Is the choice of a network by a plan sponsor of a self-insured plan a decision that is subject to ERISA's fiduciary requirements?

For example and theoretically, can a employer that has participants primarily living in Florida choose a TPA whose network contains primarily Idaho providers?

Or is this a settlor decision?

If an employer currently sponsors a profit sharing only plan, no 401(k) feature, and they terminate the plan, are they prohibited from starting up a new profit sharing plan or a new 401(k) plan within 12 months of the termination?

It looks to me like treasury regulation 1.401(k)-1(d)(4) would not apply in this case. So perhaps they can start up a new plan without the 12 month wait?

Boxes 12-17 are for state taxes. If there is no withholding are others just leaving these boxes blank?

Wholly owned sub started taking 401k contributions for remittance starting in 2015. Am I correct that this could be considered a discretionary amendment that can be signed by the end of the plan year (12/31/15)?

If anyone has something on point, such an ASPPA Q&A, that would be awesome...

It seems to me like this is one of the grayest areas I can think of. Is it even an amendment? I say yes because it is expanding the scope of eligible employees. No different than amending to include Division A in the Plan.

I have a ten- or twelve-company controlled group where at least the main company (and maybe others - I'm still gathering information) has become an ESOP. I know someone has to look out for the combined employer contribution limits (there is no PS, and the match is about 2%, so that shouldn't be so bad). And I suppose that I'll have to be more vigilent about ownership percentages...

But is there anything else that I need to be looking out for or advising my client on? Thanks.

Let me start by stating that I've never had anything to do with 457(f) plans, so I'm asking this question from a position of almost complete ignorance. (I guess that qualifies me to run for Congress...)

A client (501©(3) if it matters) has a 457(f) document that was drafted in 2008 or very early 2009. My question is this: Have there been updates in the laws (409) or otherwise) that would automatically require this document to be updated? In other words, if no updates since original drafting, are they automatically out of compliance, or might they still be ok? I realize this will ultimately need to be resolved by the client's legal counsel, but I thought I'd like to just have some idea of potential issues.

Thanks.

Every now and again we talk about going paperless. My issue has always been that when reviewing people's work, printing it out on paper has OFTEN manifested errors that I never would have caught in a paperless environment.

Take for example reviewing HCE's. I have last year's census on my desk and the ADP test on my desk. I check back and forth, running fingers from person to person, or perhaps using roller going down a page, putting checkmarks on those I have reviewed, to ensure that everyone on both lists is accounted for. How is that possible in a paperless environment?

2 members of control group share benefits but have their own Life Insurance benefit plans

1 member is > 100

1 member is < 100

it seems from instructions they would file separate 5500's because of the separate Life Insurance benefits.

However, since one member company is < 100 ee's, is it fair to say they do not have to file?

Participant has terminated employment and has incurred five one year breaks in service, but has not taken a distribution. Not fully vested.

Document says forfeiture occurs: the earlier of a forfeiture break (the last day of the vesting computaton period in which the participant first incurs a forfeiture break in service) or cash out.

If the forfeiture break occurs on 12/31/14, do we forfeit an amount based on the value on that date? Or would it be based on the current value?

Example: Value on 12/31/14 is $100,000. Forfeiture is 80% or $80,000.

Value as of today $105,000 times 80% is $84,000.

If the actual forfeiture transaction occurs today, do we forfeit $80,000 or $84,000?

Thank you.

A new client has been operating plans from many different companies as a controlled group from 2011 to the present. There was not enough common ownership amongst the companies to qualify as a controlled group. The plan assets are being held in a master trust. I've been searching for the required correction and cannot seemed to find answers.

1. What is the correction for improperly classifying the plans as a controlled group?

2. Because these plans are not a controlled group, it seems they should not have been held in a master trust. Is there an IRS or DOL correction for this? Can the trust document simply be amended to a group trust instead of a master trust?

Any help is greatly appreciated.

the average CPI-U for the period July-Aug-Sept 2014 was 238.044

the values for Oct-Nov-Dec

were 237.433 236.151 and 234.812, all well below that average.

based solely on the regs, this would mean that some (If not all) of the limits would actually drop if those numbers hold true throughout the upcoming year.

But the only other time this happened a few years ago they said we can never drop from one year to the next (otherwise soc sec would also drop and the folks in Washington have a problem with that!)

so the real early look for 2016 would say don't plan on any changes.

Forgive me if this has been a topic before.

If the adoption agreement election is "Wages, tips and other compensation on Form W-2" and Box 1 on the W-2 is just that "Wages, tips and other compensation", then if that box excludes deferrals, should you not always elect to "include salary deferrals" as an adjustment to compensation?

Example, if you earn $10,000 and elect to defer 10%, your Box 1 would be $9000. However, for plan purposes you would actually defer more than 10%.

