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

A former participant is rehired and does not elect to join the plan on their date of rehire. Do they wait until the next entry date to enter the plan and actively participate?

A law firm has a plan with a 1 year (1,000 hr) service requirement for profit sharing. Entry is monthly. They hired a new attorney 12/15/13. She satisfied the requirements 12/15/14. She would enter the plan for PS purposes on 1/1/15.

Unfortunately they told her she would get PS in 2014. Since she is a nhce for 2014 (may be a HCE in 2015, not sure since they use top 20), can the plan be amendment bringing her specifically in the plan by name for ps purposes? I know they could have in December 2014 for sure but was unsure since it is 2015.

I work for a TPA that outsources our actuarial work to another company. Can someone please explain to me the best way to ensure that terminated people with more than 1,000 hours get the 5% THM and ONLY the THM in a DC Plan. We've been told that we need to get rid of the last day rule. So that's what we did. But now we have a plan where we're doing a 6% total allocation, and I'm stuck giving the extra 1% to a term. Shouldn't our document automatically give the 5% THM even though there is a last day rule, because in the document I specified that the THM wll be provided in the DC Plan?

We use the Corbel VS formatted Prototype.

401(k) Plan document has had one-month eligibility requirement for elective and matching contributions for at least 10 year (maybe 30 years; I am not done with my due diligence yet); no exclusions in Plan document. Employer now knows, after discussing with ERISA counsel, that it has an operational error by failing to give temporary employees the opportunity to participate in the plan. Employer is willing to self-correct with QNECs per EPCRS guidance. I am comfortable that the error is not significant notwithstanding the fact that it has gone on for so many years (just a handful of interns and co-ops each year as compared to 150-250 other employees). The issue is what is the "safe" number of years to go back to correct without correcting ALL years (including all closed years). All open years? 4 years? 6 years? If Plan is audited and they find out we have corrected for those years but not all years, what is likelihood of a problem? Alternatively, has anyone ever heard of getting VCP blessing for correcting less than all years? If so, what could we expect going down that road? Blessing if only open years are corrected? 4 years? 6 years? All years for which relevant data has not been destroyed? p.s., don't worry I am not thinking about suggesting that the client have a bonfire and burn some old payroll records.

Payroll clerk accidentally input a deferral change for the last pay period in 2014 as 100% rather than 10%. The final payroll was run and paid in 2014. Employee is surprised and questions HR.

The correction is in process with the record keeper who will send the excess to the sponsor. Plan sponsor will then make the employee whole via payroll in 2015.

Question: is there any reason we need to correct the 2014 W2? Or does it fix itself with the 2015 correction?

Thank you

Benefit in the Plan is a discretionary contribution each year, payable in 15 years. The amounts re not going to be separately invested in a brokerage account. The benefit is essentially tracked on a spreadsheet. Do I HAVE to pay interest? There is a rolling vesting schedule, so I think it is unfair that the participant will be paying payroll taxes on amounts that vest without even receiving the benefit of interest, but ultimately that is not up to me. I just need to know if it is possible to credit no interest.

Say you have a safe harbor match plan and you no longer wish to be safe harbor. When is the ealriest you can amend to not be safe harbor? Do you have to give the employees a certain amount of days notice? In this case, the client wishes to implement a regular match as soon as possible.

thanks

All but 6 cents was distributed in 2014. I s there a deminimus or do I have to file 5500?

I am thinking applying a $2,500 cap on a "100% of the first 4%" match would blow the ACP Safe Harbor because it is possible that an HCE who terminates early in the year might have ALL of his/her 401k matched, whereas other NHCE's might be subject to the cap. Also, an HCE deferring say 1% might have 100% of his/her contributions matched whereas again the NHCE could have less. Note that the reg below merely talks about the ratio of match to deferrals with no exceptions. Everyone agree? Seems strange as this sort of provision obviously disproportionately (although not exclusively) affects HCE's.

From 1.401(m)-3

(4) Limitation on rate of match. A plan meets the requirements of this section only if the ratio of matching contributions on behalf of an HCE to that HCE's elective deferrals or employee contributions (or the sum of elective deferrals and employee contributions) for that plan year is no greater than the ratio of matching contributions to elective deferrals or employee contributions (or the sum of elective deferrals and employee contributions) that would apply with respect to any NHCE for whom the elective deferrals or employee contributions (or the sum of elective deferrals and employee contributions) are the same percentage of safe harbor compensation.

DB plan wants to allow retirees to direct a portion if their monthly benefit to be paid to the employer to cover their share of self-funded retiree medical premiums. Doesn't seem like a violation of anti-assignment under the Code. But what about prohibited transactions under ERISA?

In the middle of terminating an ERISA 403b plan when it came to light the client did not file the 5500 for 2013. The client submitted the late 5500 through DFVCP and paid the $750. Now the client has decided to petition the DOL to have the fine waived claiming they "attempted" to file the 5500 on time, but the TPA's 5500 filing website did not process their original filing attempt.

Question: would the client still be OK to proceed with termination while contesting the late filing penalty or do they need to leave the plan open until this is resolved?

Thanks!