BG5150

That seems counterproductive on a participant level. Regs say the participant does not have to take counterproductive measures in order to qualify for the hardship. "In order for you to take a hardship distribution of $3,000, you must first pay back the outstanding loan of $5,000." "But, wait, Mr. Administrator. How can I pay the $5,000 back, when I need $3,000?"

Depending on what the TPA was engaged to do, they might not be in a position to make any corrections. It's their duty to inform the company of the issue. As Lou said, the Trustee and Plan Administrator have the responsibility to inform the participant, who in turn has the responsibility to inform his IRA provider. The TPA may or may not be doing the 1099-Rs. As mentioned above, proper 1099's will need to be done from the plan's end. That will either involve the TPA or the asset carrier. A good TPA (like me!) would monitor the situation occasionally, reminding the Administrator and/or Trustee of what needs to be done. Perhaps even help draft the letter to the participant and maybe notify the asset carrier of what happened. But, once the ball is in the Administrator's court, it is up to them to make sure it's done. it seems like the TPA did its job (with the exception of some follow-up) so far. What was the client expecting?

I don't have a direct answer, but however it turns out, just make sure the people who have been gone 5+ years do not get accelerated vesting. More accurately, review the plan document for the forfeiture rules for terminated participants (when their non-vested monies get forfeited), and make sure the people who have been gone awhile rightfully forfeit their piece if applicable.

A loan offest occurs when the participant has a defaulted loan and arrives at a distributable event under the plan.

"When Your Plan Benefit will be Distributed" sounds like a section title for the SPD, not the plan document.

Step after that, maybe EA-1

November 12, to be exact. I just signed up. Yay me!

I think you have to check state by state. NJ doesn't include Sec. 125 in Box 1. Other states do. I am always wary of using W2's to verify compensation. And find out if the client really wanted to exclude 401(k), etc. from comp. i don't think I ever purposely did not include it.

Why is it a 5500 issue? PT b/c it involved a Trustee? if so, I think the $42,000 is the amount involved. It's an operational failure--distributed too much. Correct under EPCRS. Might want to do VFCP, too.

How are you getting near 415 with or without earnings? Must've been a pretty big PS made.

Isn't catch-up $5,500?

There should be a number to call in the letter. Just call and they should probably take care of it right there.

Can you do that?

What is the calculation basis for the match? Payroll? Or Yearly?

How does an affective date of 6/1 get them off the hook? Amend to groups, everyone in own group. Or those who terminated before 6/1 in a group and everyone else in another.

I believe keeping the old policies is ok. Just like taking loans away; the old ones can stay.

No. The loan is commercial debt. Otherwise, everyone and their brother would be taking hardships to pay off student loans.

Which pretty much says the deferrals have to be distributed with earnings. Can this be done under SCP? This is from the EPCRS definitions of an "egregious" failure (which has to be corrected under VCP): (emphasis mine) The member made a deferral that was infinitely larger than the dollar limit. $17,000 / $0.

That's why I'm going to batch transmit all my calender year 2012 5500's at noon on October 15. What could go wrong?

Jim, how do you get around coverage on that one?

I think no, and no. I believe they match up post 7/31 5500's to 5558's and not the other way around.

I see no problem other than the wrong tax id on the 1099-R. Two plans had an error, and the errors were corrected.

I would say they are still auto enrolled, b/c they haven't given any written (or electronic) direction as to what percentage is coming from their pay. So, they should get the annual notice. If they are going from 3% to 4% and they want to stay at 3%, then they'll have to make an affirmative election. Same thing with the 3% to 5% jump--they'll be getting a notice, and if they want to stay at 3%, they'll have to tell someone. About your side note: do you mean to ask if someone transfers investments, but keeps allocation in the default fund, are they still part of the QDIA? (instead of auto enroll?)

If no one really wants to participate, the SH Match could be quite cheap. Get ya out of Top Heavy, too, if there is no PS.

Do you have to redo ADP tests?