If an employer amends a SH Match mid-year to exclude contributions to HCE’s – leaving it in effect for Non-HCE’s however – is it still subject to ADP/ACP testing for the year of the change?

I have a plan that includes overtime, bonuses and commissions in compensation. The document specifies participants may defer up to 100% if their bonuses. It does not mention commissions. A client gave a participant a commission check and withheld 401k deferrals and matched it. Is this okay to do? The document does not address this.

For several years we have used fees to former participants to get them to move their assets - rollover or whatever. We used a nominal $100/yr - hoping that would be enough to get them to move.

We're finding it often is not working - they get a letter each year, they do nothing, and we remove the $100 to cover some employer costs.

Does anybody know if there is any guidance on how much is allowable. One employer wants to up the charge to $250 - still just to get them to move.

Participant has outstanding loan which he has been repaying through payroll deduction religiously, through his date of termination via payroll deductions. Terminated 6/1, loan paid through 5/29 installment. He is not over age 59 ½.

Is a terminated participant eligible for the "cure period" of 60 days after the calendar quarter of missed payment to repay the missed payments and bring the loan up to date through the end of the cure period before he has incurred a "deemed distribution"??

Of course, the plan doc does not address.

1) Let's say a participant takes a distribution from a plan. His account balance is $1,000 and the TPA firm charges $50 for processing the distribution. I would assume that $950 should be listed as "Benefits Paid" (since that will be the 1099-R amount) and the $50 should be listed under "Administrative service providers" section. Do you agree?

2) Also, let's say the plan does its Form 5500 on accrual basis. At the end of the year, one of the participant's account balance is $1,000. However, for the fourth and final quarter of that year, he is due to pay a management fee of $5. That fee is not pulled from his account until the first week of the following year. Should the ending balance on Form 5500 that's attributable to this participant reflect that $5 fee (with the $5 fee listed under "Administrative service providers")?

Participant terminated in May. She completed distribution paperwork, the employer signed the form and we processed her distribution in July. Now the employer notified us that they changed her status from terminated to on-call in June. The distribution was done as a rollover. Do I need to request the funds back? The participant is too young for an in-service withdrawal.

Thanks for any advice

A client medical office sponsors a small and very underfunded DB plan. For various reasons termination is on the table. Does anyone have any helpful resources for how this would work when the plan has no PBGC insurance?

Co. A is acquired by Co. B in a stock transaction on 11/01/14. Co. A's 401(k) plan was merged into Co. B's plan

A prior 5% owner of Co. A (Person Z) turned 70.5 on 12/01/14. It is my understanding that since perspn was a 5% owner at some point during 2014 that he should have received a required minimum distribution by 04/01/15, but thta further minimum distributions would not be required as long as he remians employed. Am I correct on that?

Thanks in advance for any guidance.

I was just wondering what common practice was when a participant hands their enrollment form in a week or so after the plan entry and misses the first payroll run. For example a plan has a 7/1 enrollment first payroll is 7/7. The participant didn't hand in the enrollment form until 7/10 so the contribution deferral was not established until the 2nd payroll run. Does the participant just start from the 2nd payroll run, are the employees told "too bad wait until the next enrollment", or double up on the deferral for the 2nd payroll?

Wondering how other admins handle this. Thanks.

Assumptions: This is a 401(k) plan in which no owner or HCE participates.

The sponsor will make a discretionary match which they will contribute on a payroll basis. They want to be able to vary the amount of the match throughout the year without "truing up" at year end. For example, January's match might be dollar for dollar while February's match might only be 50 cents on the dollar.

Our document would seem to allow this, but compliance opinions are in disagreement on whether this is allowed without the true up to a consistent formula at year end.

Any thoughts? Citations would be appreciated.

Plan has 3 employees – one of which is an HCE, two NHCE. All are participants in the plan.

One of the two NHCEs (NHCE A) only worked 499 hours in 2014 but was employed as of 12/31/14. Plan has 1000 hours and last day requirement for Profit Sharing allocation. Plan fails coverage when I exclude this employee, coverage % is now only 50%. Adoption Agreement includes fail safe language. So I need to bring the employee in to pass coverage.

Here is the dilemma. With only 2 NHCEs I can only have 1 rate group (Relius EGTRRA document. The one NHCE (NHCE B) received a 28% Profit Sharing contribution and a 3% SHNEC.

