Santo Gold

It is an ERISA plan. I am just not sure what records are available going back 30 years. If records are incomplete, would you file a best estimate as to assets and participant counts? Is that acceptable?

We are early in the research process but a 403(b) plan that was created in 1989 apparently has never had a plan document. I would like to eventually get them through VCP. Would this be acceptable since we have nothing to go on? Thanks

Referred to a 403(b) plan that was created in 1989 and has never filed a 5500. Well under 100 participants. I am not sure how far back any records go and what can be obtained. How far back can/should we go to correct via DFVCP? Also, is the DFVCP amount capped at $750 for non-profits no matter how many late filings? Since this is a 403(b), I know that through the 2009 plan year, the information required on the 5500 was pretty limited. I do not believe financial data was required. Would this make 2010 plan year an acceptable starting point? Thank you

Thank you Larry. That helps to clarify this for me.

I wanted to confirm that I researched this correctly. in 401k plans, self-employed individuals can make employee contributions up to the due date of their personal tax return, including extensions, which could mean a 2019 calendar year 401k contribution can be deposited as late as 10/15/20. But if the same employee/employer has a SIMPLE IRA, the employee contribution deadline is 30 days after PYE? From the IRS website is below. So my conclusion is that different timing deadlines apply whether a SIMPLE or not? Also, does the coronavirus relief change anything for SIMPLE IRA employee contributions? Thank you When must I deposit the salary reduction contributions? You must deposit employees’ salary reduction contributions to their SIMPLE IRAs within 30 days after the end of the month in which the amounts would otherwise have been payable to the employees in cash, according to IRS rules (IRC section 408(p)(5)(A)(i)). For self-employed persons with no common-law employees, the latest date for depositing salary reduction contributions for a calendar year is 30 days after the end of the year, or January 30th. The Department of Labor rule for deposit of the salary reduction contributions may be stricter. They do have a 7 business day safe harbor rule.

This would be the Plan sponsor paying the fees, not the plan. Advisor is an RIA so what you stated seems very practical. Thanks to all

We are a non-producing TPA firm strictly fee based with the clients. We have an existing financial advisor who is inquiring whether he could bundle his fees with ours, we get paid annually both our fees and his fee, and then cut him a check for his portion at year end. We would 1099 him for the amount. This is what he is proposing. Does this sound A-OK for both us as the TPA as well as for him?

Unfortunately there is nothing in the plan document or loan procedures that address this specific situation.

Since the plan only allows for payroll deduction repayments, would credit worthiness, or questioning the ability to repay really play a factor? Once the loan is established, the participant cannot stop making repayments, since they are coming out of the participant's payroll automatically. The participant would have to stop drawing paycheck for the repayments to stop.

A 401k plan allows for plan loans for any reason. However, a participant who is requesting a loan recently declared bankruptcy, which the company is aware of because they receive a court order to terminate his wage attachment for child support. Can or should a Plan Administrator deny the request for the loan since they have reason to believe (bankruptcy) that the plan loan would not be paid back? Thanks

Pretty cut and dry. Thanks very much.

We are looking at an employer who terminated a plan earlier this year and recently paid everyone out. He wanted to start a new one but he's got to wait at least 12 months. But he also owns 2 subsidiary companies. If either or both of the subsidiaries were not participating in the original 401k plan, could they start a plan up immediately, even though the owner of the main company and the 2 subsidiaries had sponsored the original plan? Thanks for any replies.

We TPA for a small 401k plan whose parent company is actually from the UK. The plan only covers the US employees. We had three trustees for the plan, 2 of which were not US citizens while 1 was a based in the US and was a US citizens. The US trustee left the company a few days ago. He will be removed as a plan trustee. Is there a problem if there are no US trustees for this plan? Thank you

Do employees with balances under $5,000 have to be given distribution options or can they simply be forced out? One of my plan sponsors wants to go hyper-streamlining in the distribution process and the day that an individual terminates employment, if they have under $5,000, send them a check and inform them they have 60 days to do something with it. Assuming only lump sum distributions are permitted, could they do this? Doesn't the plan sponsor at least have to give them their options and maybe a 30 day window to decide before taking the force out route? Plus, if over $1,000, the only force out option is an IRA. Thanks

I have a similar situation. Our loan policy language in the plan document does not directly state that defaulting on a loan prohibits the individual from taking a second loan. Given that, if the loan is in default (has been for several years), the currently employed participant has been 1099'd on the loan balance, is under age 59-1/2, the plan allows for more than 1 loan at a time, and a second loan would not exceed the $50,000 threshold (factoring the outstanding balance from the 1st loan), could he take a second loan? Thanks

That's an interesting thought. But he did have 100% vesting in his 401k and safe harbor and did not take those out. I've seen language as you described that seemed to apply more to the participant's entire account balance, but not to just a portion of their overall account balance.

