austin3515

Luke, this is all covered under ERISA, for whatever that is worth. So state law should not apply. I don't understand why another federal law would trump what ERISA says. Probably another important aspect of this, though a technicality, is that the participant's individually are not investing in the stock. The Trustee is holding the stock for the benefit of the participant. That's a subtle but probably crucial distinction.

Ironically the client happens to be an RIA, so this is much more in their turf. But they do hire me for all of their top-secret investigations (not just their TPA work!), so they're one of my best clients! This is a very interesting alternative to a cumbersome daily val platform... It's probably only right for 1% of the universe of plans, but it's interesting. Ultra low cost being the best part.

Client wants to set up 3 pools of money: Conservative, Moderate and Aggressive. The udnerlying securities will be stocks and bonds. Has anyone figured out how to handle fee disclosures on this? Note that we will be doing quarterly valuations, and participants can choose to switch quarterly. And it's a small group, almost exclusively investment experts. They're not really worried about would happen if the market tanked kind of a thing. Maybe they should be, but they know their employees well. [i.e., what I am really interested in here is the fee disclosure requirement].

That is interesting...

So the Hartford will not do a fidelity bond for a multiple employer plan. Does anyone have any recommendations of insurers that will accept it?

I have a client who got a substantial package from them analyzing their plan unrequested. Has anyone seen this before? Is this just marketing? Just to be clear, I'm not suggesting there was anything inappropriate about it. My client was just surprised by the sheer size of it and it's customization to their plan (which appears to have been done based on 5500 data).

I just don;t think that matters is my argument. There was no failure with respect to the payroll deduciton aspect of the arrangement - only the match. But I am curious to hear what others would say on that topic.

PP, why would you treat as an improper exclusion from deferrals? There was no failure there. The fact that they might have contributed had they known about the match is why they get the match as part of the correction.

Plan has immediate eligiblity for 401k but a 1 year wait for the match. As an example, Employee A was rehired after being gone for just a year and was eligible for the match prior to leaving. The client thought that they had re-satisfy the match eligibility so they did not provide them with the match as they should have. They did provide them with the ability to make 401k contributions. So clearly someone who made 401k contributions would need to receive the match because they were eligible. But what about those who did not contribute? The employees were told they needed to resatisfy the 1 year wait for the match, and it is therefore conceivable that they decided not to participate based on their understanding that they were not eligible for the match yet anyway. Should we assume they had some contriubtions and provide them with a missed match correction?

And don;t forget to cap the deductions out on the payroll system correctly!

I think they would be more amenable to it if it would bankrupt the sponsor or close to it. That sounds dreadful.

Well I asked him, and get this, My participant terminated and he said that provision should be moot because she was terminated before the end of the 2 year period. So we only have to meet the notice requirement. Not a super-lawyer for nothing, that I can tell you. EDITED: No wait, I still think there is hole here... The deferralks should have resumed in 2016 while she was still active...

Kirsten does your firm handle ROBS on a regular basis? Perhaps I will refer her to you... The more I think about this the more I want out... She really needs someone with more expertise. I just said in my engagement letter with her "Hey you're on your own for this ROBS stuff, I'm just helping you with the 5500 and eligibility,." If not do you know of any who do? The people who do these decided it's probably more profitable and less risky to just set these things up and tell the clients they are on their own...

It's a big thing these days. people charge like $10,000 to set these things up so people can use retirement assets to start a business (Roll-Over for Business Start-ups). For a lot of people without the option they cant start their business, so I get the temptation. Lots of headaches for sure for us to administer, but I certainly see the motivation... No one thinks the IRS's chosen acronym is a coincidence!

Hmmm.... I don;t meet this requirement....

In my example it is one single person. For 2014 through 2016 the attorney is telling me that we use the 50% correction, and for 2017 through today we can use the 25% correction. I'm cutting corners in terms of the precise dates, but that's not really the purpose of the question anyway. The true purpose is whether you can split the baby as they say and calculate using the 50% for the periods outside the SCP/Significant failure window, and 25% for those inside. This guy is listed as an ERISA "super-lawyer" and has loads of accolades. He is definitely the real deal.

I have an excellent ERISA attorney telling me you can split it. He says he's confirmed with the IRS. Anyone else been down this road? I'm taking it because it;s the best answer for my client, but I'd like to tea it up as "isn't this great attorney I recommended for you?" and that most people were under the same impression as me...

But if I close the stock to new offerings won't I run afoul of BR&F? The stock is only offered to the owner? The stock has been available for about 5 years now. I inheritted it from a CPA I work with a lot and tell you the truth I regret it. Thank you Kirsten!

Failure began in 2014 and goes all the way through today. Question: Can use the 25% correction option for the most recent years? Or because the failure goes back so far, do I have to use the 50% to correct for the whole enchilada?

What does a small start-up need to disclose to participants about employer securities held by the Plan, in particular for those who do not have any money in the Plan. All participants have signed forms confirming they have been offered the opportunity to invest in the stock, but none have taken up on the offer. Should participants be receiving income statements? Do we just share the valuation of a share of stock?

Slider, good call! I remember even that a raffle for an iPad is not allowed. i.e., if you sign up for the 401k, your name is entered into a Raffle for an iPad. Subtle but it's very clear a match is the exclusive means of rewarding participation in the plan.

Not trying to do something crazy. I'm asking crazy questions to try and get to the bottom of what the applicable rule is. I'm talking about bonus and overtime type stuff. Nothing remotely close to a universal availaibility issue.

OK Kevin C, so BF&F is the issue? That means I have a LOT of flexibiility to exclude a lot of comp in a SHNEC plan, then agreed?

Ahh, but why am I subject to 414s? For example, do I ever have to satisfy the comp ratio test for a definition of comp for elective deferrals? I thought I had lots of flexibility on the defintion as long as I used a safe harbor definition of comp for ADP testing?

But what about a Safe Harbor Nonelective Plan? The paragraph sited above deals exclusively with a Safe Harbor Match Plan (the SHNEc is 401k3b). To me that means I can essentially use any exclusions I want with a SHNEC, but is anyone aware of any red-lines? For example, what if I excluded all regular wages and only bonus wages were eligible? I'm using an extreme example based on the assumption that some rule somewhere must prevent this. What rule would prevent this?