We have a client that would like to add a triple stack match for 2016. We are having difficulty with filling out the AA so that it generates language for the SPD which provides flexibility in the way the triple stack match is calculated. We are using a Relius prototype. Does anyone have any suggestions? The language generated in the SPD makes the ACP safe harbor match look as if is a fixed amount. It is our understanding that the triple stack match is fully discretionary within the confines of the compensation limits set for each piece of the match.

If you include the ACP safe harbor provisions in the AA, can you chose to make the triple stack match one year and not the next without having to amend the plan?

Two W-2 employees terminated from employer X profit sharing plan.

These two are also 50/50 owners of their own corp, which does not have a qualified plan.

Life insurance agent (of course) wants them to establish a profit sharing plan, take the rollover money to purchase ten- pay life insurance policies and make the plan the owner and beneficiary.

This just doesn't smell kosher.

Any thoughts?

I am assisting a client with current and all prior years ADP ACP testing back to 2007. Unfortunately, all prior years are failing so they are looking at having to make QNECS. They just informed me this morning that they are also working with ERISA counsel on filing a VCP for correcting late deferral remittances as well as eligibility /enrollment issues and will be remitting lost earnings for the late remittances as well as 50% of deferral plus the match for all prior years' eligible to enroll but not enrolled/not informed. The question is: do the current remittances by the Employer to correct the prior years' eligibility/enrollment issues impact the ADP/ACP testing and if so, which year? Is it the year the corrective contribution is made?

I met with a prospect yesterday who is using an unnamed payroll provider for administration of their plan. The prospect started their plan on 1/1/2015. It is a QACA Safe Harbor Match(100 on 1% and 50% up to 6%) with automatic enrollment at 3% and auto escalation of 1% up to the level of 6%. Two Owners, 10 Employees. Prospect was told by unnamed payroll company that they must stop their deferrals because the plan is top heavy. My understanding is that the QACA SH Match works like the Basic Safe Harbor Match and Non-Elective in that the plan is deemed to pass top heavy unless the client makes additional discretionary contributions. I am still completely confused as to why the payroll company notified the client that they had to stop deferrals(10,000 each). I just want to make sure I am not missing something here. Thoughts on how to advise the prospect on how to communicate with the payroll company? We will be taking over administration in 2016, I am pretty certain of that.

My client has a PBGC covered 412(e)(3) plan currently. They neither want to make further contribution nor surrender the annuity contracts.

Can the 412(e)(3) plan be frozen? If yes, does it mean no contribution liability any more? Is the plan still subject to the 410(b) testing and the 401(a)(26) testing?

Thanks!

Employer would like to amend the employer base allocation of profit sharing plan so the current year allocation is based on whether or not a participant worked 1000 hours in the prior year. The allocation is flat 4% of comp. The purpose is so contributions can be made on a pay period basis of the current year. No other requirements for allocation other than meeting initial plan eligibility which is 3 months of service. Would this amendment result in the allocation being considered non-uniform and therefore need general testing under 410(b) and 401(a)(4) or could it be treated as a provision like a last day requirement and therefore only be subject to basic 70% coverage testing under 410(b)? Thanks.

I have a doctor client that has six corporate entities. Five of the entities have adopted the 401(k) plan of the main entity. The doctor also has a nanny that is paid through personal funds, not through any of the corporate entities. Does the nanny need to be included in the 401(k) plan?

If the DOL no longer required employer associations to be bona fide (AKA have commonality and control over the plan), what entities would qualify as MEWA under the phrase "any other arrangement"?

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People are correct in that the commonality requirement for pensions is not explicitly stated in ERISA. My thought, is congress may have ratified the DOL's position requiring employer associations to possess commonality and control by adopting the 1983 amendment defining a MEWA:

"The term 'multiple employer welfare arrangement' means an employee welfare benefit plan, or any other arrangement (other than an employee welfare benefit plan), [...] to the employees of two or more employers" ERISA 3(40).

Essentially, unless some entities would still be considered to be a non-EWBP MEWA without the commonality and control requirements, then the definition of employer association must require some form of commonality and control, otherwise part of the statute would be superfluous.

Thoughts?

Due to a merger Plan A is merging into Plan B before 12-31-15. Plan A offers brokerage accounts while plan B does not.

Plan A has a few employees who are over 70.5 and have been deferring their MRD's. The merger requires either the liquidation of the brokerage account or transferring it in-kind to an IRA, which is permissible under Plan A.

Question is do these folks have to take a 2015 MRD from the newly transferred IRA? They want to put this off to 2016 but Plan B wants Plan A merged before the close of 2015.

Any replies would be appreciated.

Employer is terminating the plan. They want to give the match for the people say through 11/15/2015. The match is discretionary with a 1000 hour last day requirement. Any problem with amending the plan to remove the 1000 hour last day requirement? For business reasons they do not want to wait until the end of the plan year, but want to give employees the match they told them that they would do.

Just want to make sure that I have all the questions that might come up in a meeting I have.

Thanks

This plan has insurance for three employees (1 HCE, 2 NHCEs). They are claiming that they were advised (by someone who is now conveniently deceased) that because they haven't offered this option to new employees in over a decade, it is "grandfathered" in and is not a problem.

