Does anyone know if under Rev. Proc. 2015-28 a correction can be made if the failure comes from a failure to auto-enroll when implementing a new auto-enrollment feature versus failing to enroll a participant in an existing auto-enroll plan?

If I implement the feature and miss participants, are the reduced correction fees available?

Large Plan

The Investment Manager is paid by the Employer NOT the Plan. The Investment Manager was paid over $5,000. This is an RIA so NO revenue sharing is taken by the investment manager.

the auditors say the Investment Manager must be shown on the Schedule C. I say no way. They do not receive any direct or indirect comp from the plan and are not required to be reported on the schedule C.

Thoughts??

Thanks

This is a calendar year 401k plan that has a last day provision in order to receive the profit share contribution. Participant wants to know if they terminate on 12/31, do they get the contribution? Do they have to terminate on 1/1 in order to be employed on the last day?

How do you calculate the Average Benefit if you are testing the plan on both allocations and accruals. I know if you test on accural, you use the ABT for accuals, and if you test on allocation, you use the ABT for allocations, but what happens if you are passing the rate group testing by testing some on alloactions and some on accurals - what average benefit test do/can you use?

Do you have to take the ABT for the employees tested on allocations and do a seperate ABT for those testing on accurals?

Thanks for your input

401(k) Plan received a divorce decree and separation agreement in March 2014, directing the parties to split the participant's account in the Plan (say $12,000). Participant was to retain responsibility for a loan on the account (say $4,000), so that Alternate Payee should have received $6,000, and Participant $2,000 plus what he repays on his loan.

Plan sponsor didn't request a separate QDRO, nor did the parties provide one, and sponsor acted on the general instructions in the settlement agreement. Arguably the settlement agreement wouldn't have qualified as a QDRO, but they didn't realize that and administered it as if it was. However, they then erroneously segregated the account. Instead of paying the AE $6,000, they paid her $4,000 because they thought the parties were sharing responsibility for the loan (i.e., they divided the $8,000 balance after the loan was deducted).

AE has now realized she was underpaid, and wants the Plan to pay her the remaining $2,000. Participant's account has enough to cover this amount. Any thoughts on how to correct? Would her amount need to be adjusted for interest? The settlement agreement was silent on interest, and no separate QDRO policy exists.

That dreaded day has arrived. SH MAtch Plan with $5,000 of forfeitures and just $2,000 of expenses (for my services). That's $3,000 down the drain.

No choice but to allocate as additional match... Fabulous. My client will be thrilled.

Any word on whether or not the IRS will get their head out of their ___ and fix this idiocy? This client is already plunking in about $100K in match!! Why stick it to them??

Consider a calendar-year SHNEC plan that is effective 1/1/15 and the document is signed 9/1/15.

Does the plan have any obligation to a long-time employee that terminated 8/1/15?

Is this employee included or or ignored in the contribution and nondiscrimination calculations?

Is the answer different in the world of DB plans? Must a DB plan that is signed on 9/1/15 with an eff date of 1/1/15 benefit an employee that left on 8/1/15?

Employee was allowed to participate from day 1, when plan has a 1 YOS requirement. Only one ee (a Non-Highly) was affected.

ECPRS Appendix B, Section 2.07 contains the rules for retroactively amending the plan to conform to the operations. In the examples, they indicate that the amendment was submitted for a determination letter.

I don't think today I am even permitted to submit my pre-approved document (or an amendment thereto) for a determination letter.

So can I do the amendment without submitting for a DL?

For plans that have an exception to the allocation conditions, specifically retirement, I've always treated as: if the person had reached normal retirement age they would receive the contribution regardless of reason for termination.

On the ERISA Outline Book, it mentions:

"Another common exception is for a participant who has reached the normal retirement age stated in the plan, and retires before the end of the year."

A coworker questioned the "retires" part because we can't find any definition of retiring in the AA, BPD, EOB. When you say retire, many would assume leaving the workforce and enjoying endless margaritas on a beach/etc. The only reference that can be found is NRA, which is easily determinable. Outside of using a dictionary...

So, is this exception solely in reference to NRA? Could a plan modify the reason for leaving work as part of the conditions?

I am new to this forum and need help determining how much does my ex will get in QDRO Distribution.

Here is the language in our MSA according to which, she is entitled to half of portion of marital value but she is not entitled to passive gains that occurred due to premarital balance.

'The parties shall divide the amount in the 401k for husband equally and in-kind in accordance with the following: the parties shall equally divide those funds accumulated in the account between the date of marriage April 2012 to date of filing for complaint of divorce May 2014, plus or minus any market
appreciation or depreciation on the aforesaid funds until the date of distribution. any contributions(including any market appreciation and/or market depreciation thereon) made my the husband to the retirement account prior to the date of the marriage and after the date of the filing of the complaint for divorce shall not be included in the portion of the plan to be equally divided by the parties.'

Below are the values o​f my 401k account

Value at date of Marriage:- $48812

Value at date of filing of Divorce:- $104819

Contributions made during the marriage:- $30994

Increase in Value during the marriage :- ($104819-$48812) - $ 56007

Increase in Value due to gains(not contributions) during the marriage - ($56007-$30994) = $25014

So while my Ex is entitled to Half of $30994(Contributions), she is not entitled to half of $25014. This amount($25014) has the gains also due to premarital balance.

