for Ameritas (Remote / Lincoln NE)

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Edit: I have received the answers I needed and am removing the details of my situation for privacy. Thank you to those who helped.

 

 

 

 

 

 

Curious how others handle this one!

Hypothetically, say we have a plan that strategically terminated and when paying out the benefits were told to roll them into an IRA.  However, said owners put all of the money into the trust for a new plan they were setting up. How should this rollover be treated/tracked in the new plan?  The new plan does allow rollovers, so no issue there. 

I've been working for a company as a independent, 'temporary, seasonal' employee receiving a W2 since August 2019.  I recently found out that I was eligible to enroll in their 401K plan since October 2019; however, i was never notified until recently (within the last few weeks).  Nor was I automatically enrolled in 2022.  All along, i believed that I was not eligible due to my employee 'status'. My immediate supervisor was not aware, either.  I recently asked my supervisor if I should enroll now, but was advised to wait until HR gets back to us.

It is my understanding that the company is required to compensate me for lost savings.  i am highly compensated ($150+ annually), work 40 hrs/per week.  In my previous jobs, i always enrolled in 401K and had the maximum allowable contributions,  including 'catch up' contributions (I am over 70 years old), and yes, still work full-time.

I'm waiting for HR at the company to get back to me with a resolution.  in the meantime, i'd like to try and calculate what the compensation will be--at least be in the ballpark--.  Is this something I can do myself?

Thank you

I know that there were numerous lawsuits filef following HHS' issuance of final regulations under Section 1557 of the Affordable Care Act. These lawsuits challenged the validity of the regulations and HHS rescinded a portion of these regulations. As a result of these suits, are the section and the regulations  still on the books? Thanks in advance.

for Centers for Medicare & Medicaid Services [CMS] (CA / CO / DC / GA / MA / MD / MO / NY / PA / TX / WA / Hybrid)

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Employer maintains a 401(k) plan and an ESOP.  Employee who was a participant in both plans terminated employment in 2018 with vested benefits and was rehired in 2024 on a part-time basis. Both plans used the one year holdout rule (not applicable to deferrals under the 401(k) plan), so the employee became a participant for purposes of deferrals under the 401(k) plan upon rehire, but was not eligible for 401(k) match or ESOP allocations, subject to completing a Year of Service.  The employee has not completed a Year of Service in any computation period since being rehired. 

Effective 1/1/2025, the 401(k) plan was amended to become a safe harbor plan (with safe harbor matching contributions), and both plans were amended at that time to remove the one year holdout rule and provide that rehired participants become participants on the date of rehire.  The employer has not treated the rehired employee as a participant for the safe harbor match or the ESOP, believing that the one year holdout rule still applies to her, but the TPA believes that the employee should have become a participant for both the safe harbor match and the ESOP as of 1/1/2025.

I am leaning toward the TPA's position, particularly with respect to the safe harbor match (it doesn't seem like the plan would satisfy the safe harbor if a participant is eligible for deferrals but might not be eligible for the match).  The ESOP is a bit fuzzier, but the TPA's position seems logical in that the removal of the one year holdout rule should apply to all rehires, but not retroactively to a date prior to the effective date of the amendment.

Thoughts? 

An employer sponsors a non-safe harbor 401(k) plan, 1/1 plan year, prior year testing method. The plan provides for a QNEC (3% of pay), allocated to both HCEs and NHCEs. In terms of including the QNEC in the ADP test, ACP test, or not at all - are there any best practices (especially given that the prior year testing method is used)?

For example, can the QNEC be included in the 2025 plan year ADP test, but not included in the 2026 plan year ADP test? If this were to occur, the 2026 test would include a HCE average that does not include the QNEC, but the 2025 NHCE average (used in the 2026 test) would have the QNEC included. I assume this is not allowed? Or, perhaps it is allowed as long as 401(a)(4) requirements are met. 

Thoughts?

