Bird

You're allowed to have both - you could do, say, 2% to traditional and 2% to Roth.

Good questions. You said this 4 times, but never explained how. "...knowing the voluntary made in 2018 will be pulled out shortly" is not passing ACP. The apparent reason for the refund is, in fact, that the ACP test failed.

Generally, I wouldn't blink an eye and would allow this person to start contributing after they turn in their enrollment form (actually we don't get that involved in that end of it but if someone asked that's what I'd say). All or almost all of our plans allow changes every pay period, and in that scenario it is 100% ok. If the plan only allowed changes every quarter and you wanted to get hypertechnical, you could take the position that this person elected 0% as of July 1 and has to wait until Oct 1. I think that's silly. But it raises other questions, like did the person have the opportunity to defer in time for a July 1 start? Just a caution - don't confuse "open enrollment" a la a health plan with "enrollment" in a retirement plan. This person was a participant from July 1 and changes in deferral elections after that are dictated by the terms of the plan (or as noted, by administrative procedures).

Of course this can't be done...I'll go out on a short limb and add "period." Salary deferrals must be withheld from pay. How is land withheld from pay? Well now you're saying the match is the land contribution; that's slightly different...still not possible. I agree that it's a PT. (Even if possible somehow, for tax purposes, it would be treated as a sale of the land, and that's almost certainly what they think they are getting away from.) I'd venture that this is just a typical fugazy idea that needs to be nipped in the bud. It's usually not wise to have a corp. own land, so they probably have either gotten bad advice or done things on their own with no advice in the past. Your value added is in telling them "no."

As stated above, and I agree, the only consequence to not making such contributions is 100% vesting. Well that's...interesting. I mean, isn't it the employer that has abandoned the plan? Seems contradictory to abandon and report as abandoned.

Say "oops/sorry" and move on. (I think) the only consequence would be for potential losses due to lack of knowledge of the situation, and 1) it's unlikely there are/were any, and 2) it can't be worth an actual lawsuit. Ask what they want to do about it... Mr. Practical

Shrug. We like to think that we've seen nearly everything and take nearly every precaution to make sure that people don't screw up despite their best efforts, but sh*t still happens. I have indeed prevented some clients from doing stupid stuff like this through hyper-vigilance and experience (sixth sense), but at the same time still have people messing up. It's not your fault.

A plan must have a sponsor, but if this "retired" owner was ever a sole proprietor then I think it is well established that said proprietorship never really goes away, and could sponsor the plan. It probably makes sense to terminate and be done with it, but if there are illiquid or other non standard assets it might be easiest/least expensive to keep it going. I have a few that are still going for no good reason, other than the plan seems to have taken on the spirit of an old friend.

To prevent the default he would have to catch up on all of the missing first quarter payments by June 30. If he's over 59 1/2 I don't think I would worry about it at all; if under, just convince whoever is preparing the 1099-R to code it with an exception for disability and move on.

This is on our checklist. Whether we pay close attention is another matter...I'm probably most guilty of ignoring it. Yes. Well, it is the Plan Administrator's duty, not ours, but practically, we're the ones checking. It's generally more about the beneficiary - participant waives QPSA by naming someone else and spouse consents - but yes, I think if you read your plan language carefully the participant really should waive the PRSA while living if they want the spouse to be able to take a lump sum.

Is this an entry for the "dullest career" competition? I agree with RBG - they are participants as of 1/1, but the deferral feature simply isn't open yet. BOY count = 10.

Is the question - Does the plan have to be formally terminated in order to distribute assets? (I'd say yes.) or Do all assets have to be distributed? (I'd say no.)

