016. Because the employee is actively working during July, and it cannot accurately predict whether the employee would be credited with at least 120 hours of service in July, does the employee get coverage regardless of whether the employee is credited with the minimum number of hours in July? In that case, would the employee then lose coverage for August? Or, does the employer provide the employee with provisional coverage during July and if s/he fails to be credited with at least 120 hours of service during July, does the employer then slip the July 2016 medical coverage rug out from under the employee at the end of July? What if the employee has incurred claims in the month of July?

Initial plan year, dentist had one location; during the next fiscal year, he purchased another dental office in another location under a different entity with a different EIN

Plan properly amended and joinder agreement to include all eligibles both locations

Fourth year, (current), closes the initial office and merges the two practices, under the name and address of the second location, but with a totally new EIN.

Accountant filed 8822-B.

A bit premature, but how do we handle the Form 5500-SF?

Sponsor and plan name and EIN currently coincide with the initial practice, address and EIN. I assume there would be a problem in changing the name of the plan, as well. We could keep the name of the plan, but that's not to say the participants would be confused.

Prior to EFAST, you could use lines 1-2 for the new corp and keep the same plan name and utilize line 4 for the change in sponsorship.

On other plans where we have done this, the IRS (or the computer) does not read line 4 and the client gets the CP-406 Notice when Form 5500-SF under the old sponsorship (prior year Form 5500-SF) not received. They are looking to assess penalties and interest for the Form that they say was not filed.

What is the purpose of line 4 anyway?

In the past, these IRS Notices will (not "can") take up to 4 months to resolve.

Any assistance with this is appreciated. I'm sure this has come up before.

I know a Safe Harbor Match of 100% of deferrals up to 6% of pay is permissible, but I've never had someone ask that a Non-Elective SH be 4%....

Realistically, you could just have a 3% NE SH and a fully vested 1% discretionary but then they'd go into different buckets in the R/K system...

Thoughts would be appreciated.

Plan has always filed as a small plan. On 1/1/2016, enough new participants entered to bring the participant count above 120. The plan merged into a larger plan on 3/31/2016. I'm preparing the final 5500 for the short year.

Is an audit Required for my final short year 5500, or will it be covered under the acquiring plan's audit when they file their 2016 5500?

I see the option to delay an audit in a short plan year, but this is also a final return for the old plan.

A Non-HCE, who was one of the 25 top paid employees, terminated employment in 2006 and then married the owner of the business.

By attribution she is now a >5% owner, but she wasn't when she terminated.

Fast forward to 2016. She now wants a Lump Sum Distribution from the DB plan.

Is she part of the Restricted Group?

Hello everyone,

Quick question related to the schedule of reportable transactions on a plan which was merged into another plan.

My company merged its retirement plan into its 401k plan on 12/31/2015. It used to be that the 401k plan was only plan participant contributions and the retirement plan was the employer contributions.

We are preparing the form 5500 for both plans and we are wondering if we should include the schedule of reportable transactions for the retirement plan (the plan that merged into the 401k plan) if the net assets as of 12/31/2015 is $0.

Thank you very much for your help! It's greatly appreciated.

Best regards,

Armand

An investment provider received a rollover check and allocated it to the wrong plan and thus to the wrong participant.

The lucky individual had no plan balance otherwise. After the rollover was allocated to their plan account, they took out a loan. Some repayments have been made on that loan.

1. The person whose money was actually rolled in to the plan needs to be made whole, probably by the investment provider? I assuming the paperwork was in order but just not properly handled on their end.

2. The person who got the funds, via the loan, needs to pay back the loaned amount to the investment provider, not to their plan account?

3. The investment provider needs to empty out the account from the wrong person so it can be used for the correct person's account?

Or is this an excess loan that is taxable and still needs to be repaid - but how can it be repaid as a "loan" when there was no balance to actually loan out anyway?

Other ideas?