Santo Gold

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

Would a plan sponsor of a 401k with a match (non-safe harbor) be able to require exclude certain groups of employees from sharing in the match (regardless of hours worked)? And then could they specifically say that employees with less than 30 hours/week will not share in the match? (I don't think this would be permitted).

Thanks to all for the replies. I don't understand one aspect of this however and maybe you can help me think this through. Let's say the participant had $5,000 gross distribution, received a check for $4,000 and taxes paid of $1,000. And since this was a duplicate payment, there was actually a $10,000 gross distribution and $2,000 in taxes. All in the same plan year. The participant pays back the 80% amount of the duplicate distribution which is $4,000. A revised 1099R is prepared for that year showing...a $6,000 distribution (since the extra $1,000 in taxes is not being repaid from the IRS)? While that would tie in with what the participant actually received as a gross distribution, it is still $1,000 more than what he should have received. And while the employer can file a revised form 945, this would presumably show an extra $1,000 was paid. But it doesn't sound like the IRS is likely to pay that back either. So the employer can perhaps use that credit towards a future withdrawal/taxes. Is that correct? Thanks again.

We have a 401k participant who was accidently paid out twice, in separate calendar years (the assets were pooled). These were cash distributions, taxes were withheld and remitted to the IRS for both distributions. 1099Rs were prepared for both distributions (2 different years). The participant has agreed to pay the excess back to the plan. How would the plan administrator go about getting the money paid in taxes back from the IRS? Does the participant pay the entire amount (including taxes) back to the plan and recoups the taxes when he files his amended tax return? How would we go about reporting this for the participant's records? For the second distribution he would need to file an amended tax return and a corrected 1099R for that year would be needed as well. Is that correct? Thanks for any comments.

Thank you

Are company contributions to either 401k/PS plans or cafeteria plans 401(k) plans subject to FICA taxes? Do they add to the FICA wage base? I believe that they are/that they do, but I’m reading things that suggest otherwise. I know that they are not subject to withholding taxes.