This does not smell right to me at all. There are 2 HCEs who don't have insurance and 10 NHCEs who don't; (2/12) / (1/3) < 70%. Is there any way that this can be OK?

Thanks.

I am a retired engineer. I have a traditional rollover IRA. I am currently living off IRA distributions, which of course are considered ordinary income. Back in 2013 I had made a sizable withdrawal to cover the fourth quarter of that year. Then my father's estate cleared probate and I received a sizable check. I didn't need the money I'd withdrawn from my IRA and wished I'd not withdrawn it. Not realizing that I can only contribute earned income (i.e. W2 income), I made a contribution of $6500 back into my IRA. This was a mistake on my part.

I recently received a Notice CP2000 from the IRS. They take exception to that IRA contribution from 2013 as they should. They want me to pay now the amount I failed to pay with my 2013 taxes, but didn't because of the (erroneous) IRA contribution which I'd deducted from my 2013 income.

I don't have a problem with this. Once I send them this payment, then I will have paid the income tax for withdrawing that $6500 back in 2013. However, the money will still be in the account.

I understand that I need to withdraw not just the $6500 but also any earnings it made. I have requested the form to withdraw an excess contribution from my brokerage firm (where my IRA is). Their form states clearly that they (the brokerage firm) will calculate the earnings for me. When I make the withrawal of the excess contribution plus earnings, I wlil have to file a Form 5329 which will calculate the penalty taxes (something like 6% of the contribution) along with payment. At that point I will have paid both the income tax due me and the penalty tax.

However, when I make the excess contribution withdrawal, won't that withdrawal be reported to the IRS as taxable income? And if so, wouldn't that be double taxation?

Thanks for reading this. I've tried to be as clear and precise as I can.

metalmagpie

Does anyone know a good source for a 412(e)(3) document?

In order to comply with the 6055 and 6056 reporting requirements, certain employers/plans must generally make reasonable efforts to obtain the social security number or TIN of participating spouses and dependents.

In order to properly solicit this information, can an employer/plan send an e-mail request (in accordance with the ERISA electronic notification rules) or must it send the solicitation via snail mail (except for those who affirmatively consent to electronic delivery)?

Thanks.

Does this require a QMAC or just a Match?

Vesting is not an issue as I am just boosting employees who are 100% vested anyway.

I am increasing from a 10 years of service rate to a 12 years of service rate.

Thank you

We are looking for a a participant notice preparation and fulfillment solution; ACA, QDIA, Safe Harbor, Participant Fee Disclosure. Currently our document system (ASCi - DGEMS) creates safe harbor notices, we use Newkirk for our participant fee disclosure notices, we generate ACA and QDIA notices internally, and then where a sponsor wants fulfillment services we contract with a local vendor. Yikes, that's a lot of moving parts!

We have looked at Broadridge and Newkirk's combined notice and fulfillment solutions, and they appear to be viable, but I am wondering what others are doing, and if there are other vendors out there with combined notice and fulfillment services available?

What's your experience, and how has it worked out?

A medium sized company (500 participants) acquires a smaller company (70 participants).

The plans are similar, and we were planning on merging them. There are a few differences that need to be kept different:

• different matching formulas for the two companies
• different profit sharing formulas (actually one company won't have PS)
• different vesting schedules (more generous in the smaller plan)

We can do all this in the document, but it's starting to get ugly and are considering maintaining two plans.

(I think) that 410(b) testing on the contributions will yield the same result, so the result doesn't impact the decision - I think it is easier to run that testing in one plan but it's probably not a big deal to run a combined test on two plans.

For the vesting, I'm not sure whether to keep it separate (in one plan or two - then I think we have a potential benefits rights and features issue) or just preserve the vested benefits and change everyone to the more restrictive (2/20).

Blah blah. I guess I'm just looking for feedback on what is "normal" or "typical" in these scenarios; it's not something we see all the time but I'm sure others do. I imagine it comes down to the individual situation but thought I would throw it out there.

After February, no more new ERPAs.

https://www.irs.gov/Retirement-Plans/Enrolled-Retirement-Plan-Agent-ERPA-Program-Changes

I assume it is only a matter of time now before they take my ERPA away... That's very disappointing.

https://www.irs.gov/Retirement-Plans/Enrolled-Retirement-Plan-Agent-ERPA-Program-Changes

A participant should have been automatically enrolled at 3% effective January 1, 2015, but due to an error, was not automatically enrolled. The participant terminated employment on June 30, 2015 with the participant never having any 401(k) deductions. The error is discovered in November, 2015.

Is the error eligible for the new "safe harbor correction method for failures related to automatic contribution features in 401(k) plans" as added by Revenue Procedure 2015-28 such that there is no corrective contribution for the missed deferral opportunity?

Or because "correct deferrals" never began, is the plan required to correct under the Elective Deferral failure that requires the 50% missed deferral opportunity?

I would think that the fact that the participant terminated employment should not disqualify the plan from fixing under the new (more favorable) guidance of Revenue Procedure 2015-28, but I am not sure that the guidance addresses this type of situation.