A contributing employer to a multiemployer welfare fund has received a request from CMS to provide information about its employees for purposes of the CMS data match program. The employer is required by law to provide the requested information. The employer does not have the information, which resides with the multiemployer fund.

Under HIPAA, does anyone have any thoughts on whether the fund can provide the information (mostly health plan enrollment information) to the contributing employer without authorization under HIPAA's privacy rules?

In the non-multiemployer plan context, the employer can provide the information to CMS under the "required by law" exception (EDIT: the employer is not a covered entity so it need not rely on a HIPAA exception) and the employer, as plan sponsor, can obtain the enrollment information from its group health plan. But a contributing employer is not the plan sponsor of the multiemployer plan so this rationale does not seem applicable.

Thanks!

We have risk based allocation models in our plans. These funds that are included in the models are also fund options in the plan. I'm attaching an example of what I mean.

When we publish past performance, we show the performance of both the individual funds in the plan and the models net of mutual fund fees.

Some of our plans charge some fees to the plan. All fees are disclosed in the 404(a)(5) notice to participants.

1. For the models, is it required to show fees charged to the plan and allocated across the trust? How would that possibly be done?

2. Does ERISA have an issue with reporting back tested data? i.e. past performance

Example.xlsx

If a calendar year DB Plan frozen mid June, do plan participant credited a year of service?

If the Plan Document uses base pay, what is the determination for a Highly Compensated employee? Base pay or Total pay?

Safe Harbot nonelective 3%

Nonintegrated Profit Sharing 1000 hour/ last day

Immediate eligibility

Hired a few people at the end of the year - less than 1000 hours and had a couple people quit. Therefore if running 410(b) on just the Profit Sharing portion, it fails 58%.

Plan document has the following in the PS section.

Code §410(b) fail-safe.

If b.2., 3., 5. and/or b.7., 8. or 9. is selected, the Code §410(b) ratio percentage fail-safe provisions will NOT apply (Plan Section 4.3(m)) unless selected below (leave blank if not applicable or fail-safe will not be used):

f. [X] The Plan will use the Code §410(b) fail-safe provisions and must satisfy the ratio percentage test of Code §410(b).

So am I correct in that I cannot use the Average Benefits Test to pass and would have to give some additional participants the profit sharing contribution?

Thanks

Pat

A governmental 401(a) money purchase plan has a 4% pick-up contribution. The plan does not permit employees to make a one-time irrecocable election to not participate in the plan nor to elect to never make pick-up contributions. A collectively bargaining agreement (CBA) raised the 4% to 6% for existing employees. Can this be done via a CBA, a new employment agreement, or by the employer for non-union employees?

I had thought that once pick-up contributions start they can't be increased or decreased for any existing employees. From Rev. Ruling 2006-43:

Section 1.401(k)-1(a)(3) generally defines a cash or deferred election as any direct or indirect election (or modification of an earlier election) by an employee to have the employer (i) provide an amount that is not currently available to the employee in the form of cash or some other taxable benefit, or (ii) contribute an amount to a trust or provide an accrual for a plan deferring the receipt of compensation.

Thank you.

Client bought assets of another business in November 2015 (unbeknownst to me). Calendar year plan. They chose to recognize service with this entity. Only one employee was affected by this decision and they allowed him to make 401k and receive match in 2015 (and currently), where the eligibilty is 1 YOS/Age 21. His salalry is $135,000 per year.

When determining whether or not the amendment to recogize service with this other entity is allowable, I need to make sure the amendment is nondiscriminatory. The same is true both for an amendment effective today and cetainly when doing the retroactive amendment under ECPRS (which must predominantly benefit NHCE's). What are your thoguhts regarding whether or not I can treat this individual as an NHCE versus an HCE?

My initial thought about EPCRS is that the "predominantly benfits NHCE's" requirement is meaningless if you dont have to take into account their future status. I suppose the same concern can be true for any amendment that effectively waives eligibility for a new hire.

Just received note from our TPA that our profit share test did not pass. We started 2015 with owner and 5 employees. During the year we terminated one, one took early retirement, and one left for another job. None of the 3 were employed on the last day or received 1000 hour requirement so they are not eligible for profit share. (We have a tiered structure for profit share.) The TPA says that we have 3 employees who are otherwise eligible for the "plan", so they come onto the discrimination test as $0. This is what made the test fail. Is this correct? I can't see how the 3 terminated employees can be used in testing profit share if they are not eligible for profit share. Thank you in advance for your response.

We have the following groups:

Each HCE and/or physician in own group

Each member on management in own group

All other particpants

Plan is Safe Harbor and has last day rule for PS.

For the people who get SH and terminated, they must get the Gateway to get to cross testing. But since they are all in the "All other participants" group, do I have a problem because the people in that group will not be getting a uniform allocation? In this case, the allocation will be a little higher than the gateway minimum.

