client waived eligibility for a class of newly hired non-highly comps last year and wants to do it again. is this a problem despite the fact that they are non-highly?

I need some help from the experts.

I have a group that offers Safe Harbor Automatic Enrollment.

They currently have a 2 year vesting schedule.

They will be terminating 100 employees, due to the fact they are selling off a division.

As part of the termination package to these 100 employees, they want to offer 100% vesting.

They currently have 2500 employees, so this would not be considered a partial plan termination.

They have never offered any other terminating group 100% vesting.

The 100 terminating employees are a combination of HCEs and NCHEs.

Is this permitted?? If so, under what circumstances?

Thanks very much!

If a cross-tested profit sharing plan is written to exclude a group of employees such as associate attorneys, non-shareholder physicians or even an individual by name, those employees will not be eligible to participate once they meet the plan’s other eligibility requirements such as age and service. Therefore, they will not need to receive a top-heavy MB if they are non-keys, they will not receive a safe harbor contribution (if SH plan) and will not need to receive a minimum gateway since they are not receiving an employer contribution.

Questions:

1. They must be included in 410(b) coverage testing as non-excludable, not benefiting; correct?

2. Assuming that coverage testing is passed with those employees not benefiting:

a) Must they be included in 401(a)(4) testing with a zero contribution?

b) If no, can they be included in (a)(4) testing with a zero contribution?

c) Do the answers to a or b change if employee is an HCE or NHCE?

I'm reading through EPCRS 2003-12 trying to find correction for this. Is the plan allowed to self correct by just returning the deferrals?

Does an employer contribution to an HSA automatically make the HDHP subject to COBRA? Assume the HSA is not subject to ERISA because the employer follows the DOL guidance to avoid ERISA.

I think it does, but I am hoping somebody is aware of some guidance that says otherwise.

Plan with approx 8000 lives and continuous flow of rehires - rehires automatically re-enter the plan per the plan document - could /should the sponsor just leave any terminee's 401k withholding percentage in their payroll system so if they rehire, 401k automatically re-starts - and should the participant be given materials again since they rec'd the materials at original hire. SPD describes how rehires are automatically back in the plan subject to rehire rule / rule of parity described in more detail in plan doc....

I'm looking to recommend to sponsor to leave the 401k withholding % in their system so it's automatically re-started to avoid having to cherry-pick thru rehires to see who had been participating before... our office verifies as contributions are made that rehires are subject to re-entry thru retirement plan software.... (in the vast majority of cases based on how rehires are made this seems like it will work best) - no additional enrollment materials on rehire since they rec'd the info at original hire...

Any thoughts or points to ponder would be appreciated....

Client has prior (i.e. 12/31/13) account balance of $300,000 in profit sharing account, and $40,000 in designated ROTH account. He is age 73 in 2014, so the uniform lifetime divisor is 24.7.

So, to calculate the 2014 RMD, $340,000/24.7 = $13,765.18, because the designated ROTH account must be part of the prior account balance for calculating RMDs.

My question is: must the entire $13,765.18 be withdrawn from the profit sharing account, or can I figure a pro-rata portion from both the profit sharing and the designated ROTH account, or is the client free to withdraw $13,765.18 from either or both accounts in any ratio he chooses?

Hi,

Can someone please confirm if a profit sharing plan can allow in-service withdrawals at a stated age of 40 and not place any other restrictions?

For example, NOT require the 2-year baked rule or 5 YOPS rule- only that the participant be age 40?

Help is greatly appreciated.

Participant contributes 80% of pay and we use net comp. So 401k = 8,000, comp = 2,000 percentage = 400%.

Relius let's it through. Anyone have a problem? I'm not aware of any reg and this is not a target QNEC situation.

401(k) Plan provides for elective deferrals and employer match only. No profit sharing or other non-elective employer contributions are permitted. Vesting schedule is 20% after 1 YOS, 40% after 2, etc., with 100% after 5. As written the vesting schedule applies to all employer contributions, but as noted the document does not provide for anything other than a match.

