Plan has auto enrollment. Rehired employees become participants on the date of rehire. Must the auto enrollment start with the first paycheck, or must the employee be given a window to opt out before it begins?

The record keeper says that 30 days notice is mandatory and they will issue the notice 7-10 days after the first payroll that includes the rehired employee. That means the auto enrollment would actually not begin for about 60 days, unless the employer handles it manually rather than through their usual automated process.

I have a client who wants to implement a policy mid-year by where participants can elect to waive their salary reduction for premiums on a pre-tax basis and re-characterize it to after-tax.

Won't the employer lose their FICA/FUCA savings?

The salary reduction is to be in place for the entire Plan Year - allowing them to waive it mid year violates this correct?

Any other issues you guys see?

Thanks!

I feel sorry for this lady so I am trying a long shot. Would anyone consider a washing machine and dryer for a Hardship withdrawal?

The Plan doc says safe harbor rules?

Participants became eligible as of 04/01/2013 and began 401(k) & roth contributions at that time.

Employer changed payroll companies some time in May, 2013.

New payroll vendor DID continue deductions for a few weeks and then abruptly stopped on four participants. (one actively enrolled and three auto enrollees)

Fast forward to now. Employer discovers this issue (none of the 4 participants has noticed or brought this up to the Employer as of yet).

So....a year has passed. The Employer must provide the 50% QNEC for these participants as well as the match (which is allocated and deposited annually at year end), yes?

The participants have been receiving quarterly statements but I seem to recall as much as we might like to think the participants bear some responsibility after this amount of time, the onus is still on the Employer to properly correct.

Also is it really the 50% QNEC - wouldn't I use the participants' actual contribution percentage since we know that?

Additionally I believe the Employer needs to correct the 2014 year-to-date as well with the QNEC?

Much has been written with respect to the IRS clarification that pre-tax reimbursement of individual employee health insurance premiums violates ACA and can invoke the $100/day/participant nuclear penalty.

I'm concerned that even post-tax reimbursements can be troublesome based on the following sentence in the recent Q&A:

An employer payment plan, as the term is used in this notice, generally does not include an arrangement under which an employee may have an after-tax amount applied toward health coverage or take that amount in cash compensation.

Consider a scenario where small employer says "I'm dropping group coverage but encouraging all employees to obtain coverage individually so I'm willing to reimburse you (on a taxable basis) up to $500/month if you prove to me you have coverage."

If I don't give them the $500 if they don't have coverage haven't I violated the "cash compensation" proviso above and IRS would consider my program an "employer payment plan" subject to penalties?

I have a participant who moved from "regular" employee to union employee, and thus now ineligible for the plan. She has a balance from deferrals and ER contributions.

Can she take a hardship distribution?

A recent BenefitsLink discussion considers whether a "3(16)" service for an organization unaffiliated with a plan's sponsor to serve as a plan's administrator would or wouldn't result in a meaningful reduction of liability that an employer-associated fiduciary otherwise might bear alone.

Assume a situation in which the employer's owner and chief executive is restrained by a court order that bars him or her from serving as a fiduciary of any ERISA-governed employee-benefit plan. Assume further that none of the employer's employees is willing to serve as a plan's administrator.

In those circumstances, could appointing (with court approval) a "3(16)" service provider as a plan's administrator help?

What do BenefitsLink commenters think about this?

Is it possible for a large controlled group to offer different (self-funded) health plans at its different locations or to diffirent branches of the company without violating the nondiscrimation rules? Similary, can they vary benefits based upon salaried or hourly status at the locations? Seems like many employers do this but I can put my finger on how they make it work. If testing is done on a controlled group basis, how does this work?

A single participant plan has option for voluntary non-ded EE contributions. Guy makes first and immediately converts to Roth. So non-taxable event.

Is a 1099 required?

Code G with taxable amount = $0?

thank you

We have a Municipality that currently has a 457 plan and a 401(a) Money Purchase Plan. I believe that the MPP should be required to have compliance testing and 5500 filings.

Am I correct? The Municipality is a Medical Rescue Squad Authority.

Also. they have questioned me about an ACT 205 filing. And although I now know more than I want to about ACT 205 filings for the State of PA, I am not sure that I know how to go about filing.

Any advice.

Thanks

Participant terminates but had a series of in-service distributions during the course of his / her participation in the plan - so when he or she becomes a prior year terminee and no longer has his / her balance included in the test - are the in-service distributions that happened within the past 5 years also disregarded - logic would say yes... is that true? Thanks

We know the IRS re-canted and allowed filing of multiple Forms 8955-SSA under one TCC so that administration firms do not have to obtain a TCC for each client.

