With 401(k)s, there have been many new laws that required the plan document be amended. And the whole document needs to be restated every 5 or 6 years.

When was the last time an amendment or restatement was required of a SEP or SARSEP document?

I'm a contracted management employee whose organization has a buy in provision to the pension for any number of years with the organization and up to 5 years for service from other organizations. When I came in I was put under a defined contribution benefit. I've got about 4 years in and I recently renegotiated my contract to where I participate in the pension while also receiving my defined contribution; if I reach vesting after 10 years I turn over my 401 contributions back to the organization. As a part of the agreement, the organization buys my past service credits into the pension as a part of my compensation, the 4 years I've been here plus 3 years from a prior organization that would qualify per the pension rules. The actuary will have to calculate the cost of what that buy in would be.

My question is how should I setup the "buy in." If the amount is $50k can the organization just cut the pension a check or does it have to be routed through payroll? If it goes through payroll is the contribution made on a pretax basis? I'm protected with a gross up provision if it is post tax but that would balloon the payment for the organanization by 40%+ so I'm really hoping it doesn't have to be post tax. Any insight would be appreciated.

Specifically, does an employee's 90-day wait period begin again if they switch between employers (client organizations) of a common PEO?

Thanks!

I picked up a new comp plan. Previous TPA calculated PS contribution which ends up failing the general test. I understand I can still fix it with an amendment. My question relates to any penalties or excise tax associated with it.

I seem to remember that if we the sponsor makes the additional contribution by 10/15 and wants to take the deduction for the previous year, it will be associated with a 10% excise tax.

What if the sponsors takes the deduction in 2015. Is it just a 415 issue and as long as I don't have one, there's no penalties?

What protections does a participant have that his or her 401k information (in this case their balance) will be handled with discretion and kept private. I don't want to get into the specifics but suffice it to say I received a question from a participant (not of a client of mine) who is outraged that his information was shared with a third-party without his consent.

It was NOT disclosed in the context of services necessary to the administration of the Plan.

For a calendar year plan ADP excess contributions were identified after 3/15, however, when the excess was attempted to be cut it was discovered that the participant had already taken a full distribution of assets due to termination.

Please note: this situation is a single Adopting Employer within a Multiple Employer Plan.

The question is...what is the appropriate recourse particular to the Form 5330 reporting? Do you report the excise tax amount that would have otherwise been distributed if the assets had not already been moved out of the plan? Something else? Thank you in advance for any comments.

Regarding SEP-IRA, as an employer can you Set up and Contribute to multiple sep-ira accounts for a single employee?

Rev Proc 2015-28 provides a "9-1/2 month rule" for Elective Deferral Failures associated with missed elective deferrals for eligible employees who are subject to automatic contribution features under a 401(k) or 403(b) -- including employees who made affirmative elections in lieu of automatic contributions but whose elections were not implemented correctly.

Question: Does the affirmative election "in lieu of" automatic contributions include only a participant's initial affirmative election opting out of auto-enrollment, or would it include the initial election and any subsequent affirmative election a participant makes if that participant is in the class of participants covered by the automatic enrollment feature?

Proposed Answer: It includes the initial affirmative election as well as any subsequent affirmative elections. This is true regardless of whether the plan contains an automatic escalation feature. (Assumes an EACA continues to cover participants who make an affirmative election -- i.e., annual notice continues to be provided to participants who make an affirmative election.)

Rationale: Consistent with the objective of encouraging automatic contribution features, nothing in the new rule specifically limits application to a participant's initial affirmative election. Section 4 of Rev Proc 2015-28 adds new section .05(8) of Rev. Proc. 2013-12 Appendix A that says in part: "If the failure to implement an automatic contribution feature for an affected eligible employee or the failure to implement an affirmative election of an eligible employee who is otherwise subject to an automatic contribution feature does not extend beyond the end of the 9-1/2 month period after the end of the plan year of the failure..." Further, a participant who makes an affirmative election is continued to be covered by an EACA (if the plan provides) so it does not make sense to limit the correction only to an initial election.

Example: Calendar year plan with auto-enrollment at 3%. Participant becomes eligible at 1/1/2015 and immediately opts out by affirmative election. Participant subsequently elects to defer 5% as of 7/1/2015, but the election is not implemented. The Participant does not notify the Employer, and the Employer implements the correction no later than the first payroll made on or after 10/15/2016. The Employer gives appropriate 45-day notice after deferrals begin and makes up the match with earnings within the "SCP correction window" for significant operational failures. No QNEC is required for the missed deferrals because the correction is appropriate under the "9-1/2 month rule" of Rev. Proc. 2015-28.

Agree? Disagree?

I appreciate any comments on the following scenario:

A 401(k) plan is established for calendar year 2014 with a safe harbor match and operates throughout the year as such.

Prior to the start of the 2015 plan year the plan is amended to remove the safe harbor match.

The employer does not provide any notification to the participants that the plan will no longer be a safe harbor plan for 2015.

Question:

Does the fact that the participants were not provided notice that the plan will not be a safe harbor for the start of the new plan year (2015) mean that the employer must still make the safe harbor match for 2015?

If so, I'm assuming this would be a corrective contribution?

