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

If a small plan has Schedule A information - must they file the 5500 instead of the 5500-SF? just can't remember.

The new EPCRS procedure release in Rev. Proc. 2015-28 specifies the following:

(b) notice of the failure that satisfies specified requirements in new section .05(9)© of Appendix A of Rev. Proc. 2013–12 is given to the affected eligible employee not later than 45 days after the date on which correct deferrals begin;

Anyone know of a sample notice floating around out there?

For a sponsor that sends in deferral deposits by check, does the IRS/DOL consider them segregated/deposited as of the date the check was mailed or as of the date the check was actually deposited?

Hi.,

I am new to this forum, so I apologize if I post on the wrong area.

Anyways I was trying to get a hardship withdrawal from my 401K but plan administrator denied the evidence I gave them.

it is a letter from my MORTGAGE company saying

they will accelerate my loan , sell my property.

if I understand this that means they are going to start foreclosure.

this is happening by 9/24/15

Do I have to be in Foreclosure for them to help me? or the letter good enough

to prevent foreclosure?

and also what is acceleration

please clarify

If an amount is withdrawn under the 60 day rollover rule, must the "loan" be repaid to separate IRA or can it simply deposited to the originating IRA?

It seems to me that the point of the rule is to allow you to move from one IRA custodian to another. Is there anything clear on this topic from the IRS or some other big time source (perhaps the large accounting firms)?

If the plan document defines comp as gross W2, can the ADP test be run using net W2 (so that deferrals aren't included in comp)? Is this a discretionary option that can be decided each year, or does it have to be hardwired into the plan document?

Participant is rolling a portion of her balance from her Roth 401k account to a Roth IRA. Do I transfer a ratable portion of the basis? I couldn't fid anything on tis scenario in the EOB. Can anyone point me to some literature?

During open enrollment, an employee elected to make HSA contributions on a pre-tax basis through payroll deductions under the employer's cafeteria plan. A month or so ago (i.e., mid-year), the employee requested that her HSA provider liquidate and close her HSA account. The employee never requested that her employer stop the HSA deductions from her pay. The employee remains employed and covered by the qualifying HDHP.

The employer has just become aware of this situation. A few payroll periods have passed since the employee closed her HSA account and the employer deducted the elected amount from her pay. (The employer is not sure where the amounts deducted actually are now.)

Any idea what the employer should do now with respect to these amounts? Should the employer treat the closure of the account as an election to stop payroll deductions and refund her the withheld amounts even though she did not comply with the plan's election change procedure?

Thanks!

Can a DB plan allow for partial withdrawal as a distribution option?

Distributions from a profit sharing or 401-k are subject to mandatory withholding. Does the mandatory withholding apply to a small amount like $300?

I am an employee of a large tech company. I have worked there over 5 years and have accumulated quite a bit of cash in my 401k. I have decided to take out a loan for a very favorable real estate transaction.

In looking into this process, I have been informed that I must submit a form to the third party (non-financial) 401k administrator for my firm. I have to obtain forms from the financial 401k firm, then submit them to the non-financial 401k firm, who blesses them and sends it to the financial firm, who sends it back to me.

This is annoying but I guess I can live with it.

What has me very worried is that the actual check, which will be large as it relates to real-estate (over 10k), is sent to my non-financial 401k adminstrator first, then from them, to me.

Is this legal? It must be. If so, why? Why should anyone else but the financial institution know what my loan status is? Why should my check be sent to anyone but me? What about identity theft - isn't this situation begging for it?

What possible value could there be in sending checks across country to administrators? This is my money.

FACTS: participant takes early withdrawal from 401k plan and does a direct rollover into an IRA. Based on the documentation, the IRA that accepted the rollover is owned solely by the participant's wife.

Is this a valid rollover/IRA contribution? I have taken for granted that a direct rollover from a 401k plan can only be made to an IRA that is owned by the plan participant. However, I cannot find any statutory authority for this. Everything I have read states that you can rollover over a 401k distribution to "an IRA". I have found discussions on contributions to spousal IRAs but nothing specific about the source of the contribution. Any revelations on this subject would be greatly appreciated!

