BG5150

In our version of the 403(b) Plan adoption agreement (Volume Submitter), there are these options for post-severance distributions. The one's with X's were the ones chosen. The second one seems to eliminate any 401(a)9 issues. (X) Lump Sum Installments only for RMD (X) Installments Ad Hoc (partial) Custom

MoJo, where in the Relius doc is that provision?

I'm no too keen on adding something like that to a pre-approved document. I'm surprised no one ever had this situation come up before.

403(b) Plan allows for installment payments to terminated participants. No other partial withdrawals are allowed. Participant started installments two years ago and wants to stop. What are his options? Must he now take the entire amount? He can't just stop right? Otherwise that would be a loophole around no partial withdrawals. Document is silent on stopping installments.

Get a POA. call and ask for a supervisor.

true. i guess I'm just used to throwing those in with the rest of the reports in our annual "compliance reports"

402(g), 415.

Consult an ERISA attorney.

Automatic Enrollment question: Plan is starting ACA at 3% for all new EEs plus anyone who is currently deferring less than 3% of pay. How do you treat those who have chosen a dollar amount instead of a percentage?

An initial corrective QNEC must be applied no more than 12 months after the year of deferrals. In this case (I'm guessing), it's the 12/31/23 plan year. Therefore the deferrals in consideration are from 2022. The QNEC must have had to have been applied no later than 12/31/2023. However, if you wait until 2025, you are in EPCRS correction and can therefore apply a QNEC again. (Keep in mind, though, correcting under EPCRS, you cannot test otherwise excludables separately; they must be included in the test and might increase the QNECs substantially.

I see no problem with it if the DRO otherwise satisfied all the conditions to make it a QDRO. And make sure there is no ambiguity to which plan each provisions refers.

As long as no HCE has a higher rate than any NHCE then the test should pass on a current/contribution/allocation basis.

Plan excludes Union employees. January 2022, non-union employee, Tim, takes $10,000 loan for 5 years. May 2024 Tim becomes union employee and is now in an excluded class in the plan. What happens to the loan?

But if it's after 4/15, it's not a distribution of an excess anymore, right? It's just part of a 'regular' distribution.

Participant defers $30,000 all Roth across two plans in 2023. Age 35. ($15k each plan, say) It's too late to take out the excess. So does that mean the earnings on the excess will stay in there and get earnings on top of that and come out tax free in 40-50 years?

EPCRS says to distribute the money. However, I'm thinking because EPCRS says "in contravention to 401(a)30" and neither individual plan went over (a)30, we cannot use this method. And just to be sure, if a participant has their individual tax return on extension, they still cannot make the distribution because the regs say prior to April 15 and mentions nothing about the individual's tax deadline?

I'm just wondering if they can do an excess deferral distribution at all. Age 40. No distributable event. And if he can't take the distribution, where can I find the backup. A cite to EOB or the code would be appreciated.

In 2023, EE deferred 7,000 to plan A and 22,000 to plan B. Neither plan had excess contributions under 401(a)(30). Nor, individually had an excess over the 402(g) limit. Is it too late to correct the participant's excess deferrals? If so, where can I find that language? I looked in the EOB, but didn't see it. Is it in the code somewhere, too?

So just to be sure: the NHCE NEVER worked more than 1,000 hours and NEVER qualified for the profit sharing component of the plan?

Participant ina plan took a distribution in early 2023 from his account with Provider 1. Never cashed the check. In the interim, the plan transferred to provider 2. Meanwhile, the check got stale dated and Provider 1 sent the proceeds to Provider 2 who put it in their Unclaimed assets account. Subsequently, the funds got paid out to his IRA. The participant is looking for a 1099-R. Neither company is claiming responsibility for the 1099-R. Provider said because the check went stale dated, they have no responsibility. Provider 2 is saying they won’t doing it either since the distribution didn’t happen on their system. Any idea whose responsibility this is?

Plan as-written was participant directed but everything was invested in a pooled account. For a bunch of years. Currently, they are with a record-keeper and everyone is directing their stuff moving forward. What's the fix for the prior years?

An 11-g amendment letting them in for that particular year only. Done.

They don't have to. But I always continue to file. 10 minutes of work every year is less than than it's gonna take going back and forth with the IRS as to why the form doesn't have to be filed in the first place.

Does the plan have fail-safe language to fix coverage issues? If it does, do you even have 11-g available?

For such a big plan, I doubt is would be feasible. If you offer it to one, you have to offer it to all.