BG5150

So, if someone missed the 4/15 date. Do they still have to take the funds out? Or can they wait until have a distributable event.

Great. Thanks!

Participant has an extension on his personal taxes. He had a 402(g) violation--he had two jobs in 2018 and deferred $14,000 to each. Does the personal extension also extend the 4/15 deadline for removing the 402(g) excess?

Where does one indicate that they want to file through VFCP?

So, it would be stupid to "reduce" safe harbor and not suspend it. (Unless you are ok with your testing).

I was never a big fan of using the DOL calculator. However, it's been entrenched in every ecosystem I've worked in. Never heard of either service not taking the results, though. Any stories to the contrary?

I agree!

Is the Excise tax 15%? I always forget which ones are 10 and which are 15. I believe the only time you are really allowed to take the penalty tax and apply it to the accounts is if you are applying under VFCP. Something so small, sure. Add it.

OK, that was the first part of the question. Now to the crux of my inquiry: let's say all the proper notices were produced and provided. The ER want's to reduce the benefit (in effect) What is it meant by a "reduction" in the SH benefit? 4% NEC to 3%? Could they modify compensation that in effect reduces the benefit? For example, exclude commissions? (assume that 414 passes).

Notice 2016-16 states that a permissible mid-year amendment for a SH plan can be: 1.401(k)-3g says you can change SH plan mid year if a) there the company is operating at an economic loss OR b) the ER adds the the annual notice a statement that the plan may be amended during the year to reduce or suspend the SH NEC contributions provided a supplemental notice is given at least 30 days before the reduction. I checked the SH notice that comes out of or doc system (FT William) and I don't see such a paragraph. So, are we out of luck under b)? How would they stop it, then, if they can't afford it but not operating at an economic loss? Can they just send a notice now that says: effective Sep 1, we are stopping the SH? (plus all the other conditions, like letting participants change their deferral elections, etc).

The withholding go into an account of the franchise. From what I understand.

We are planning on amending out the loan feature.

Did you mean $0.65? The $0.65 needs to be added to the affected participants' accounts. I would not file a 5330 for 6.5 cents (10% of the interest).

The company is a large with many franchises. All the franchise payrolls run through their proprietary payroll system.

We have a sponsor that allows loans in its plan. Someone took a loan a couple weeks ago. Thing is, the ER's payroll system has no mechanism to deduct and remit loan repayments! The sponsor is a big company with a proprietary payroll system, so switching to another program is NOT a solution. What can they do? Can we somehow cancel the loan?

Fortunately, testing is not an issue.

I believe the stated match is also 100% vested.

There would have to be active participants at EOY, otherwise they couldn't have entertained a PS for '18. Remember, 'Active' doesn't been 'Actively contributing'

Don't forget the k Plan will be subject to an annual; audit and the attendant costs.

Have an existing 401(k) Plan that someone (not me!) added a SH match to effective 4/1. Obviously this is not allowed. What is the remedy? Send a "Sorry that you got that SH notice, but you really didn't need to..."? Amend the doc to not have the SH features. Good thing is, there was already a stated match in the plan which was the same as the SHM. Testing should not be a problem.

Thanks, Kev. That's what I figured.

We have a plan transitioning to us, can we eliminate partial withdrawals for terminated participants? We prefer full distributions only for them. Is it a cutback? Ok, say we can. Plan signed sealed and delivered. Restated for no partials. Now, there is pushback. The plan wants it back in. Can we do the partial withdrawal now, then amend it retroactively to allow it? Similar to when a hardship is granted when the plan initially allowed it.

Naive questions here: can HOAs be baked into the mortgage payment similar to property taxes and/or h/o insurance?

Not if it's a mistake of fact.

A plan is transitioning into our platform from another provider. We provided blackout notices to (mostly) everyone. Due to a census snafu, a terminated participant was not included in the notice distribution. Now he is calling the broker saying no one told him his money was moving. The broker is yelling at us saying we are in violation of ERISA. (BTW, we provide 3(16) Administration) What is the remedy besides sending out the notice and typing up a mea culpa? The violation isn't self-reporting is it? Do you think we are not he hook for $131/day?