I've used a triple stack match and have had sponsors happy to be able to tie some vesting to the stated and disc. amounts.

I've got a sponsor who wants to encourage lower earning participants. Is it possible to run it to put dollar limit caps on the stated and discretionary components, and still keep the plan SH?

My proposal:

SH Enhanced 4% Match

Stated Match 100% on 6% (with a $3000 cap)

Disc Match 2/3 on 6% (with $2,000 cap)

Are the caps allowed on dollars separate from the SH enhanced portion?

Interestingly, never had a late 8955-SSA alongside late 5500's filed under DFVC.

Plan in question never filed a 5500 for 3 years.  Last 2 years of that there were 8955-SSA's that needed to be filed. 

File them late? Or file one consolidated 8955-SSA along with current year?

Once an employee has satisfied the initial eligibility computation period what if he goes under the 1,000 hours for the next plan year? Do you have to do a corrective distribution of his deferrals? Or is it, that if an employee was eligible to defer at one time they they will always be eligible to defer? All I see in the plan document is that "An employee is eligible to participate if he satisfies the following requirement during the Eligibility computation period". It says that you must meet the 1,000-hour requirement to be able to defer but it doesn't mention after you've met eligibility requirements you must have 1,000 hours in the plan year to be able to defer. 

I appreciate anyone's thoughts!

Hello -

I understand that the IRS has a one-year rule where all assets in a terminating plan must be distributed within one year following termination. Is there flexibility here - for example, we have a plan that technically has made all distributions, but now we have received a few uncashed checks. We are getting close to the one year period - do uncashed checks count against this one-year rule and we could have a failed termination. It seems more administrative - now we have to search for the participants, and then decide what to do if the search fails. So again, we may go past one year. An attorney told me once that the IRS does not really take action against a plan if there is good faith efforts applied. Any thoughts?

403(b) Plan allows for installment payments to terminated participants. No other partial withdrawals are allowed.

Participant started installments two years ago and wants to stop.

What are his options?  Must he now take the entire amount?  He can't just stop right?  Otherwise that would be a loophole around no partial withdrawals.

Document is silent on stopping installments.

An employee was improperly excluded from participation in the employer's EACA 401(k) plan. In a matter of first impression (to me), the employee does NOT want to participate in the plan and does NOT want a QNEC for their own reasons; they are not being improperly influenced by the employer. I can hardly believe it myself.

SCP is available, and if the plan sponsor does nothing, it risks penalties. That said, what are your thoughts regarding allowing the employee to retroactively opt out of the plan? The SCP correction would be to document the employee's voluntary opt-out. 

Company buys another smaller company and keeps its operations separate with its own EIN.

But all employees are in the owner company's medical and benefit plans. No specific joinder agreement was signed.

Two options of how to treat:

• Continue filing as Single ER
• Make them sign a joinder agreement and identify as multiple ER plan, with the understanding that prior year is being signed as Multiple ER based on currently signed Joinder agreement

I don’t know if you’ve run across this, but we had 4 instances of this happening in the last month.

We timely mailed extensions with the IRS. Sent them certified return receipt to IRS, Ogden, UT.

We have documentation of the postage paid:

USPS First class Mail

Certified Mail

Return Receipt

We also have documentation when it left our office and reached IRS office in Ogden.

A month after the extensions were mailed, they were returned to us (unopened).  “Return to Sender. Refused. Unable to Forward” sticker was on the envelope.

Unfortunately, the extensions are now late.

Now what??

Sometimes we don't know if there is anyone to report on Form 8955 by July 31 and so we file for extension of 5500 and 8955.  Is there a problem if we file for extension and then the IRS does not receive an 8955 filing?  I'm wondering if we can file 8955 with no participants listed, but I'm guessing the software might block the filing.

Thank you.

The employer changed payroll providers at the beginning of 2023 and for some unknown reason the deferral election of one participant was not properly implemented and for 8 months no deferral was withheld from the participant's weekly payroll.  The employer, however, continued to deposit the participant's elected amount.  We are working on how to properly correct.  My questions are this:

1.  Am I correct that this would meet the definition of Failure to implement an employee election found in Appendix A of the EPCRS Rev Proc 2021-30?