HATFA modified the benchmark for applying Section 436 restrictions when the sponsor is bankrupt. Starting in 2015, to pay accelerated benefits in a plan sponsored by a company in bankruptcy, the AFTAP must be certified as at least 100% based on non-relief segment rates. Here are two or three questions (assume that the sponsor is in bankruptcy and that the plan year is the calendar year):

1. To what extent would the 2014 AFTAP as certified continue to apply between 1/1/15 and 3/31/15? Is there any carryover for that period, or must there be a fresh 2015 AFTAP certification (range or otherwise) to justify payment in 2015 of any accelerated benefits? Would it matter if the enrolled actuary is willing to certify that the 2014 AFTAP, determined without regard to the relief segment rates, would have been 100%, or must a certification using 2015 assets and 2015 liabilities be issued?

2. Suppose that the PBGC has decided to take over the plan based on a plan termination date in 2014 related to the corporate bankruptcy filing. Would the plan's limitation status for 2014 become permanent because the plan terminated before 2015 (i.e., given that the AFTAP for 2014 was certified as being at least 100%, would IRC Section 436 never become applicable, notwithstanding the fact that in 2014 the non-relief AFTAP would have been lower than 100%)? Would it matter if the retroactive termination date chosen by the PBGC is earlier than the date (prior to October 1, 2014) on which the 2014 AFTAP was certified by the enrolled actuary?

Any thoughts concerning these issues would be welcome.

This plan sponsor went out of business almost a decade ago, but the plan seems to have never been terminated. Now the DOL is trying to get it paid out after several participant calls.

Of course,the DOL recommends that the plan be brought into full compliance and then paid out, and the plan sponsor has approached me to help with this. But we're talking a decade here - the DOL seems willing to waive the annual reporting, but then we've got amendments, VCP issues for late restatements/amendments, possible SSA and SAR issues with the IRS, etc.

That's when I realized that just abandoning the plan would be much easier (and faster). The DOL has confirmed that all deposits have been made, and they just want it done. The money is at a product platform, and I believe they can be a QTA (whether they want to be might be another question). The DOL admitted that the plan sponsor could do that... but then the sponsor asked what were the consequences to him.

I can't find anything on this, and the DOL agent is also similarly stumped. Anyone have any ideas? I'm thinking that if all the money is in the plan, there wouldn't be any consequences, but I obviously don't want to say that and then see him hit with a massive penalty from out of the blue. Thanks.

Do the change in status rules apply to employer contributions to an HRA? It's all employer money, so no employee pre-tax dollars are going in. I get that the employer can always write it in as a requirement to follow the change in status rules, but is it a requirement under the Code?

I am hair pulling on deemed 125 Compensation.

The document provider we used for EGTRRA included deemed 125 Compensation by default in the flush document. However, the PPA restatement now offers a choice as to whether or not deemed 125 Compensation should be included or excluded.

Does anyone know what this even is?

How it is quantified?

How is it something that would otherwise ever be excluded from Compensation if it is a benefit that is provided to employees in the ordinary course of their employment, and even if it was included wouldn't it be summarily excluded if we excluded taxable fringe benefits?

Very confused.

We have a non-safe harbor 401k. Employer match is discretionary. We want to change the match formula this year. My questions are:

1) Are we required to notify the employees?

2) Is there a deadline for notifying employees? For example, the notice must be sent 30 days before beginning of the year, 1/1/2015.

3) Can we change the formula now effective the beginning of the year, 1/1/2015?

Thanks for your help.

Hello, everyone!

A question. We have an ERISA trust that maintains funds for training union apprentices. For whatever reason, an entity with the same name as the trust was recently incorporated as a New York corporation, under which the funds are intended to be managed. The trust isn't registered anywhere, except on its Form 5500 filings. There is a trust document.

Does this constitute a plan termination, if we move all trust assets and liabilities to the new corporation? We simply want to roll all of that into the corporation and operate exactly as before. Does anyone have familiarity with this issue, and perhaps suggest any authority on it?

Thanks in advance for any help!

ok, need some help, I just read an article titled Inactive 401(k) accounts need greater protections.

The article states the following: current law also allows employers to force out account iwth more than $5,000 . For example, a plan can force out an account balance of $20,000 if less than $5,000 is attributable to contributions from the employer.

I am asusming what the author is referring to is if the account balance is made up of $16,000 Rollover money and $4,000 employee/employer contributions, the plan could disregard the rollover account when determining if the balance can forced out.

do you agree???

Thanks

A participant is receiving standard distribution paperwork as part of a plan termination and claims to be married through a Common Law Marraige.

The participant says they don't have a copy of marriage certificate, which we standardly require and that such certificates do not exist in this case. Questions?

What is standardly requested (to protect the plan administrator) to prove the existence of a Common Law Marriage?

Is Common Law Marriage recognized under ERISA (I assume that it is, if it is a legal marriage in the state of "celebration" and because people in a common law marriage can file joint income tax returns)?

Thanks