My memory (a very suspect item) says the IRS also specifically allow said firms to file the forms without specific approval or authorization by the plan sponsors. (if paper is filed, sponsor or plan administrator must file, but if filed electronically no signature and no pre-authorization)

My usual problem, I cannot locate anything here (only 2 threads using 8955-ssa and fire), nothing in the instructions, and nothing in the IRS website.

Does anyone else have such a memory, and more importantly for my attorney - a cite?

Thank you all, and have a great weekend

Plan sponsor let one NHCE enter the plan prior to meeting the plan's service requirement in error. If they adopt a retroactive amendment to let this one person in, do they also have to provide an SMM to all participants?

This is a strange one, at least nothing that I've ever seen. Welfare benefit plan (disability) always had two components - one union, one non-union. Different benefits for each component. Union benefits self-funded by employer general assets, non-union funded by insurance. All filed as, say, plan number 501.

At some point in the past, the client split this into separate plans, but apparently never told their TPA. They hired a new TPA to handle the union plan, and for 2012 the new TPA filed the union plan as 501, apparently correctly. The other TPA, who apparently was never informed of this, filed the non-union plan for 2012, also as plan 501. So two 5500 forms were filed for plan 501.

Now we enter the picture. To correct this, it seems logical to file an amended 2012 filing for the non-union plan, using new plan number 502.

My question is this: I've never seen a return amended for a wrong plan number. Will the e-fast system correctly accept it as an "amended" filing form if the plan number is changing? Or can you only "amend" a filing for the same plan number?

I've got to think this can't be the first time a plan has been filed using an incorrect plan number, and that an amended filing is ok, but I'd feel better if someone who has actually seen or done it could confirm that.

Thanks!

We are working with a client who wants to begin charging an annual $50 administrative fee to terminated participant accounts.

Their recordkeeper is trying to figure how they're going to handle this. Once they deduct the fees, where should they go? I don't think they could be added to the Erisa Budget account, as this should probably only hold funds from excess revenue. Any thoughts?

I am working on a plan of about 1000 participants. I provided the client the 2014 quarterly amount, which was 25% of the 2013 minimum. Subsequently, I realized that, in calculating the death benefit portion 2013 funding target, I hadn't accounted for the 417(e) PVAB. If I would have, the 2013 funding target and, consequently, the 2014 quarterly would have been higher. I think that I should be accounting for 417(e) since, when a death benefit is paid, 417(e) is taken into account. Therefore, I see myself as having a few options:

Thanks!

If the employer limits all accounts to a specific vendor ( Fidelity, Schwab, TR Price etc) does the limitation move the non ERISA 403(b) into an ERISA 403(b) plan?

thanks

I am new here but have read dozens of posts and realize that you guys are really knowledgeable and generous with your help. And I really need help. (I posted first on ESOP thread, but have moved to this Misc. Benefits thread because my question is about Employee Stock OPTIONS, not Employee Stock Ownership.)

I went through a nasty divorce, and 4 years later am still trying to finish the settlement. My Ex works for a huge publicly traded global company. Ex and the Plan Administrator have been friends for over 20 years. I cannot get a full and straight answer from the PA as to what my choices are to get my 50% (awarded by the court) of the employee stock options in the account. Every time I try, the PA contacts my Ex and then feeds me Ex's version of what he wants me to know. I finally went back to court and got a Court Order for Ex to authorize the company to give me the full information, but it is still being filtered by the PA.

I did finally get to see the account statements and have learned (after the Court Order) that in these 4 years, Ex has exercised and sold some of the stock. This situation of some sold shares and some unexercised Options probably has complicated the decisions on how to divide the account assets.

The only condition in the divorce decree is that the asset is to be settled in a way to cause the least tax liability to each of us. He is in a very high tax bracket and has to consider AMT. I am on SS and in such a low bracket that I owed no taxes the last 3 years.

How can I learn if the employer's Plan allows for Options to be transferred to me (and exercised at my own tax level) or what other choices I have in this asset division?

Thank you for any and all help.

Realize this not a cross tested question but seems to be the best place to post.

We have been approached by a new Company that was spun off from a larger Company - new ownership and no relationship to prior Company.

They want two classes of employees with different eligibilities. For "field employees" they want six months of service with monthly entry dates. For all other employees they want immediate eligibility.

For coverage I assume that I have to test each eligibility requirement separately for coverage. But the Plan Sponsor is telling me that since both eligibility definitions would cover otherwise excludible employees all of the employees are aggregated for coverage. I am thinking that each class of employees need to be tested. Any thoughts would be greatly appreciated.

Is anyone aware of guidance that either blesses or prohibits a plan from accepting rollovers by participants who have terminated employment with the plan sponsor? I have a particular plan sponsor that is interested in doing so.