Santo Gold

Could the participant have a legit argument that the plan document states that distributions can be made upon termination of employment. She did have a termination of employment. She was rehired, but in the SPD there is no mention of what happens if you are rehired. Therefore, since she did have a termination of employment, she had a distributable event and should be paid out?

A participant left employment for 1 day and was then rehired and is currently employed. She wants to take her money out of the 401k plan due to her being unemployed for that 1 day. She cannot take it though because she is now employed again, correct? No other in service withdrawal options would apply. Thanks

A small profit sharing plan under audit was brought to us as their plan document was not amended timely. It was amended for EGTRRA around 2009 and that was about it. The auditor recommended updating their document, which was done and they now have current document. However, while the auditor accepts that, since the document was not timely amended, they auditor is moving forward with audit cap to avoid DQ. The plan appears to have been operated properly in all other areas. Just checking on what an estimate amount of penalty the IRS would likely impose in this situation. Any ideas? Also, while hiring an ERISA attorney is never a bad option with audit cap, will it really make much difference in this case? Is the ERISA attorney mainly there to negotiate a lower penalty? Thank you for any replies

Thanks to all for the comments

I plan sponsor started a new 401k plan in 2020 and gave instructions to the payroll company that a 1 year/1000 hours eligibility requirement to enter the plan was desired. No auto-enroll. Someone at the payroll company dropped the ball and did a 3 month elapsed time eligibility condition and included auto-enroll with it. The payroll company has kind of fessed up to it being their mistake. We now have several participants with employee and employer dollars in the plan due to the early eligibility and auto-enroll who were never intended to be in the plan. is this something that can be fixed via an IRS correction program? The employer would like to treat these individuals as ineligible and refund their 401k amounts if possible all due to mistake of fact. Other options would included amending the plan to do away with auto-enroll and the 3 month eligibility, but that would help for new employees and would not fix the existing employee problem. He could also bite the bullet and keep everyone in the plan, but terminate the plan and pay them out. But that would mean he could not start up a new plan until at least 2023 and he would like to have a plan in place without disruption. Thank you for any replies.

The document was written that anyone employed on January 1st of the current year would immediately participate and after that, a 1 year wait. So we can get the doctor and her spouse in the plan for the current year. I advised that they check with the CPA, but if the only answer is that he can be a 1099 employee, does that prevent him from participating in the plan? Still checking on that.

A new solo medical practice established this year. A 401k plan was created this initial year as well. The doctor has no employees at this time. The doctor's spouse is working during this initial year to help establish the practice. The doctor would like to pay the spouse for services and the spouse would then like to deposit a portion of that compensation into the plan. With no other employees, the doctor does not currently have a payroll service and would like to not have to use one until employees are hired, likely next year. Without using a payroll service, Is there a way for the doctor to pay her spouse for (legit) services to the new practice so that he can be considered an employee? If he is paid as a 1099 employee, can a plan document be written to include him as an eligible employee for the 401k plan, which would allow him to contribute 401k/Roth/after-tax? Thank you for any comments

Thank you

For a hardship withdrawal, is the 20% tax withholding required? Thank you

We have 3 companies that are part of a CGroup and each wants to sponsor a separate 401k plan just for their eligible participants. Lets assume that there are owners who would be eligible for all 3 plans. Would each owner (or participant) have separate 415 limits in each plan? Or does the CG mean that they share only one 415 limit across all 3 plans? Thanks

Our TPA firm obtains authorization from the plan sponsor/plan administrator and files the 5500 for the company. Can the 5500 signature from the plan sponsor/administrator be digital or does it have to be a "wet" signature in order to be valid? thank you

This 401k plan does permit hardships for non safe harbor reasons. But does that mean it can be any hardship that the Plan Administrator deems to be an acceptable hardhship reason? Assuming it meets the immediate and heavy financial need, would an employee purchasing a new furnace for which she has no other means other than the plan be acceptable? She is a non-HCE and we assume that any future requests for new furnaces from other employees would be reviewed and accepted? Thank you

What type of person/organization would you reach out to if you had a client who wanted to establish an Employer Educational Assistance Program? Anyone you can recommend? Thanks

It was an asset sale. I understand, I just thought there was room to argue that since the new owner bought the old business and she is still working for the new owner, that perhaps in this case it is not viewed as an employment termination for RMD purposes.

We have a 401(k) Plan participant with a balance in the plan, DOB in 1946, still employed, is a non-key. This year (2021), the company was purchased by another business. The old company is no longer in existence and the 401k plan is being terminated (not a plan merger). The new owner has hired most of the prior company's employees, including the above individual, and is crediting service with the prior business for all purposes in the new owner's 401k plan. Balances from the old plan can be rolled into the new plan immediately. Would an RMD be needed for this individual this year? We could do the RMD before she rolls her balance into the new employer's plan or after the rollover? And if one is required from the old plan, would it also be required from the new plan in subsequent years even though she would continue to be employed? Thank you.

I have a small investment group (5 people) looking to start a new 401k plan. They will want individual brokerage accounts for each participants. In general, would they receive a 404a5 notice from the brokerage account company? For example Schwab or Fidelity? If not, would the prospectus' they receive as well as the contract information that details what their account fees are be enough to satisfy the content requirements of 404a5? Thank you

Makes sense. Thanks

Yes, I meant to keep the question on the 8955, not the 5500. Thanks

Realized there is another question: On the 8955-SSA, would you now show all previously reported terminated/vested participants as paid out on the final 5500?

The plan has been reporting on an accrual basis. The post merger deposits were for the old plan.

The plan has been reporting on an accrual basis. The post merger deposits were for the old plan.

We have a 401k plan that was merged into another plan towards the end of the plan year (calendar year). The merger date was 12/15. The last 401k contributions were deposited into the new plan as was the full employer contribution for the plan year. Preparing the final 5500 for the old plan, would you report either that final 401k contribution as part of the overall contributions in the old plan? Same with the employer PS? Thanks

Not a DB plan; just a 401k. No PBGC

For calendar year 2020, if a plan covers only 1 individual and that individual is not the owner or spouse, would they file a 5500(S/F) or a 5500-EZ? Thank you

Thank you for your replies