I have a participant that is on leave and the document allows the loan payments to be on hold for up to 12 months.

Occasionally the participant has a paycheck due to working for a job for one day - thus generating a paycheck. Since the paycheck is small it takes out his percentage of 401k contribution, but does not take out the loan payment? Is there an issue with this? Should the deferral not come out either? Thoughts.

Local church sponsors a 401(k) plan. The church is a member of a large national denomination. Trying to determine who is the proper employer of the minister, the local church or the national assocation? Minsterial responsibilities are performed for primarily for the local church. For some reaosn there has been a determination that the national associatIon is the proper sponsor, I'm just not seeing it immediately. Is it commonf for the assocation rather than the local church to be treated as the employer?

Thanks in advance for any guidance.

Does anyone have general experience with general coverage / underwriting requirements for group health insurance policies subject to Illinois insurance regulations? We are doing some due diligence on a target company that has 200+ full time employees--about 10 salaried employees and nearly 200 hourly paid employees. They appear to have a small employer group health policy with Aetna that covers only a handful of employees--all among the salaried employees. Their broker has indicated that the policy limits coverage just to salaried employees--i.e., that the term "full-time employee" for group health plan purposes only includes "salaried employees" so no need to offer or extend coverage to the 200 hourly-paid employees. Everything I've seen, however, suggests that Aetna policies in Illinois generally require group coverage to be offered to all employees (meaning anybody that is a common law employee) that works 25 or more hours per week. (Although the Aetna underwriting summary suggests that the 25 hour standard may be increased or raised, I've seen no indication that Illinois law or the Aetna underwriting rules would permit an employer to exclude all full-time employees paid on an hourly basis and have never other rules designed that way.) Even if that were somehow true, I cannot see how they could qualify for small employer coverage as the Illinois small employer rules seem to make clear that the 50 or less threshold is based on broad full-time employee count without regard to salaried vs. hourly. Thanks for any assistance anyone is able to provide.

It's rumored that DOL has ramped up audits (I guess they call them "investigations") of health plans for ACA compliance, if anyone has encountered one can you post a copy of the notice letter and laundry list of documents they want to see (with client info redacted)?

Thanks

I've read the recent (and previous) guidance from the DOL regarding how a terminating DC plan should deal with missing participants. However, I've never been able to find guidance about how a strong, active (i.e. non-terminating) plan should deal with missing participants without violating any fiduciary duties. For example, we have a DC plan whose administrator would like to know how to deal with missing participants with small account balances. Obviously the admin can and should use the same search methods used for terminating plans, but what happens to the account balances? Roll them over to an IRA? Escheat to the state? Do nothing?

Thanks in advance for any help.

Does prompt payment apply to self-insured health plans?

Can an employer contribute to an HRA on behalf of active employees and prohibit benefits from being used until the participant reaches retirement age? Would this fall under the retiree-only exemption?

We don't have it (it was 3 providers ago and they purge data after 7 years, and this has been 10!!). What do you think they will do? Anyone been in this situation before?

calling Tom Poje - just want to confirm my knowledge of the facts on SH and TH:

If a plan has a more liberal eligibility for 401(k) deferrals (i.e. 6 mos of service) but makes the participants wait 1 year of service for the 3% non elective safe harbor contribution, then the plan in effect loses the top heavy "free ride"....is this accurate?

Company A is owned by

Joe 59.23%

Other Owners 40.77%

Company B is owned by

Company A 46.5%

Joe 31.34%

Other Owners 22.16%

The other owners all own 5 - 10% and are not related to Joe nor are they participants in the plan.

Are they controlled or just multiple employers under one document.

I know they do not fall under the parent subsidiary rule, since the "parent" company does not own 80% of company B. Not sure when testing for brother sister how you handle Company A's ownership in company B.

thanks

Long Monday.... and controlled groups get very confusing late in the day

Kind of a strange one here, or maybe not so strange. Two spouses, each with sole proprietorships, in a non-community property state. The businesses are such that they clearly meet all of the spousal noninvolvement requirements of 1.414©-4(b)(5)(ii) below, with the possible exception of the piece I have emphasized below. My question is, how is this determination really made? Yes, I know we can get a tax attorney's opinion, but any idea what parameters they might use? Anyone ever seen any additional guidance, or had a real situation like this? I mean, does the fact that the spouses talk and work together when making a decision constitute "management" in the organization? Seems like you potentially get screwed either way...seems like facts and circumstances to the utmost degree.

I'd love to hear any opinions. Thanks.