Employer wants to amend the plan to provide for a non-discretionary, non-elective contribution starting 2015. However, it wants to adopt a 2/6 vesting schedule for that money source, while preserving the 1/5 vesting schedule for the match. Will employees with at least 3 YOS have to be grandfathered into the more favorable 1/5 vesting schedule for the non-elective contribution due to IRC Section 411(a)(10)?

Plan adopted the 3% SHNEC provisions, however only NHCE's will receive the safe harbor contributions. The client wants to exclude bonus from compensation for all purposes, including the SHNEC. Since the HCE's do not benefit from the 3% safe harbor contribution, must I still do a compensation test which will probably fail? Or would the exclusion of bonus from compensation for the safe harbor be acceptable in this situation? Thank you.

A New York State church has a non-ERISA defined benefit plan. My reading on DOMA's affect on retirement plans suggests that non-ERISA plans, such as non-electing church plans, are not obligated to follow the changes to qualified plans that came about under DOMA. I was thinking that I would find several articles on the subject of church plans and DOMA, but either I wasn't looking in the right places, or there wasn't much said about non-ERISA plans. I'm asking because a church plan wants to specifically amend their DB plan to make sure that provisions that might apply to same-sex couples will not apply. I suppose that's do-able?

CPA came to me with a client that terminated his plan 3 years ago, all participants have taken distribution except the owner. The owner was told that he could not take distribution until the Safe Harbor was made from 3 years ago. The Plan is a Safe Harbor maybe and sent paperwork to TPA and never provided notices to participants.

Should and can this go through VCP? We can roll the money out and finalize the termination but the client will need to wait 1 year before opening another plan. Does he have the option to keep the plan open if he filed under VCP and not terminate?

Do non-Roth non-deductible after-tax contributions to a 401(k) plan have to be made through salary reduction, or can the contribution be made by the employee from external funds or from already taxed money paid and taxed earlier in the year?

As a recordkeeper, our new client wants to use a specific custodian A - who offers a specific money manager portfolio but who cannot hold American Funds (which they want to offer). We are contemplating an arrangement where the American Funds would be held at Custodian B but still traded on our Platform (which would allow for our website to show complete balances). The issue we have is with fund transfers from A to B - they will take over a week and be very expensive (close to $100 for time and check writing fees).

The issues would be similar if the second custodian was not on our RK platform with the added problem of participants having (possibly) two systems to monitor for their 401k balance.

Assume transmittals are not a problem as the broker is willing to separate that out per custodian.

Is there any prohibition from having an Administrative Policy that prevents transfers between these two custodians except for X times per year (if at all) and attaching those high fees and delayed timing?

Thx.

We have a Deferred Compensation Plan that we need to make payments from. Can we have the plan funds be transferred to the Company and make the payments through payroll?

If not how do we calculate and deposit withholding and fica/medicare taxes?

Here is a link to a summary of the Multiemployer Pension Reform Act of 2014 that Dexter Hofing LLC has prepared. This summary focuses primarily on the changes of interest to contributing employers.

http://dexhof.com/DexterHofingMPRA2014.pdf

DexterHofingMPRA2014.pdf

Employer contributes to SEP IRA (employer contributions only) for employees. Employer also sponsors a 403(b) plan (employee contributions only). Do you have to add the two together so you don't exceed the maximum annual contribution limit (the lesser of 25% of compensation or $52,000 for 2014) or are they separate for purposes of the maximum contribution limit? Where in the IRC do I find the authority for this?

Employer contributes to SEP IRA (employer contributions only) for employees. Employer also sponsors a 403(b) plan (employee contributions only). Do you have to add the two together so you don't exceed the maximum annual contribution limit (the lesser of 25% of compensation or $52,000 for 2014) or are they separate for purposes of the maximum contribution limit? Where in the IRC do I find the authority for this?

Took over a plan that now includes union employees as of 1/1/15. I have little experience with this as only several of the employees will be subject to a collective bargaining agreement.

How exactly do I handle these folks and do I need two plan documents as it appears I do from what I am reading. The agreement states these folks must have a safe harbor plan basically and that the company will also contribute an amount of their pay to the union plan. I am a bit lost. Can someone offer me direction as far as documents and admin.

Thank you.