austin3515

Well, I can answer that question! Because the IRS said so in their opinion letter!

Thank you RBG. I hope we're right.

Are any of the national players setting one up? Or will it be more of a niche thing? Why would the big players do this knowing it cuts out their number one referral source, advisors? Or are they setting these up so you can plug and play with your own advisor/TPA? Everyone says the market is moving but I'm skeptical for reasons that I find not to be related to my bias... Employers just seem to be giving up too much control over something that is integral to their operations. That's my take on it anway... You have a few late deposits and they force you to pay $1,200 for a VFCP [edit] application is only the first example that would come to mind...

We;re just listening in on the Corbel/FIS training for documents and they are telling us about these new "Flexible" vs "Rigid" discretionary matches. Basically you have to provide notice within 60 days of funding if there is any discretion related to the ALLOCATION of the match.e.g.., discretion regarding excluding deferrals in excess of x% of compensation, discretion regarding the computation period, etc). Was this new requirement imposed on all document providers? i assume it was, but would be curious to know what else is out there. IT's a pretty onerous requirement...

Is there anything going on out there for these plans? I keep hearing "theyre coming!". Are they? I haven't heard anything. I would expect the Empowers and John Hancocks, etc. to be the ones leading the charge, but I don;t hear anything.

IF a plan document excludes overtime for example from the match calculation, does that present a Benefits rights and features issue? How would that test even work? People with no over time are treated as benefitting the same as HCE's? My brain starts to melt down. I would hav thought that if I passed testing based on a 414s definition of comp I was ok. I have never heard of this before in 20 years...

That solution would not be "administratively feasible" is the point. But I think the DOL thinks more like you which is why if up to me, I do the lost interst and treat as late!

Here's the deal. If they are doing a default enrollment, where everyone is being mapped to QDIA, most can/will accept the deposits before the transfers. The issue comes up where they want to map over a participant's investment elections from the prior recordkeeper. The recordkeepers physically can't do that until those elections are provided, and they are provided as a matter of necessity only with the transfer files (i.e., to ensure that they are the most up to date elections). Part of getting the plan out of blackout is loading those elections. Hence, they can't process contributions until the plan is out of blackout. I hope that clarifies why some can vs cannot process contributions before the blackout. And the question is definitely not whether or not the delay is justifiable enough to avoid treatment as a prohibitted transaction. I personally think that it is. The question is whether the DOL would agree! I think for those of us not in the recordkeeping business it is easy for us to underestimate how complex it would be to process a deposit on a recordkeeping platform when the money is already held by the recordkeeper. I assume it requires quite a bit of manual manipulation - hence they won;t even go there except for a jumbo plan. Especially since the consequence of delay is so insignificant.

I could see the DOL saying, "why wouldn't it be *reasonable* to accept a deposit during blackout? You need to find a better recordkeeper if they can't even take a deposit!" I place asterisks around *reasonable* because I want to make it clear this is not the Webster definition of reasonable, but rather the DOL version of reasonable. Bottom line is, count on the DOL to apply the Webster-definition of reason at your own peril. OK not peril, but don;t count on them to agree... The CPA auditor for MoJo is taking their cues from the DOL.

Not my problem... This was a manager so not concerned. Agreed, but this is very impractical without cooperation of the recordkeeper. Not going to go out and open a checking account for one deposit. So it seems we agree on this point!

For us, and as is the "norm" absent a jumbo plan, the recordkeerper would not take the deposit out of normal systems. I did ask, but we were denied. In my case Alonzo, interestingly enough, it was me who said it should be late, and the auditor who said it would not be. I'm surprised the DOL has never said something publicly along the lines of "a blackout is not the participant's fault" so late is late. Without question the path of no risk is to do the interst calc. But alas that is a pain the @$$... so I did not argue the point!

401k plan is going into blackout and cannot process a deposit until after blackout is over. Therefore one payroll will be a week late. Will that deposit be considered late, or is there a facts and circumstances component to this? My thought is late is late but I have come across differing opinions out there, so curious to see what others thing. I have a feeling the DOL would agree with me FWIW.. Thoughts?

We had to go back and amend a 2015 filing for a Plan. FT automatically: 1) Converted the filing to the 2019 form (per the DOL's requirements). 2) Converted the 2015 Schedule R to a pdf and added it as an attachment (again the per DOL's requirements). Myself and another consultant were absolutely in shock that they did that. We thought we were going to spend an hour rekeying everyhing. I'm telling you, FT William is one of my favorite companies to work with. OK maybe other vendors software would do the same thing, I don't know. If they do, then kudos to them as well.