The participants were not provided a new SPD or SMM either.

Thank you.

The client really likes immediate entry for recruiting purposes, but doesn't like it for the interns and other part-timers (even though I tell them these are exactly the employees that help our (a)(4) testing). Has anyone used the exclusion that is part of the Relius documents that allow the plan to exclude those employees who are not regularly scheduled to work 1,000 hours in a year?

I can think of a couple of pitfalls on this, like:

1) What if they end up working 1,000 hours and you didn't allow them to defer.

2) If you do like them and they don't work 1,000 hours in that first year, but you hire them later ... would they need to wait until the year after they work 1,000 hours or do we say they are now "regularly scheduled" to work 1,000 hours and let them enter immediately??? That doesn't seem to be the way it reads. It sounds like we would need to wait until they work the 1,000 hours and then let them in the next entry date.

Just wondering if anyone has other pros and cons to using that language.

My company provides health insurance for all employees. We have several employees who have declined our insurance but, have elected coverage on their spouse's group health plan due to better coverage options. Are we able to reimburse the spouse's employer directly for this coverage as it is a group health coverage, not individual coverage?

A Safe Harbor 401k plan had a 12 month eligibility requirement, then mid-year amended the plan to reduce the eligibility to 3 months. Was this permissible, and if not, how is this corrected?

New to the forum but long-time reader, great information on this board. I have the following situation:

Company has a retiree whose benefit is limited by 415. There was a delay of 4 months before benefit payments commenced. Company wants to pay interest for the months the payment was delayed. Would this interest for the 4 months of delay be subject to the 415 limit?

Thanks

Please don't waste any time doing research if you don't know this off the top of your head, as I don't work with these forms and my question is purely for my own general information.

For a small (<50) employer who has an INSURED plan - does the insurance company file both the 1094-B transmittal and 1095-B forms, so that the employer has no filing responsibility, or does the insurance company just PREPARE the 1095-B forms, and the employer still has the responsibility to actually prepare and submit the 1094-B transmittal and the 1095-B forms that the insurance company prepared?

Same basic question for a large (ALE) employer?

In other words, what responsibilities does the EMPLOYER have for insured plans?

Thanks for any information - or do you know of a good, concise source/summary on this?

I generally try to leave my emotions out of my postings, but this time I'm stunned.

Brand new client finally sends listing of plan investments (2 weeks before 5500 is due) and included is an apparent mortgage loan by the plan to his residence, with the assurance that the loan was made in spouse's name before they were married. That is all the info I have at this time, along with the balance of the loan (no loan docs, date of loan, etc.). Husband/wife are only employees/participants. Trying to figure out what to do.....

Successor Plan Question

Related question

http://benefitslink.com/boards/index.php/topic/56926-401k-plan-termination-and-startup/?hl=successor#entry249499

First Question:

401(k) with Safe harbor: Plan terminated end of 2014, no distributions have been made while awaiting final deposits / admin/ testing for 2014.

Less than a dozen participants.

Employer has decided they want to keep having a plan.

Don't care if it is a new plan or the old plan reopened.

Since no distributions have been made, I don't see doing either 1. establishing a new plan, or 2. reopening the old,

would violate the distirbution rules.

Am I missing something in that regard?

Second Question:

Is there a cut-back issue for the right to distirbution for the participants? They would have an expectation/right to a distribution due to the plan termination. The fact that none have been taken seems immaterial.

Under either option, I don't see how it can preserve that distribution right for the deferral/safe harbor money sources, given the standard - not before age 59.5 rule.

Any ideas?

Client is a partnership (CPA firm) that is dissolving 12/1/15 and the business is being sold. Their plan is a 401k safe harbor non elective. Normally all 401k contributions have to be made before the plan terminates. Since I can't determine the partners self employed income until after 12/1/15, can they deposit their 401k and safe harbor contributions after the plan terminates? If another firm is buying their business, does the 401k plan need to be terminated before the sale date?

Can a DB plan base eligibility to participate on the employee exceeding a specified level of compensation? (The plan is aggregated with a DC plan and will pass coverage and nondiscrimination testing on an aggregated basis.)

I have notified all of my clients that I am retiring and closing my TPA business by the end of this year. However, I have one client, with a 401k Safe Harbor plan who is also retiring and closing his practice as of January or February next year. I do not want to have to restate his plan for only two months of operation in 2016 because of the cost to him and the time/effort by me. Is there a tack-on amendment I can use for my EGTRRA prototype plan that will pass if the plan assets do not get 100% distributed before the April 2016 restatement deadline. Or is this cutting it too close for comfort?

We have clients who participate in minimum premium arrangements with insurers (which, in a nutshell, offer insured coverage but with cash-flow advantages of self-funding). At least one of the insurers has taken the position that a minimum premium arrangement is self-funded, rather than fully-insured, and as such, the insurer will not be reporting on Form 1095-B. Instead, the employer, as self-funded sponsor, should report on Part III of Form 1095-C. This was a surprise to clients and to me. I checked the final instructions and they don't appear to call out filing obligations for minimum premium arrangements or any "partial self-funding" situations. I would like to push back on the insurers so they do the reporting, but I'm not finding any clear authority. Thanks in advance if you have anything to share.