TPA has given NHCE A a 2% PS allocation and a 3% SHNEC allocation to satisfy gateway. I don’t feel that this is ok. Since you are forced to bring in NHCE A to pass coverage, I think he has to get the same allocation so he is in the same rate group. Giving a 2% allocation puts this employee into another rate group which is not allowed.

Am I overthinking this? Can a corrective amendment be made to remove the fail safe language after the plan year has ended? (I don't believe so.) Any guidance would be greatly appreciated.

A plan decides to replace a fund, and due to administrative errors the recordkeeper liquidates the wrong fund. Are they ok correcting the error asap, or do they need to provide another 30 day notice in order to be afforded 404c protection?

member elected catch up deferrals. Plan sponsor stopped making them after 2009 for member. No documents to support this, and member indicates they intended to make them each year. What are their options?

Employee is in a full-time, benefits eligible position, employer pays 80% of cost of coverage (separate medical, dental & vision plans) for Ee-only or Ee plus dependents (spouse and/or children). Ee changes to a Part-Time variable hour position mid-year. Not expected to work 30+ hours on average after change. Ee compensation rate is unchanged, but hours are significantly reduced. As a PT Ee, the Ee is eligible for same medical plans but no dental or vision coverage if enough hours are worked. Employer pays 80% of Ee coverage, but $0 toward dependent (minors only, no spouse) coverage.

Employer offers benefits to variable hour employees who work 30+ hours on average over 12 month look-back period. Ee, as a long-time full-time Ee is in month 1 of a stability period.

1) Because of the employment status change, has Ee experienced a 125 qualifying event?

2) If yes, what changes is the Ee permitted to make? Does status change only apply to dependents due to increased cost or can Ee drop coverage as well?

3) Does the "Special Rule" apply to this situation that would allow the Employer to begin monthly look-back after 3 months in order to allow the Ee to drop coverage?

Thoughts and comments appreciated.

P.S. - The employee does not want to continue coverage.

I have an unusual situation. Company A sells their company to Company B. Company A sponsors a 401k plan but Company B by nature of the sale does not decide to sponsor that plan but set up their own plan. Company A sets a termination date for their plan and owners take their distributions from the plan. All participants of company A are now terminated from Company A and are participants in Company B. They have requested Distributions/Rollovers from company A plan. TPA that is executing the plan termination has held the distributions to the remaining participants and now indicates that termination expenses will be charged to the remaining participants.

Considering that the owners of Company A had the largest balances in the plan and have taken their assets, have they not breached their fiduciary responsibility? Can they legitimately charge plan termination fees to participants? Are these not settlers expenses? What is being done wrong here?

At least half a dozen client call me every other week asking why a Fidelity Bond is needed on an individual account plan and the participant is in charge of his/her own investments.

Apparently the DOL is looking at Sponsors who do not check the appropriate box on Form 5500, and one client has received a letter advising the client that he has 15 days within which to obtain one.

If the participants are responsible for investing their own accounts, technically, why is a Fidelity/Fiduciary Bond necessary.

In the old days before individual accounts, it is entirely understandable.

To this day, a handful of insurance companies are still saying that as long as the plan invests in insurance company contracts, i.e. annuities, a Fidelity Bond is not necessary.

As a TPA trying to follow the letter of the law, we are told we do not know what we are talking about when it comes to this issue.

Any thoughts.

We received a distribution request from a beneficiary. The death certificate is a copy and not original and says: "This is not an original death certificate" in large letters across the whole page. Doesn't seem like this would be an acceptable proof of death. What do you think?

If the owner of a corporation that sponsors a 401(k) un-incorporates and assigns the assets of the corporation to a trust administered by him, can he still maintain the 401(k)?

Should qualified ERISA retirement plans have to escheat any funds to the sponsor's state of domicile or should the state escheat laws be treated as pre-empted by ERISA?

In a defined contribution plan, shouldn't amounts that cannot be paid for an extended period of time be treated as forfeitures, to be reallocated to the other participants? In a defined benefit plan, shouldn't such amounts also be treated as forfeited, reducing future employer contributions?

The MPRA changed the definition of "funding improvement plan" to require that the plan's funding percentage at the close of the funding improvement period equal or exceed the sum of (i) such percentage at the beginning of the first plan year for which the plan is certified to be in endangered status, plus (ii) 33% of the difference between 100% and the percentage in (i).

Prior to MPRA, clause (i) was the plan's funded percentage at the beginning of the funding improvement period.

Does this mean that plans that are half way through their funding improvement period need to comply with the new target? Or is this just for new funding improvement plans? In our situation, this change causes the plan to have a significantly higher funding target.

Any thoughts?