2.  If this does meet EPCRS definition above, then correction would be QNEC equal to 50% of the amount provided by the employee on the deferral election.   Since the employer has actually deposited an amount greater than 50% of the required QNEC, is it permissible to leave the excess in the Plan for this participant?

Thanks

On July 1 my wife enrolled in a non HDHP thru her employer.  Along with this came eligibility to enroll in an FSA which she declined.  I have a HDHP thru my employer.

Does the eligibility of enrolling in an FSA now exclude me from contributing to my HSA for the term of her employers FSA plan year?

Or is it since she declined to have funds contributed to this FSA still make me eligible for HSA contributions?

I have been asked to terminate an integrated Profit Sharing Plan with a 7/1-6/30 Plan Year. The Plan has been in effect since 1986. The accountant has been completing the administrative work from the inception until the 6/30/23 year end. I have been retain ed for the 6/30/24 PYE and the final year with a termination date of 8/31/24. Many issues, like name on the 5500 Form not matching the Plan Document.

The accountant has been filing Form 5500 and Schedule I since 2009, when the 5500-SF was introduced. I was going to file the SF for the 6/30/24 and short Plan Year, BUT the last post by Belgrath raised a question about filing a wrong form. Paul I answered that the IRS could invoke penalties for filing the wrong form.

My question is; should I continue filing the 5500 and Schedule I, knowing it is the incorrect form or switch to the SF and perhaps "raise RED FLAGS" for all the previous years?

All help will be GREATLY APPRECIATED!

Have a SAFE 4th.

DPSRich

Would this requirement also be applicable to participants who have reached normal retirement age (NRA) under the plan? That is, I know that participants must be 100% vested in employer contributions at NRA, but does that mean a participant who has reached NRA under this scenario would be 100% vested in the company match for the entire year even if they left before 12/31? Or would they only be eligible for the match accrued up until they left? (Match is deposited annually after year-end).

Let's say a participant in a 401(k) plan has $100k in Traditional sources and $50k in Roth sources as of 12/31/2023.

Since RMDs from the Roth sources are no longer required in 2024, would it be correct that only the $100k Traditional balance would be considered for calculation of RMD required for 2024?

Thanks.

An employee is the subject of a QMCSO with the employee's child as the alternate recipient. The employee is married to another employee (the step-parent). The parent/employee is enrolled as the spouse of the step-parent/employee. 

May the child be enrolled as a dependent in the family coverage of the step-parent/employee, or should the parent/employee be removed from the spouse's family coverage and enrolled as a participant in the employee's own right with the alternate recipient as a dependent of the parent/employee? 

We took over a retirement plan last year and never received the Roth basis information to calculate if a distribution was qualified or not.  The plan is now terminating.  I know that a termination does not make the roth distribution qualified, but what do any of you do if you do not have the 5-year information from a prior TPA or client? 

Suppose you have a 1-person plan with over 250k in assets, so subject to filing a 5500-EZ. Suppose a 5500-SF is filed instead. Is there a PENALTY for filing the SF? Are you considered to have not filed? I'm not 100% sure on this.

if a plan has been frozen from 1/1/2024 (both accrual and participation are frozen), a participant met all eligibility requirements and should enter the plan on 1/1/2024 if the plan is not frozen. we don't need to test 401a26 test due to SECURE act 401a26 relief; there is no accrual so no 410(b) test. but I'm just curious - in this case, should he/she be included in non-discrimination testing due to meeting all eligibility requirements? or he/she should not be included in tests due to 1/1/2024 freeze date? thanks!

First time filing under DFVC for an EZ.

I recall with regular 5500's, you file the 5500 first, then file the DFVC request.

Seems unclear with the instructions, other than that you cannot do an electronic filing to get DFVC relief.

Mailing address for 5500: 

Department of the Treasury

Internal Revenue Service

Ogden, UT 84201-0020

Mailing address for 5500 under DFVC: 

Department of the Treasury
1973 Rulon White Blvd.
Ogden, UT 84201

So unclear to me if there should be just the 1 DFVC filing, or a 5500 filing as well?

Can a participant have a racehorse as an alternative investment in a 401(k) Plan?

A participant would like to purchase part of a racehorse using their 401(k) account and then hold the ownership in the Plan as an asset. Other than keeping all of it "at arm's length" and watching for obvious prohibited transactions and possible Unrelated Business Income, is there anything preventing this type of alternative investment from being held in a 401(k) Plan?