Does anyone know of a good summary of what specific MANDATORY SECURE/2.0 provisions specifically do apply to a Governmental 501(c)(3) non-ERISA 403(b Plan? A small list, I know, but it would be handy to have.

Thanks.

Greetings:

Here is an interesting question: Say a fully-vested DB Plan Participant leaves (either voluntarily or involuntarily) the company providing said DB Plan. After several years, said employee returns to employment with the same company which is still offering the same DB Plan. Does the Plan Administrator need to have the employee/participant  "reaffirm", in writing, the designated beneficiary for said benefit in the event of death of the participant? Thanks to all who reply in advance!

Hello All:

GENERAL QUESTION not based on a specific example. In General Terms, for DB Plan Administrators who are granted "discretionary authority" by their  Plan Documents, how much can they allow "exceptions" to written rules in the Plan's documents or Instruments before they face potential liability( i.e. potential litigation)  for abuse of discretionary authority? THANKS IN ADVANCE!

As we know, the correction rules for nonqualified plans differ depending on whether the affected employee is an insider or not. If an employee was an insider in the past as defined by IRS Notice 2008-113 by virtue of his status as an officer while he was employed, is he still considered an insider for these correction rules after termination of employment? Thank you. 

Are there any land mines on the discrimination or other 125 plan road for an employer that maintains two IRC Section 125 plans for the benefit of its workforce? Must the two plans be aggregated for discrimination testing?

Hello - I'm running into a question with a plan audit that I am looking for assistance with. Any guidance would be greatly appreciated. Thank you.

Facts:

There are multiple defined contribution retirement plans sponsored by the same plan sponsor within one contract at John Hancock Life Insurance Company (a group annuity contract). The investments are pooled.

Question:

Should plans configured this way have a master trust agreement and follow the master trust reporting requirements for Form 5500's? If the answer is no, is there any guidance or rule that explains this?

Hi

Facts:

Company ABC owned over 80% (but not 100%) by Joe and sponsors DB plan (started 2021)

Company XYZ was owned by Joe 60% but sold in 2020 (i.e. not in existence when the plan has started)

In each case, the remaining ownerships were unrelated.

Joe has 125k average salary since 2021 paid from Company ABC that is used for DB plan purposes.

Going back to years 2015/2016/2017 (*prior to plan inception), Joe had 150k salary each from Company ABC and Company XYZ i.e. 300k in total/per year.

To determine Joe's 415 lump sum for 2024, what is Joe's salary?

Assuming that you can use the 300k average (obviously limiting to 401(a)(17)), can you point to a code section to back this up or a starting point?

Thank you

A municipality wants to set up a DC plan under which retiring employees can defer their accumulated PTO bank when they retire.  The municipality has been told (not by me) that it can set up a 401(a) defined contribution plan for this purpose.  The leave bank will be the only source of contributions to the plan (no amounts other than the PTO bank contributed by the municipality or the employees).  Employees won't be required to contribute their leave bank, they will also have the option to receive a payout at retirement in a (taxable) lump sum.

I can't fit this situation under any of the PLR's, and am concerned this this is really an impermissible "cash or deferred election."  Any thoughts?  Has anyone seen this type of set-up before?  What if I drafted the plan so that employees were required to defer their leave bank at retirement (i.e., try to turn the leave bank into a "mandatory contribution")

I am aware that these amounts can be deferred under a 457(b) plan - but some employees have leave banks that are much larger than the annual limit under 457(b).

Traditional money purchase pension plan covers collectively bargained employees. A group would like to allow a back door CODA by allowing participants to make negative elections. For example, the default contribution rate may be $10 per hour worked, but an employee has an annual options to elect to defer only $5 per hour and take the rest as wages. 

I'm sure I've seen IRS guidance stating a "negative election" of this type is an impermissible CODA, but cannot find it now. Any help or direction would be appreciated. 

Hi

Asking for a friend.

Existing 401k plan with SH and PS.

PS allocation requirement is: Either employed on the last day or accrue 500 hours of service.

Plan sponsor wants to exclude bonuses for 2024 for all purposes.

Can it be done now or has to be tested for participant who fall on either allocation requirement?

Thanks

looking for ERISA attoney specializing in public sector reference, Oregon.  You can DM if you prefer.  TIA.

Thanks for the help in advance!

Has anyone run into a situation where the SSA is sending out wildly incorrect account values to retired participants receiving the "Potential Private Retirement Benefit Information" letter?

I currently have two participants who have reached out to me and sent copies of the aforementioned letter which shows their account values as their recorded account value on the 8955-SSA with two additional zeroes added onto the reported figure.  For example, one individual was reported on the 8955 as having an account value of $10,201 but the letter he received shows a reported account value of $1,020,100?

I understand that this is a "may" letter, but that seems wildly inaccurate and for it to have happened to two participants is a little disconcerting.

Thanks again!

Hi, we're dealing with a likely VCP situation in a 403(b) plan, where the plan was a) administered with a one-year wait, and b) wasn't properly drafted to exclude part-timers. We have no experience with VCP filings, and were hoping to see if there's a gold-standard guidebook out there on doing them, or perhaps some online resource where we can see other/sample filings.