Entity "B" separated from entity "A" about 14 years ago. Employees B continued participating in the 457 plan of entity A for the past 14 years and B is named as a participating entity in A's plan docs. A has also been providing payroll services to B, which facilitated 457 participation. Effective 1/1/16, B is getting its own payroll system, which seems like an opportune time for them to get their own 457 plan as well. B represents about 7% of A's total employee count at present.

I've never faced this type of situation and am hoping for some guidance from the group, either Code based or experiential.

Should B form a new plan starting at "$0" or can B's current employees (and their assets) be split off to form a new plan? If "splitting" out B's participants and assets, dealing with current employees seems pretty straightforward. But what about B's former employees? Do they stay with A's plan, move to B's new plan, or does it matter? (B's current and former employees represent roughly $30M in total assets.)

Looking for info on what's usual and customary ... and legal, of course.

Thanks!

I'm not an actuary, but trying to get a better understanding of the "most valuable" requirement, as set out in Treas. Reg. Section 1.401(a)-20, Q&A - 16. If a plan uses an interest rate that is more favorable than those prescribed in IRC 417(e)(3) for determining LS and let's say 6.5% for converting among annuity options, would there be a concern that the LS option is more valuable than the QJSA, which is the normal form for married participants? How is the most valuable determination made? Is it simply a matter of using the more favorable factors to determine the present value of the QJSA?

We want to allow participants currently in a DB to elect whether to stay in the plan at the current multiplier or go to a DC plan. Those who elect the DC will have their DB benefit frozen and get an increase in their non elective contribution rate while the ones who stay in the DB do not receive the nonelective in the DC. Can we do this? Guidance?

Thank you!

note how the '5500-SUP' has been added for 2015 (question 13 - 16)

so looks like this is a done deal when next year

13 Has plan been timely amended... (Q 6 on the 5500-SUP)

14 Have required min distributions been made for 5% owners

15 was there unrelated business tax income (Q10 on the 5500-sup)

16 were in service distributions made (Q-11 on the 5500 SUP)

14 wasn't on the original 5500-sup, so maybe that is getting added

since it is an EZ I guess there was no reason to ask a number of the other questions on the 5500-sup - e.g. coverage, ADP testing, etc)

new EZ.pdf

I have a question. I was recently hired to take over for a woman. She wrote a resignation letter saying that she was going to leave the company on September 2nd. She had told my employer that she was moving to another state and going to take a position in another state because her allergies in Pennsylvania were too severe.

She was to train me until September 2nd. I started on August 3rd. By the 10th, she had called off. She called off from the 10th to the 13th. On the 14th she came in for a few hours and left. On the 15th, she filed for FMLA and her return date is in October. No one understands why she would file for FMLA considering she put in her resignation and we no longer know which one comes first.

The FMLA is unpaid.

Help? They dont want to hire her back. They want to hire me and considering she resigned they think they dont have to hold the position open after September 2nd but arent sure.

Would a plan provision be required to allow the purchase of these in a plan?

Or is it just an investment option selected by the Trustee/Plan Sponsor and made available...

Thank you

A new small plan recently was established with TRANSFERRED funds from a plan whose sponsor sold the company of the participants of the new plan. The financial company of the prior plan, which was a large plan, just transferred funds to the financial company of the new plan sponsor. It appears the 11 participants in the old plan, which was VERY large, did not receive a Benefit Payment Election Form and were not given the opportunity to roll or take a distribution in cash. Their funds were just transferred to the new employers new plan. Total transfer is less than $40K for the 11 participants. Additionally, the new plan was established with no ROTH provisions or loans, yet a couple of participants have small loan and ROTH balances. It would appear that the Large plan sponsor would have the liability. However, the new plan sponsor has tainted funds in it's brand new plan.

Should this call for a VCP filing? The ratio of participants/assets affected is miniscule compared to the overall balance in the large plan, but I don't know if this is SCP material.

Thoughts please?