austin3515

So much of what we do is semantics, right? LOL. Thanks!!

I've tried and failed to find out if an entity with no plan currently can adopt the Plan mid-year. Parent bought the stock recently, and are within the transition window but they want to add them mid-year, 2016-16 references amendments, but I think that's different then adding participating employers (i.e., adding a Participant Employer is not an amendment and so doing so is not covered by 2016-16). My own personal conclusion is as long as they are on by 10/1 it should be ok because they would be able to set up their own SH 401k plan in that scenario but I can't find anything at all on point.

Call me mr. practical but I'm not adding a new QNEc source to fund $50 of corrective contributions for one person. I'm just depositin to 401k. If there was some massive correction ok fine. If we were doing QNEC's to pass an ADP test, sure I would do a QNEC source,. I've always said this, whic is 100% true: IT's still a QNEC it's just deposited to the 401k source. Oh and by the way QNEC and 401k are both treated teh same for vesting, etc. I know, I know, maybe the hardship trearment is not the same. So maybe one guy might get $50 more of a hardship than he is entitled to. Is it worth all the rigamarole with forms, signatures, RK updates to the platform for $50 of QNEc to one person? Even two or 3? MAn I'll tell ya I think the answer is no.

I heard the same but I don't see how it is even possible since this is how they paid for the entire bill.

Anyone have a sample notice they have seen / prepared that they are willing to share? I assume some of the big providers have put something together...

Also just used to pull a listing of all plans effective post 12/31/2022 so that we don't file extensions for them!

I had to google it, LOL...

I have a very very very very high degree of expertise in life insurance policies. In fact I can teach anyone everything they will ever need to know about life insurance in just a few short words: Avoid life insurance in plans at all costs!!! This has been a Public Service Announcement.

Thank you, that is correct! Relius eventually sent me the PDF on how to use it. What a sweet system. I hope others get some use out of it too. To reliably identify all plans with no Roth was a huge time saver!

I'm supposed to be able to dump into Excel or whatever format a listing of all plan provisions. It's under "Data Export". Anyone know how to do that? I cannot get it to work. I'm waiting for Relius to provide some direction but figured I would ask y'all! FYI I am trying to very efficiently figure out which clients dont have Roth or who are affected by LTPT rules.

Pretty sure they got out of that business entirely. They won't even answer questions anymore. But they might be ablet o tell you the names of 3rd parties who would do it. Heck I would do it for you except I'm too busy...

I am using Code 3D no matter what you say but someone pointed out that the instructions say as follows: "Pre-approved pension plan - A pre-approved plan under sections 401, 403(a), and 4975(e)(7) of the Code that is subject to a favorable opinion letter from the IRS" There is no reference to 403bs. I personally think it is merely the fact that there was no pre-approved document for 403bs when someone wrote this but wasn't sure if the IRS ever clarified that, etc. Also curious what you guys are doing (indicating 3D or not).

The only conceivable testing issue (absent top-heavy) is some thing like having the owner's kid come into the plan and be an HCE right from the get go. You would have to run an ADP test on the non-safe harbor portion of the plan. But that should be pretty rare. Even more rare than that I'd say is someone being an HCE based on comp alone before they were eligible but that is possible.

Question 1 (proposed answer) Maybe I have it. I think it is because 403(b)(7) applies to the entire custodial account, and only provides a hardship exception for payroll deduction contributions, whereas 403(b)(11), which applies to distributions from annuity contracts, only adds distributio restrictions to elective deferrals. There is no statutory language that limits the availability of in-service distributions for non-elective deferrals. This is consistent with the EOB which indicates that amounts held in annuity contracts, other than elective deferrals and QNECs/QMACs (in other words Match and Nonelective), can be distributed after any "event" such as attainment of any age, years of participation, etc. I think this reading actually answers Question 2 as well.

Question 1 The way that I read Section 602 (and the new paragraph 403(b)(17), 403(b)'s may only permit hardship distributions from elective deferrals, QNEC's and QMAC's. Nothing else is listed. No one seems to be saying that 403(b) plans that were previously allowing hardships from Employer Contribution accounts are no longer allowed to do so, so I must be missing something. But the plain English words in (17) do not list any Employer sources besides QNEC's and QMACs??? Question 2 Sort of related to Question 1 - people seem to be saying that the hardship rules are now aligned for 403bs and 401ks, but 403(b)(7) plans (mutual fund funded plans) seem still exclude employer contributions, while insurance based programs do not (that's from my reading in the ERISA Outline book). I assume this is generally agreed? I'm surprised it's not mentioned in many of the write-ups I've read because I've always found that particular inconsistency to be by far the most baffling provision in all of retirement plan law.

There is also no point to the relief. Making something more complicated in an effort to make that same process more simple is crazy. I'm nowhere near old enough to retire so I am bitter.

I really did get a good laugh out loud chuckle when I saw that the relief for sending out notices to unenrolled to participants was to send them a notice. I mean that is really hysterical.

My own unsophisticated commentary is that the "unenrolled participant exception" is too complicated for most. It requires 2 different sets of notices to be sent out to two different groups of people. That's real clunky. And don;t get me started on the new electronic delivery rules. It's bazaar. So complex I'm sure half of all plans are just going to go back to paper notices. Sure maybe Empower and Fidelity can program their systems to track who gets paper and who gets electronic but not my guess is many recorkdeepers will not be able to do it. It's as though they have no idea how most employers are structured, and what their focuses are. They think every 401k plan is with Empower on a full 360 bridge. So disconnected from reality.

I just hope they quickly add this self-correction program. Not everything I would have hoped for but a helluva lot better than the actually filing.

Sounds like the kind of advice that was the basis for my post 👍 Any recommendations on timing?

Certainly one side of the coin is to find that email and say "see I told you so". But regardless I have heard from many many people that this is not such a great approach. Also, theoretically, that "I told you so" email is saved in my workpapers, and those we do not get rid of.

HA from what I have heard that is precisely why you don;t want to keep them forever!

Just trying to decide how many years worth of old emails to save.

Practically speaking almost no one will do this, but the question is, is it an option. There are a lot of payroll software packages that are very antiquated (I'm sure some still run on DOS). There is not a team of programmers out there working on upgrading those services. So in order to avoid compliance failures they may just eliminate them altogether. Anyway, antiquated software is the first thing that comes to mind as an answer to your question (especially one being used on a large scale).