I think it doesn't strictly need to be 403(b) related, if there's a good resource for 401(k) that would probably help. 

Thanks!

Employee was hired 8/22/2022 and terminated 1/31/2023 and worked over 1000 hours in that period. Employee was rehired 8/15/2024. The document states the following eligibility:

Each Eligible Employee shall become a Participant eligible to make Elective Deferrals on the first day of the calendar month coincident with or next following the date he attains age 21 and he completes 6 consecutive month(s) of service; provided that he is an Eligible Employee on such date. If the service requirement is not met in the first consecutive period of months, each successive period shall begin immediately after the preceding period and shall end on or before the first Eligibility Computation Period after which time the Plan will revert to 1,000 Hours of Service in an Eligibility Computation Period. The service requirement under this Subsection shall be deemed met no later than the end of an Eligibility Computation Period during which the Employee completes 1,000 Hours of Service; provided that the individual is an Eligible Employee on the applicable entry date. Service taken into account for purposes of this Section shall be determined under the terms and conditions as is specified for determining a Year of Eligibility Service. 

The Eligibility Computation Period is the first 12 months from commencement of employment to the anniversary of commencement of employment. Then it switches to the plan year of January 1 to December 31.

Since the employee did not work 6 consecutive months but did work 1000 hours in his first period of employment, would the employee be eligible upon rehire? Am I determining this correctly?

 I was told that 'husbands' annuity  $650,000 was bought. for him by the company therefore it was 'his'. I found an letter written by my attorney stating that he, 'husband' bought the annuity, and my attorney knew it was a lie, awarding him an asset, purchased during the automatic orders, with marital funds.

The statute od limitations against my lawyer has expired, but I was denied a motion to open the judgement, and am in the CT Court of appeal--pro se.

Any information about collusion between opposing counsel, automatic orders would be appreciated.

Thank you!

Gaslit

Hello,

In a recent audit, we discovered some errors that my employer made to participant accounts. Basically, some accounts were overfunded. The overfunded amounts are between $10-$1300) so we need to recoup those funds. Aside from informing the employee of the error, are we required to obtain their authorization to pull the funds from their account due to an employer’s mistake?

I have a plan where 3 or 4  people were over-funded for profit sharing due to max comp issues, and severance being used.  But of course they closed their account.

I read 4 articles on SECURE 2.0 provisions and each was less clear than the last.  None of them have nuts and bolts examples about what should be done. 

Do I have to ask for the money back?  I can't tell.

Does the Employer have to deposit the overpayment to the plan's forfeiture account?  This would make no difference as the forfeitures are used to offset contributions anyway, but for the same reason it seems like a ridiculous requirement.

The articles all seem to go back a forth between distributions of vested money before they were eligible for a distribution, and paymetns of funds they were never  entitled to, which is what I have here.

Doctor A, age 45, has her own corporation, Corp A.

Corp A is a participating employer in the ABC 401(k) PSP, sponsored by Group G.

Doctor A decides to move out of state and leave Group G, and her corporation signs a new contract with Group H, which has no affiliation with Group G.

Corp A signs a "Withdrawal as Participating Employer" document to cease participation in the ABC 401(k) PSP.

Group H sponsors the DEF 401(k) PSP. Corp A receives no further revenue from Group G; all of its revenue is now from Group H.

What options does Doctor A have with respect to her ABC 401(k) PSP account, which includes salary deferrals as well as 2 other money types?

Can she establish a rollover IRA? Or is the only option to become a participating employer in the DEF 401(k) PSP, and establish an account registered as such?

We administer a 2 participant traditional defined benefit plan. A 100% shareholder and an employee. The plan has been in place for 10 years and has a calendar year end.

3 months ago the one employee / participant quit to move across the county. She was paid her 100% vested benefit. 

Today the 100% shareholder called and mentioned that she wants to retire next month and terminate the plan.

Question: If the plan is terminated this month and distributed to the 100% shareholder by October there may be a small amount of excess assets that can be absorbed by the 100% shareholder. Must the terminated employee who was distributed fully three months ago be entitled to any of the excess assets?

Thanks!

I am looking for some insight into a QSLOB issue. My client has two business entities that are commonly controlled. One entity conducts the business operations ("Entity 1"). The other entity ("Entity 2") provides administrative support (e.g., payroll, HR, etc.) for both entities. Ideally, my client would like to offer a 401(k) plan for the employees of Entity 2. However, due to the demographics of Entity 1 and Entity 2's employees, and due to the fact they are commonly controlled, offering a 401(k) plan to only the employees of Entity 2 would likely result in coverage testing issues.

My initial thought was to have Entity 2 make an election to be a QSLOB. My question relates to the 50 employee requirement. Specifically, Treas. Reg. §1.414(r)-4(b) requires those 50 employers to "not provide services to any other separate line of business of the employer for the testing year." Am I correct in saying that, if Entity 2 made a QSLOB election, that Entity 1 would be treated as a "other separate line of business", even if Entity 1 does not make a separate QSLOB election for itself?

If the question prompts any alternative solutions that would allow Entity 2 to sponsor a 401(k) plan, I would be interested in hearing them. Thank you in advance for your time.