A calendar year plan was created with a short initial plan year 7/1/15 - 12/31/15. It had a 3 year cliff vesting schedule and the plan's vesting computation period is calendar year. Service prior to the effective date of the plan (7/1/15) is counted. We have an individual who was hired 1/1/15 and has 1000 hours in 2015 and 2016. Then he terminates employment in early 2017 without 1000 hours. So, does this participant have 2 or 3 years of vesting service? It would appear to be only 2. But because of the short plan year, does the participant get credit for all of 2015 and then also for the short plan year as well, giving him 2 years of vesting service as of 12/31/15? Another question: The plan amended to a 2/20 vesting schedule as of 7/1/17. This was after the participant had terminated. If the same participant was 0% vested at termination in early 2017, would he now be 20% vested due to the new vesting schedule, even though he was not employed at the time the new vesting schedule was adopted? Thank you

Doctor who was 100% owner of his practice sells his practice to new owner (not related to the original owner), who is now the sole 100% owner. The old owner continues to work as an employee in the practice now. The 401k plan was top heavy before the sale. The sale took place in 2018 (it is now 2019). (1) since the sale, for the 2019 plan year, is the account balance of the prior owner now excluded for top heavy calculations.? If so, does that continue for.....how many years? forever? (2) the adult son of the prior owner is also a plan participant and also continues to work after the sale. He was a key by attribution before sale. Starting in 2019, is he a key employee, non-key, or excluded from the top heavy calc? Thank you.

This may be too simple, but if for 2019, an individual over age 50 contributes $6,000 to his roth IRA, can he still do $25,000 to the 401(k) plan as either a pre-tax 401(k) contribution or as a Roth elective deferral to the plan? Thank you

If an employer wants to allow for after-tax employee contributions, then those contributions are tested in the ACP test. If the plan operates as a safe harbor match, does that mean that ACP test passes the inclusive of the after-tax employee contributions? Thanks

I'm not sure if this is complicated or not, just that I have not run across this before. Individual A has a solo 401k plan for himself. No other employees of his business. Now he is going to go work for a small employer as their employee. This new employer does not have any retirement plan. Would the new company be able to "take over" as the plan sponsor of the solo 401k plan, allowing their employees to become participants as well as allowing Individual A to stay in the plan? I don't see why not, but, it just seems odd. This is not a merger situation since the company has no plan to begin with. Thanks

A small engineering firm has a 401k plan. They are showing an operating loss for the 2018 year. The plan sponsor would still like to deposit a discretionary PS contribution. The plan document is clear that is permitted. However, (details not clear on this), he has a contract with the state of New York for some/all of his business which states in part that there can be no PS if no profits. I am recommending legal counsel for this but just wondering: Does an ERISA plan document take precedent over a state contract like this? Thanks

The individual is in the medical field. He was paid by a health provider for services provided (not passive income), perhaps more than 1 (separate 1099s). They paid and reported it as paid to him, the individual. I think his personal reporting is that it is part of the S-Corp revenue. But it sounds like the 1099 should have been paid to the S-corp, not him. Would this mean that it cannot be used as a basis for pension contributions through the S-Corp? Thank you

An individual establishes an S-Corp. He is the only owner, no employees. He wants to start a 401k plan for himself. His income for 2018 consisted only of 1099-MISC income, coded as nonemployee compensation (box 7). It was paid to him and reported on the 1099-MISC but was coded using his SS#, not the S-Corp EIN. Is this income eligible to be used for 401k plan purposes? Thanks

An employer wants to terminate his 401k plan in 2019 and start a SIMPLE at the beginning of 2020. Can the employee 401k accounts be rolled immediately into the SIMPLE or is there a 2 year wait? If a 2 year wait, then if the owner and/or participants wanted to have their 401k money in the SIMPLE, they would have to park the money in an IRA, wait to years, then move it to the SIMPLE, does that sound acceptable? Thank you