Sorry, so that means you think this would work then, correct?

I thought that was just a poison pill for the ACP safe Harbor? And for BRF, I would think I was ok because the lower 4% is more generous then the next 6% (in terms of vesting).

Plan currently has a dollar for dollar match on first 10%. I think I can have a dollar for dollar match on the first 4% as safe harbor, and then dollar for dollar on the next 6% as a discretionary match. I would still get to keep my ADP Safe Harbor, but obviously no ACP Safe Harbor. My understanding is that this does not create any problems at all, right? i just have to run my ACP Test.

Sounds like it is probably an Affilliated Service Group. The significance of this is that all "one-participant plans" of a controlled/affilliated service group are considerd in the aggregate to determine if the $250,000 threshhold is exceeded. From the 5500-EZ instructions (2019) "You do not have to file Form 5500-EZ for the 2019 plan year for a one-participant plan if the total of the plan's assets and the assets of all other one-participant plans maintained by the employer at the end of the 2019 plan year does not exceed $250,000, unless 2019 is the final plan year of the plan. For more information on final plan years, see Final Return, later." So interestingly, if the parent's plan is not a one-participant plan because of the kids, then the elder daughters plan does not have to be aggregated with it for purposes of determining the $250,000 threshhold. Although shockingly the above quote from the 5500-EZ instructions does not indicate that the term "employer" includes all employers in the controlled group/affilliated service group (nor anywhere else in the instructions) , it should be read that way in my humble opinion. As Bill said, if non-owner kids are participating in the parents 401k plan, then it is not a one-participant plan. If the elder daughter owns her own S-Corp and has her own plan, then that plan would be a one-participant plan. similarly if she is not considered to be a common law employee of the parent's S-Corp she would not prevent her parents plan from being a one-participant plan. But because the elder daughter has younger siblings who presumably are common law employees of the parents, they would prevent the plan from being one-participant.

yup, thats it!

I was trying to find something in EPCRS that says that in certain situations if impractical you can use the DOL Lost Interest Calculator to adjust a corrective allocation for gains). I routinely see attorney drafted VCP apps take this approach and have never seen it questioned. Can anyone shed some light on this for me? IF we're depositing a $100 into someone's account, we don't want to charge the client $250 in fees.

Interesting. When is the trust terminated? Do they set these things up to run for 5 years or something, and then close them out? And then if none of the employers go bankrupt, essentially everyone in the pool gets their money back plus interest on the investments, less administrative expenses. Is that about right? To your last point I could see where it would be limited to publicly traded companies. I'm sure they set the premiums based on the audited statements.

I definitely understand the Roth conversions, if someone is 35 and converts some 401k, it's still 401k and has to be tracked as such. But let's say the are 62, what then? Can I just call it Roth rollover? Or do I still have to call it Roth 401k conversion? That's really my question.

For an in plan Roth rollover, the money can only be converted to Roth if the participant is otherwise eligible for an in-service distribution by law (I realize the events don;t have to be consistent for regular distributions versus in-plan roth rollovers). Therefore, post conversion, are the amounts pure rollover, and therefore subject to rollover distribution rules? What about top-heavy treatment? Is the conversion added back for 5 years as an in-service withdrawal? Trying to figure out if upon a inp-plan Roth Rollover, I need a "Roth Rollover-Profit Sharing" the way I know for sure I do upon a Roth conversion. Any good articles on this?

Ahh so the participant owns the policy and they buy it on their own? That's how they keep it out of the bankruptcy... And perhaps the corporation pays them a taxable fringe benefit to cover the cost... Pretty interesting. Still something that I could mention in my annual letters or plan design phase. I think its an important disclosure because God forbid this ever happens I could see people saying "I could have bought insurance and you didn't tell me?? I would have "obviously" bought the insurance!" Notwithstanding the fact that they never would have paid for the insurance on their own.

http://stockshield.com/ this company apparently insures against the risk of bankruptcy of the plan sponsor. Sounds too good to be true. Why wouldn't the bankruptcy trustee get the insurance proceeds? Wouldn;t the proceeds inevitably be an asset of the business? Curious if anyone has seen this before or has any thoughts. If it works, heck I'll mention to all of my clients, let them decide if the premiums are worth it. You would think this company would have done their due diligence before they came out with a whole product line...

Just be aware that in Congress' infinite wisdom, they did not extend this courtesy to the earnings on 403b elective deferrals....