Santo Gold

In a plan merger, are the balances of prior terminees also transferred into the new 401k plan? These terminees can take their money out of the original plan at any time. but if they do not and their balance is over $5,000, they have to be rolled into the new plan, is that correct? Thank you

The plan does not have QJSA or QPSA. Lump sum only distribution option. The plan does require spousal consent to name a beneficiary other than the spouse. Benefits had not commenced at time of death. I looked at ERISA 205. Am I correct then that the reasoning behind the new spouse being beneficiary is that he never waived his right to the benefit, even though he was never named as beneficiary (and even though the ex spouse still has a beneficiary form on file)?

A participant in an ERISA 403b plan passes away. She named her spouse as beneficiary and son as contingent beneficiary. Years before her passing, she divorced then remarried, but never changed the beneficiary form. Is the beneficiary form with the ex-spouse still applicable under ERISA? This is taking place in New York, which has a divorce revocation statute, which would seem to no longer permit the ex-spouse to be a beneficiary. But would NY state law take precedent over ERISA if ERISA would call for the ex-spouse to be the beneficiary, since the form was never changed? And if the ex-spouse is not the beneficiary, would the contigent beneficiary (the son) now be the beneficiary would the current spouse be the beneficiary? I am not sure if a QDRO was ever produced after the divorce. We are having an attorney look into this but I was hoping for any comments on this as we go along. Thank you

Thank you very much. Appreciate the replies

Its January, 2023 and we realized that there was a minor mistake on the 2018 5500-S/F filing. The client would like to file an amended 5500-S/F. EFAST will only allow back to 2020. Can we still file an amended return for 2018 on a 2020 form, or is there no way to file an amended return at this late date? Thank you

We have that in the plan document, distributions from after-tax at any time. So if they want this to go outside of the plan, it would seem like a conversion to a Roth IRA would be allowable. Conversion takes place, its out of the plan which is what he wants.

We have an owner-only 401k/PS plan. He has the after-tax employee contributions and will be converting to Roth for 2022. Is it recommended that he keep the converted $$$ in an plan account, or after the conversion move the $$$ to a Roth-IRA outside of the plan (plan allows for withdrawal of after-tax at any time)? Thank you

That is interesting, but do those amounts stay in forfeiture or once in forfeiture, they can be used to offset future contributions? Also, if the plan terminates, can those amounts be used to offset employer contributions or pay expenses? Thank you

The problem that the plan sponsor has pertains to the confidentiality of providing individual SS#s to the mutual fund company/recordkeeper without the consent of the individual, in order to set up a default account for them. That they could run into legal problems by doing this.

Thank you; I will look into PBI. A related question: If the plan sponsor does not have an address for a former participant and if PBI cannot assist, can the plan sponsor send the balance directly to the state as unclaimed property or in this type of situation, does it still have to first go to a plan account before passing this on to the state?

We have a plan that missed providing deferral opportunities for quite a few employees over the years. They are going to go back and make good on calculating and depositing what is required for these individuals. However, several individuals have left the company years ago and they may not be able to locate them on their own. Any recommendations on a public or private services that can be used to search for lost participants? Thank you

Just to draw a distinction, these would not be leased employees, as those would have to actually be employed through a leasing agency. With a leasing agency or leasing company, they are independent contractors and the issues discussed above make this a bad idea to try to include them in the employer's 401k plan.

I have not run into this previously, but I have a potential start up 401k that would be pretty routine in many ways, but the owner wants to include most sub-contractors in the plan. He started his career as a sub-contractor and feels strongly that he wants to offer a 401k to them as well. He is considering a safe harbor 401k match plan. But how would that work in regard to withholding pay for individuals who are not on payroll but are paid without any tax withholding? Would the SubCs indicate that only a portion of their income be paid to them while $X.XX goes into the 401k? Can they employer provide the match on a payroll basis if they are included? This seems like it could get messy...... Thanks

Thank you; I think I understand.

Sorry for asking so many basic questions, I just do not work many auto-enroll plans. Since this is a 403b with a QACA and we have immediate entry for employee contributions. Can we still have a year of service plan entry eligibility for the employer match and still satisfy the QACA requirements?

Thank you for those replies. This non-profit is very generous and wants to maintain its match formula of 50% up to 10% of pay contributed. But, they were failing ACP frequently with the match. So they want to consider an auto-enrollment feature but keep the same match (the match already is 100% vested). Could they do auto-enroll with the employee contributions with up to 6% of pay after year 3, but still have the match at 50% up to 10% of employee contributions, or does the auto enroll have to go up to 10% for the employee contribution as well? Thanks

Can a plan sponsor with a 403b have an automatic enrollment feature where the match is 50% up to 10% of pay, all 100% vested? What limitation would there need to be as far as the initial defaulted employee contribution? Thank you

Thanks very much for the replies.

Is it permitted to name a non-US citizen as a beneficiary for a US 401k plan? The intended beneficiary is not a US citizen, does not live in the US and does not have a US social secuity number. Thank you

Simple enough, an individual who does significant work for herself but does not have a separate business name/EIN. She wants to start a 401k with her SS#. Is this permitted? Thanks

We have several 403b plans and none have a named trustee. The document software that we use does not even permit a trustee designation. Yet, we are being asked for a trustee by a new recordkeeper that the plan is transitioning to. Any thoughts? Thank you

Thanks to all for the above replies. I have recommended an ERISA attorney for this matter. It is intimidating knowing that you might have to go back all those years. Tracking down someone who may have qualified back in 1996 and has been gone from the company over 25 years, just seems almost impossible to capture everything perfectly going back that far.

It was a specific department that was kept out but the document never said that they were. I was going to go back to 2019 (to get the 25% QNEC rate) for the submission, but that was my real concern, does the IRS arbitrarily decide how far to go back or do we go back as far as we can on our own when submitting to the IRS.

We have a 401k plan that has excluded certain employees when they should not have and as a result, quite a few never were given the opportunity to contribute to the plan. The plan sponsor wants to go through EPCRS, make the participants/plan whole. But how far back do they go on this? The plan was effective back in the 1990s and as far as we know has always excluded a certain group of employees (when they shouldn't have). Do we have to go all the way back? Do we go back 3,4,5,or 6 years, go through EPCRS and wait for the IRS to determine if we need to go back further? Thank you

What about if the condition (legit) is that these are on-call or as needed employees, who essentially make their own schedule and work the hours that they can/want? Many in this catagory work less than 1000 hours a year but some, work over 1000 hours. There is the hours worked element involved but their work is irregular and not necessarily determined by the company. It sounds like it might still not fly as a condition for sharing in the ER contribution, but, any different thoughts? Thank you