Second question: What if a manager becomes an HCE, and is therefore in 2 groups. Which do you use? Doesn't this formula fail the definitely determinable requirement?

Company sponsors 2 401(k) Plans. Prior TPA sent up 2 plans to keep the company from needing an audit. Plan 002 is now subject to audit due to an unfortunate amendment the client decided to make without concern of how it would affect their participant counts.

Assets for both plans are held in the same trust. There is no division (such as Plan 001 participants and Plan 002 participants) split at the investment house. We, the TPA, had asked if the investment house could generate new reports if we provided division information after the fact. They said no, only prospectively.

When we generated the draft Schedule A and Schedule C, we prorated the amounts based on the assets held by Plan 002 in relation to total assets.

Plan 002 has been submitted to the auditors for the plan year. Auditors do not feel that they can certify the information UNLESS all the assets in the trust are reflected on the Form 5500. They have asked that we complete the Form 5500 with total assets for both Plan 001 and Plan 002 on the Plan 002 Form 5500.

I have not encountered this before. Has anyone else ever encountered this situation? And what are your thoughts as to the auditor's request.

He received some match but that's not non-elective and he received a CB accrual but that's not non-elective...does he get a Gateway???

I don't believe so, but just checking.

The idea for this one came as a response to all the article about how the pension system is broken, 4019k) don't work, etc.

we all know it's is never the participant's fault, as Harry Belefonte clearly explains in Jamaica Farewell

Along the way I will squander my pay

For that fun that comes daily on the mountain top

I'll take expensive trips on sailing ships

and I'll keep spendin' and spendin' and never stop

Now its sad to say

I'm in a four-oh-one K

I'm not deferring or puttin' away

My heart will be down

When 65 comes around

Because I'll have so little cash left to spend in town

Sounds of laughter there everywhere

And the dancing girls oh they sway to and fro

I must declare that my heart is there

Though my retirement savings they are real low

Now its sad to say

I'm in a four-oh-one K

I'm not deferring or puttin' away

My heart will be down

When 65 comes around

Because I'll have so little cash left to spend in town

An S-U-V and theres plenty of beer

And the poor gas mileage I dont really fear

I spend a lot on the things that are nice

And my promise is that I will save next year

Now its sad to say

I'm in a four-oh-one K

I'm not deferring or puttin' away

My heart will be down

When 65 comes around

because I'll have so little cash left to spend in town

My heart will be down

When 65 comes around

because I'll have so little cash left to spend in town

jamica.mid

A sole-proprietor write various checks from the profit sharing plan to various companies throughout the year for personal expenses. The sole-proprietor indicates it is an in-service distribution. Form 1099-R was filed and distribution was included in income on the Form 1040. Is this correct?

Or would it be a prohibited transaction since the sole-proprietor is a disqualified person?

Would this be considered an in-direct loan to the disqualified person?

Thank you.

I have a participant who is still employed by a us company but is in India (no longer on us payroll system). they are looking to take a withdrawal from their 401K & I can not find any options available other than a roll over (but that would need to be only their roll over contribution portion if applicable). They can not apply for a loan as they are no longer on the us payroll system and they can not defer in India so will this participant need to wait until retirement age or termination to receive his US 401K?

thanks for any insight in this situation.

I have a situation where the employer was contributing double the amount they withheld on two employee's simple IRA due to an error on the payroll companies report totals. Now the kicker is the employee's W-2 and pay-stubs read the correct amount the Employee's for a total of 4 years this went on. The employee's do not have the money in their simple IRA anymore for us to do any type of return of funds so the only other option if any is to let the employee's keep it and then they will have to claim it as income, get corrected W-2's and amend their taxes for all 4 years? Does anyone have any advice

We have a participant who exceeded the 402(g) limit with Roth deferrals. He also had losses on the contributions. How should this distribution be reported on 1099-R? As I understand it, code "PB" must be used, but how do the losses come into play?

Let's say the participant made $50,000 for the 2015 calendar year. He contributed $19,000 in Roth Deferrals. $1,000 of that must be refunded back to him and there were losses of $100 on that amount.

So, he'll receive a check for $900 in this year (2016) coded as "PB". The way I see it is that he'll pay taxes on the entire $50,000 for this year and the losses are irrelevant (they would be relevant had it been excess of normal pre-tax deferrals).

Am I looking at this the correct way?

Any suggestions on an employee who walks in with a statement from a pooled account from 1993 and says "I never got my money!"

Are there any options? Is it ok to just say "we don't have it."

Situation: husband and wife are co-owners of an LLC taxed as a partnership. They take draws, not W2s, and there are no other employees. LLC Operating Agreement splits income 10/90 between the two. They set up solo401k.

Question: if the partnership contributes 20% of its profits to 401k, does it split up the contribution between the partners 50/50 (if that's what in operating agreement) or 10/90 according to the partnership share?

Is there a problem if income is shared 10/90 but partnership contribution to 401k is split 50/50?

Would compensation from Canada be counted for HCE determination?