Interesting/thanks. It's definitely not a formal arrangement but good to know about this. That's my concern. I'm going to prevail on this, simply by refusing to continue this arrangement, but no one seems to understand those implications. The feedback I get is "the insurance company is happy to take the premiums." (shaking head)

Hi, I'm hoping to get feedback for this non-paying business topic, although it is definitely benefits-related. I'm the treasurer for a small non-profit. We had one employee for many years, and she was paid under the payroll system of another non-profit - you could say there is a casual/friendly relationship between our organizations but no way is there any common control or commonality of any kind. We reimburse the other employer for all wages, taxes, etc. (I'll come back to "etc." later...) This all set up way before my time, BTW. Is this arrangement legit at all? I was thinking it was ok for the other organization to be a common paymaster and process payroll as a convenience, but as I'm looking at more closely it seems there needs to be some common control or close relationship between employers, which does not exist here. Back to the "etc." part - she's been participating in certain benefits of the other employer - LTD, life, and a 403(b). Health was even offered but declined way back when. I feel very strongly that she was NOT an employee of the other organization - they did nothing but cut her checks - and she should not have been covered under any of these benefit plans (weirdly enough, we are participants in a pension plan through yet another organization, legitimately, so she's been in a pension through one org. and a 403(b) through another). Unfortunately she died recently, and we are in the process of hiring a new person. I want to make sure we do it right, and am advocating strongly to NOT have anything to do with having the new person paid through the second organization (although they remain perfectly happy to do it). It's...downright fraudulent, IMO, and yet, I guess because "we've always done it," no one seems to grasp the severity of the situation. So - I'm looking for confirmation that I'm right, or if I'm not, say that so I can adjust my thinking.

It's the web address...

I'd say the short plan year is irrelevant to the calculation. Vesting is based on years of service. The cop-out answer is to say read the document, although I'm not sure it would be addressed specifically. I'd be inclined to apply the new schedule to everyone unless it was addressed directly in the amendment or you can otherwise find language saying not to.

Yeah, that's what I was thinking.

Has anyone used the penalty relief program ($500 flat fee)? Experience? We had someone use it, filed/paid in January, and they've received two letters so far saying "we need more time" implying they are researching it. Seems weird...or maybe not, I can see how hard it might be to cash a check and check a box.

That's more about perception than reality. True, if you do nothing, the contact(s) will lose the surrender charges and eventually the cash value will equal the accumulated value. But so what? The annual gain is not some extraordinary number, and a similar asset (in terms of risk) would appreciate similarly.

Agree with this. Were checks written? If so, who is the payee? Good luck and keep us posted.

It's common but I don't think it is required. I'd push back and ask why it's so important to take it off... Personally I think it's a good idea to have "IRA FBO..." or similar language so the participant can't deposit it into an after-tax account.

My definition of "fully reconcile" is to record all activity - contributions, distributions, dividends, sales, purchases - and compare that to the cash account. So, e.g., the cash account is $1,000 at the beginning of the month, and transactions noted above net to +$500, the cash account should be $1,500. If not, then we missed something. We're tracking this in a spreadsheet with individual investments, so at the end of the year, the info is there to condense into a list of assets, which we provide with the participant statements. Depending on activity, it is borderline insane*, and we are increasingly bailing out and just looking at year-end info and saying "it's possible something was missed but if you want that certainty you have to pay for it" or words to that effect. *But just for the record, we once found a $30,000 transfer to another brokerage account - unrelated to any of the parties to the plan - in one of those godawful "managed" accounts where literally no one could pay attention. And many, many times where someone forgot they made or didn't make a contribution.

No a surprise at all, but that doesn't validate the approach, IMO. I don't see it as much more compliant that doing nothing. It probably doesn't matter because I think we are all getting a free pass since the DOL has not done their job. For some reason it irks me that someone got paid for what amounts to mumbling and not saying anything.

In case anyone is wondering, the idea/theory behind the law was to allow participants to coordinate/adjust their personal risk tolerance with the knowledge of how plan assets were invested, presumably by changing other assets. Add it to the list of well-intentioned but silly requirements we deal with.

It is if you're not fully reconciling assets (we are, generally). I'm not arguing with you, it's not complicated if your systems are set up right. Maybe I don't get out much but I get the sense that there is widespread noncompliance.