Can someone please help me provide a number which my Ex- gets and how is it calculated based on the MSA..

Thanks

Record keeper requires spousal consent for all distributions. However the plan is not subject to J&S, there is no old money subject to J&S and this has been confirmed. Plan document does not require spousal consent, this has been confirmed. The record keeper has agreed that spousal consent is not required but it is "industry standard" to ask for spousal consent.

Questions: By requiring spousal consent, isn't the sponsor not following the terms of the plan document by requiring a participant to do something that is not necessary? Would a DOL or IRS auditor take issue with this in a similar manner as any other operational failure (maybe not as severe)?

thank you

Could someone please confirm if I'm correct in regards to this procedure of rolling Traditional 401k funds into a Roth IRA?

1) Code "G" will be used for this distribution.

2) The total distribution amount will be included as "taxable income". However, taxes don't actually have to be withheld at the time of the distribution. The taxable amount will simply be added to the participant's ordinary income for the year.

3) There will only be 1 1099-R issued.

Do you agree with all 3 of these procedures?

Stale dated checks got returned to participant accounts. Let's say we send a letter or two using skip tracing services, but everything turns up a dead end.

Let;s say further that the balance is greater than $5,000. May I set up a missing participant IRA and be done with it?

I thought no, unless it was a plan termination, but I certainly like the idea of making lost participants someone else's problem!

A client has terminated their 403b plan and paid out all assets. The final 5500 has been filed as well. In reviewing the filings I noticed that an ACP failure from two years ago was not corrected properly...specifically the ACP excess was refunded, but the client never made the one-to-one QNEC contribution required for late ACP failure corrections under EPCRS self-correction procedures. Questions:

1) I believe the client is past the "cure period" for SCP under EPCRS. Given they started the correction during the cure period, but did not completed, would they be allowed to make the required one-to-one QNEC correction or do they need to go under VCP?

2) Can they even do the QNEC to a terminated plan where all assets have been paid out?

Also, the client would technically be in a new plan year had it remained open...not sure if that matters.

Thanks!

We typically exclude all items of compensation listed under Treas. Reg. 1.414(s)-1©(3), such as "reimbursements or other expense allowances, fringe benefits (cash and noncash), moving expenses, deferred compensation, and welfare benefits."

It occurs to me that amounts deferred under 125(a) could be a welfare benefit, which we would typically include in comp under our plans. Does anyone know if 125(a) elections are included in the exclusion as welfare benefits?

I have found nothing that clearly defines what a welfare benefit is under the reg. Most people seem to believe that, whatever it is, it is an employer (not an employee) funded benefit.

Thanks

A client has chosen to use 1/1/14 - 6/30/14 to determine if it is an applicable large employer for 2015. They have chosen to use this time frame because they are a farming business with more employees in the later half of the year. If they have biweekly pay, how do we count full time employees on a calendar month basis? Are you allowed to use the weekly rule, where the period measured for the month must include the week that includes the 1st day of the month or the week that includes the last day of the month but not both? So it would essentially include 2 payrolls per month? Or is the weekly rule not allowed to determine ALE status?

FTWilliam has added an Adoption Agreement item requesting the identification of a "special trustee" responsible for determining and depositing contribution deposits. The DOL requested they add it so that it can "identify the fiduciary responsible for timely deposits."

The Adoption Agreement options are: "CEO of Plan Sponsor," "Trustee," or "Other."

Obviously, in most cases we don't necessarily know who at the company is actually making the contribution deposits, and whether that person is even who the DOL considers to be responsible. We obviously can't make a payroll clerk (or even an HR Manager) a fiduciary.

What are other TPAs doing as a reasonable solution for this? For one-participant plans we're fine selecting "Trustee" since it's obviously the same person. For others, we're thinking of just stating the top officer (CEO/Managing Member/Managing Partner/Proprietor) since they're ultimately responsible for delegating the contribution deposit responsibility -- though that's probably not exactly what the DOL is looking for.

Thanks.

A typical prototype or volume-submitter document's adoption agreement often includes a fill-in-the-blank choice for specifying a State's law to govern whatever ERISA doesn't preempt (if anything).

Imagine that a user prefers not to fill in this blank. (The plan's sponsor is worried that a specification could be argued to constrain the administrator's discretion to a narrower range than would apply if the plan states nothing about State law.)

The rules for relying on the IRS's letter for a preapproved document call for staying within the confines of what the IRS approved. But the Revenue Procedure suggests that a user might vary some "administrative" provisions without losing reliance on the IRS's letter.

What do you think? If a user's adoption agreement leaves blank the State-law line (or responds "none"), does the user keep or lose reliance on the preapproved document's IRS letter?

We're installing an HSA for 1-1-2016 that will have a frontloaded employer contribution of 1000.00. I know that the trustee will need to get the HSA approval process in place and that will take time after Open Enrollment starts ( you have to elect the HSA, then agree to the Bank regs, then the trustee sets up your accunt , and finally deductions begin.

In the event that someone needs care on 1-1 and wants to use the employer contribution,and the employer knows that the employee has elected an HSA can the employer deposit those dollars into an employee account?

Hi BLink members:

For a plan that is not terminating, can a funding method be changed from EOY to BOY? I asked 2 different actuaries to cross-check the answer and got 2 different answers.

Thanks!

Craig Schiller, CPC