(5) Spouse—(i) General rule. Except as provided in paragraph (b)(5)(ii) of this section, an individual shall be considered to own an interest owned, directly or indirectly, by or for his or her spouse, other than a spouse who is legally separated from the individual under a decree of divorce, whether interlocutory or final, or a decree of separate maintenance.
(ii) Exception. An individual shall not be considered to own an interest in an organization owned, directly or indirectly, by or for his or her spouse on any day of a taxable year of such organization, provided that each of the following conditions are satisfied with respect to such taxable year:
(A) Such individual does not, at any time during such taxable year, own directly any interest in such organization;
(B) Such individual is not a member of the board of directors, a fiduciary, or an employee of such organization and does not participate in the management of such organization at any time during such taxable year;
© Not more than 50 percent of such organization's gross income for such taxable year was derived from royalties, rents, dividends, interest, and annuities; and
(D) Such interest in such organization is not, at any time during such taxable year, subject to conditions which substantially restrict or limit the spouse's right to dispose of such interest and which run in favor of the individual or the individual's children who have not attained the age of 21 years. The principles of §1.414©-3(d)(6)(i) shall apply in determining whether a condition is a condition described in the preceding sentence.
(iii) Definitions. For purposes of paragraph (b)(5)(ii)© of this section, the gross income of an organization shall be determined under section 61 and the regulations thereunder. The terms “interest”, “royalties”, “rents”, “dividends”, and “annuities” shall have the same meaning such terms are given for purposes of section 1244© and §1.1244©-1(e)(1).

What is the IRS position on contributions made after 2 1/2 months following plan year end in the case where a funding deficiency would occur if only 2 1/2 months of contributions were credited?

DOL doesn't like it, is that correct?

Even the MB instructions remain ambiguous on this issue:

Despite the new general prohibition on pre-tax payment or reimbursement of individual health insurance premiums it appears that corporate payment or reimbursement of 2% S corp shareholder premiums is still essentially pre-tax via the IRC 162(l) deduction taken on the shareholders individual return.

See IRS Notice 2008-1 which has not been rescinded to my knowledge.

Anybody disagree?

Has anyone successfully obtained an HPID as required in 45 C.F.R. § 162.512 for a self-insured multiemployer welfare plan? The process seems to involve registering a "company" with HHS. I'm not clear on how a multiemployer plan would do this. Potentially register the board of trustees as the "company"? I'd appreciate any thoughts.

-Greg

I had prepared and uploaded a 5500 that was due on 8/15/2014. It was all ready, with attachments, on 8/14/2014 and the only thing left was for me to "local sign" (file electronically) on behalf of the administrator. I was at work all of 8/15/2014, but, for some reason, totally forgot about local signing, which would have taken me about 1 minute. This morning I realized what happened and immediately local signed and see that it was accepted. Does anyone have any thoughts/experience on how I can avoid unwanted consequences? Should I call the DOL?

Thanks!

A participant in an ESOP was set to receive distributions over 5 years. Last year the sponsor failed to make the 4th year distriibution. Does the 4th and 5th year distributions have to be taken this year or can they make the 4th distribution this year and the fifth distribution next year? Thank you.

Non-spouse beneficiary inherits a Roth IRA. Are the gains taxable?

I'm sure this has already been addressed on the message boards somewhere, but I can't seem to find it. So please feel free to just post links of where I should look.

Typically if a 401(k) plan wants eligibility to require service of less than 12 months, I offer to set up the document for elapsed time and continuous service, since it tends to simplify administration.

A plan really wants to require a month of service, with a specific hours requirement for eligibility. of course the document always falls back on the IRS 1 YOS standard if the plan's eligibility requirements aren't met.

Lets say its paired with quarterly entry.

What (if any) is the maximum number of hours the plan can require in one month of service? 3 months of service?

i.e. 80 hours in the first month of employment? if that isn't met that they don't enter until they satisfy the standard 1 YOS?

Are there are regs somewhere that address this?

Can a non-profit sponsor both a 403b and a 401k plan at the same time? If so, what are the advantages to having two plans?

I bought a "multi-purpose" product called Ballistol [edited 8/18: was Balliston] Lube to make the squeak go away on my office door (circa 1920), and, in frustration one day after dealing with a sticky trackball that refused to move easily despite cleaning of the removable ball and the points where the ball contacted the case, I squirted a bit of Balliston on the trackball.

Now the thing spins like a globe.

Re-application is necessary from time to time.

My workstation smells a little bit like a mechanic's garage, but the keyboard/mouse manipulator is happier.