If you do not have a spouse and name your trust as the beneficiary, can each beneficiary of the trust rollover their portion into a separate inherited IRA so each can determine when they want to take their taxable distribution  within the 10 year period?  If yes, what is the process of rolling the funds  to the trust then beneficiaries?

for Michigan State University (East Lansing MI / Hybrid)

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A company that only employs the owner sponsors a DB plan and wants to terminate it and start up a new 401k plan because the DB is getting very close to becoming overfunded.  Perhaps I'm confusing two different topics, but I seem to recall that there's a rule where you have to wait at least one year in some instances before you can start up another plan.  I believe the purpose of the rule was to prevent an owner from effectively taking an inservice distribution prior to age 62 (i.e., the distribution resulting from the DB terminating) while continuing to accrue additional benefits via a new 401k plan.  I've found references to sponsors terminating DB plans and immediately starting up 401ks without such an issue mentioned, so my question is under what circumstances do you have to wait a year before starting up a new plan?  TIA

We have an LLC taxed as an S Corp with a PS plan - no 401k feature.  2 year wait with dual entry next.  PS only - everyone in their own group.  Seven 2025 participants.

They haven't made a PS contribution in a number of years but would like to for 2025 (on extension).

We just found out that they installed a 401k plan effective 1/1/2024 with their payroll provider (sigh).  It has a 3 month wait with 1st of the month entry.  EACA with 4% SHM (calced each payroll).  It has a discretionary pro rata PS with no allocation conditions.  There are 4 additional participants in this plan that do not have 2 YOS.

The PS only plan is top heavy.  I don't have the 12/31/2024 balances of the 401k plan yet, but I'm assuming it will still be top heavy.

They want to maximize a PS contribution the PS only plan for 2025.

Can this be done?  If so I assume they have to be tested together, but I'm not sure what that looks like.

Someone from my organization said the PS formula in the 401k plan supersedes the groups formula in the older plan and we have to use the pro rata formula, but I don't think that is true since they are separate plans.  I think the problem is can it be tested with the different eligibility provisions.

Since the THM is needed - we can exclude the non statutory participants from the TH I think, but what about those who have over 1 YOS, but not 2?  

I don't know what I don't know here.  I've never had this situation before.  They didn't come to us when they decided to install the 401k.  Any guidance would be appreciated.

for FuturePlan, by Ascensus (Woodcliff Lake NJ / Hybrid)

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for ftwilliam.com, Wolters Kluwer (Remote / Hybrid)

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for EPIC RPS (MO)

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for EPIC RPS (Norwich NY / MO)

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A client paid their children 1099 i/o w-2 at the suggestion of their CPA, this is for 2025. The children received W-2 for 2024 and at least one them were eligible to participate in the pension plans.

I am told to accept 1099 as w-2 (which is the compensation definition in the plan document).

How can I accept this, makes no sense?

Here is the definition from basic plan document. Checked all the code etc and no reference to any 1099 equivalency.

"W-2 Compensation" means wages, within the meaning of Code section 3401(a), and all other payments of compensation to an Employee by the Employer (in the course of the Employer's trade or business) for which the Employer is required to furnish the Employee a written statement under Code sections 6041(d), 6051(a)(3), and 6052. W-2 Compensation shall be determined without regard to any rules under Code section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code section 3401(a)(2))."

Anything I am missing?

A PWBA interpretation suggests a fiduciary may override a participant’s last investment direction when the participant “can no longer be located” and the individual’s investment seems no longer prudent.

ERISA Advisory Opinion No. 96-02A (Feb. 9, 1996) https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/advisory-opinions/1996-02A.pdf.

BenefitsLink neighbors, are you aware of any plan that replaces a “missing” participant’s investment?

for Centers for Medicare & Medicaid Services [CMS] (Woodlawn MD)

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Are there any good resources on adding Safe Harbor to a plan mid-year (now)?

I was trying to wad through the EOB and ERISApedia, but I didn't find anything right away.  I figured someone here may know where the (current, updated) timing rules are, thus saving me some time and effort...

Thanks in advance...