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Client has provided employees with bonuses at year-end for many years. While the plan document states that W2 compensation is eligible plan compensation, the client did not withhold employee deferrals from the bonus pays as they would with any normal payroll. Instead, because employee feedback was that most employees did not want employee deferrals withheld, the client began communicating that employee deferrals would not be withheld unless the employee completed an election form specific to the bonus pay. Each year, only about 3% of employees completed the election form. Would a QNEC be required for employees that did not have employee deferrals withheld from the bonus pay? To your knowledge, how far back would the corrections need to go? Thank you.

Our 403(b) plan allows for loans (any time) and in-service withdrawals at age 59 1/2. A participant that is age 62 was told by our retirement admin company that they could stop paying on their loan and have the outstanding balance (essentially) converted into an in-service withdrawal. The payments were stopped and then the retirement admin company changed their stance and said that she could not stop the repayments. I know attainment of age 59 1/2 is a distributable event, but is this an allowable reason to just stop loan repayments and deem the outstanding balance as an in-service withdrawal as they originally stated? Thank you.

We have a non-governmental 457(b). What if our 457(b) Plan Document is silent in regard to permitting transfers to another tax-exempt entity? Would they still be allowed or does the document need to specify this? Thank you.

Yes, unfortunately, most payments were Straight Life Annuity payments and they were made prior to the retiree passing away. So it would be due to an Estate. Thank you.

Thanks in advance for your thoughts. Our pension plan custodian provides a quarterly outstanding check list to us to keep our plan clean. We were notified by the custodian with the past report that they realized that over the years they switched computer systems and the outstanding checks on the prior computer system were never reported to us. Reviewing this current report, there are outstanding checks that are anywhere from 6 years old to 13 years old. Many of these are outstanding monthly annuity amounts. To further complicate the issue, many of the payees are now deceased. Obviously, we will attempt to contact the payee's family if we can locate the individual that originally called to report their death so that the payment can be made to the Estate. Our main concern is from a fiduciary standpoint. Does interest need to be paid on these outstanding amounts? Are we liable for anything since the checks sat for so long with no attempts to locate the payee? Thanks again for your thoughts.

Hi. Our plan document says that we provide our employer match and non-elective contributions on a per payroll basis, BUT, we do not match our employee catch-up contributions until year-end. (our system allows for employees to have two separate employee contributions withheld on a payroll basis- regular employee deferrals and catch-up deferrals). We obviously do a true-up contribution at year-end to make sure that everyone received the appropriate match and non-elective contributions, but how would we do the true-up contribution if we changed our match formula mid-year? (for example, the current matching formula is 50% up to 6% of compensation and lets say it was to be changed during the year to 50% up to 4%) Would we do two separate true-ups based on the two different formulas in effect during the two portions of the year? Thank you!

After slowly reading over the employer contribution sections again I realized that I did a poor job of explaining it. The employer match and the non-elective contributions are on a per payroll basis, but, catch-up deferrals are not matched until year-end. The catch-up deferrals and any other eligible employee contributions for which employer match was not provided during the year are trued up at year-end. Hopefully this makes a little more sense. Since the plan does a true-up at year-end, if the Plan suspends the employer contributions mid-year, should the document address how the true-up would then be handled, or is this an administrative issue? (meaning does the document need to say that if employer contributions are suspended mid-year, then the True-up will be based on the compensation/employee deferrals through the date the employer contributions were suspended? Thanks again!

Background: The Plan Document allows for a discretionary employer match and discretionary non-elective contribution, both on a per pay period basis, and it also says that a true-up will be done at year-end Questions: 1. Would the document need to be amended if the company decides to suspend the employer contributions mid-year? I seems like that falls under the discretionary piece. 2. If the plan dues a true-up at year-end and suspends the employer contributions mid-year, should the document address how the true-up would then be handled, or is this an administrative issue? 3. How would the true-up be calculated if the contributions were stopped mid-year. Thanks for any information you may be able to offer!

When a participant passes away and has an outstanding loan balance in the plan, what should happen to the loan? Would it be defaulted and taxable to the estate?