Madison71

You never made loan repayments, but it wasn’t in default prior to termination, correct? The other loan from the new 401(k) plan needs to be repaid, so I’m not sure there is an issue. Maybe it’s the late hour and I’m missing something. I would make sure the Form 1099-R has a Code M - qualified loan offset the ensure extra time to put the $25,000 into an IRA to avoid becoming a taxable distribution.

Thank you for the insight. I do work in that space as well. I definitely plan on taking the courses. I prefer to complete the CPC first just to knock that out. Can anyone speak to time it took you to complete CPC...assuming diligent study. If over 1 year, then I may start with the TGPC first. Thanks again.

Thanks RBG! I felt a when I was studying for the second test of QPA that I was wasting a lot of time learning DB calculations, etc. which has nothing to do with my job. Was attempting to avoid this in the next round. How long did it take you to complete the CPC? Thanks again.

I am contemplating whether to first get the TGPC designation or work towards my CPC designation (I have completed the pre-requisites). I see there is a governmental and tax-exempt module in CPC, but not sure how comprehensive it is. I work on private, governmental and tax-exempt plans. I have more experience on the private sector side and would like to gain more expertise on the public sector side. I would rather begin the CPC and take the governmental module unless that module is not very comprehensive. Thoughts? Thank you!

Hi - there is likely a blackout notice. That may be a good place to start.

Not sure if it ever was as it’s with another provider. We would be taking over new plan and spin-off if that’s the direction.

Good Morning - Company A sponsors a 401(k) plan with a safe harbor match with a 12/31 plan year end. Company B is a participating employer. It is a calendar year plan. Company A and B were part of a controlled group until Company B was sold in a stock sale to unrelated parties in January 2019. New owners of Company B mistakenly thought they could continue to participate and remitted January deferrals into the plan. Those deferrals were returned by Company A essentially freezing them from participating in the plan and Company B returned to the employees providing notice that deferrals were not being accepted into the plan. Company B is now looking to establish its own safe harbor plan. There is the question of whether this should be started as a new 401(k) plan with a safe harbor match or a spin-off of an existing plan. If a new plan, I think there would be an issue of violation of the successor plan rules. If a spin-off, then you have the operational failure of the missed opportunity for deferrals and missed safe harbor contribution issue. I guess if spin-off, it is possible to use the safe harbor correction under EPCRS of 25% of missed deferrals and 100% of missed match, plus earnings if provide notice within 45 days of correct deferrals. I would appreciate hearing everyone's thoughts on this. Thanks!

My thought is if it was top-heavy, then compensation would need to be based on the entire year IF there is any additional employer contribution. Otherwise, you are fine as to date of entry and I can't think of any other disadvantage. Of course, SH match also doesn't count for gateway if you have new comparability, but you didn't ask that question.

I have used both Kravitz and Creative Benefit Strategies Inc (the later to a greater extent) and was pleased with the quality. I have also worked with others sprinkled in over the years. If you want more details/contacts for best pricing, etc., send me a private message. Best of Luck!

I know those that file on the accrual and those that file on the cash method for 5500s and both have their positives and negatives in my opinion. In this case, if file in cash, then no filing until funded which will be 2019 to avoid a possible elective deferral failure on the 401k. However, I like to file in this instance in 2018 reflecting the 11/18 effective date (assuming adoption is effective date).for PS and include 0 in assets.. I recommended holding until the actual corporate return is filed just in case they change their mind last minute and make a contribution for 2018 and want to reflect that decision on the SAR for 2018. I’ve seen this happen as well in the past.

My understanding is the anonymous fee is due at the time of submission and is no longer partially refunded. There is no reduction in fee even though the fee has been drastically reduced in larger cases.

I recall on a complete withdrawal that the actuary calculates the years of the partial withdrawal as well and then provides a credit for any prior partial withdrawal liability payments. I had a similar issue a number of years ago and I believe that is how it was done.

Justanotheradmin - I agree that written notice could be in the form of an email and does not need to be a hard copy mailed out. I do not believe it says specifically that it needs to be a single notice, but I do think that was the intent of the 45 day notice. I would not want to have to argue that several partial communications meet the requirements when a simple notice containing all in one would clearly meet the requirements. With that said, I will use that in the future if I ever have similar facts that backs me into that corner.

To take advantage of the safe harbor - less than 3 months, the correct deferral amount should have been corrected by the last day of the month following the month the sponsor was notified of the missed deferral. If supposed to start in December 18, but started in January 19, then that part is satisfied. I believe you should have still received written notice of the failure within 45 days of the start of the correct deferral to meet the requirements under the safe harbor (although the notice of the ability to increase future deferrals is not applicable since already at 100%). Otherwise, it is 50% QNEC of the missed deferral (plus earnings), plus any missed match (plus earnings).

Thanks Mike!

Good Morning - I am wondering what the correction is for a 401(k) plan that is inadvertently set-up with a 20 basis point annual asset charge for TPA fees paid out of the Plan when it should have been only 10 basis points. The error occurred over one year ago and was recently discovered by the TPA firm. Some of the participants who were overcharged were paid out of the plan already. My initial thought is to self-correct by reimbursing the participant accounts on a nondiscriminatory basis plus missed earnings. I appreciate the insights.

I would also say to check the Loan Procedures. Often, the Loan Procedures will allow early payoff in full, but not partial pre-payments. Potential operational failure.

Employer does not pay the overpayment to participant’s account (assuming the full or partial amount of the overpayment was not received back from the participant). It would be paid to the plan and used for future contributions, administrative expenses, etc.

Thanks Kevin C

Good Morning. Participant received an overpayment from his account. It was from his vested account, but it was an impermissible distribution due to his age. Attempts have been made to get the funds back from the participant, but he claims to not have the ability to repay. I understand from reading the appropriate sections of EPCRS that the Plan Sponsor or another person must contribute the amount back to the plan. I know in some cases, another person is a person acting on behalf of the Plan Sponsor. My question is - who is another person in this case? The TPA has offered to make the plan whole as they were the one that approved the distribution. Can the TPA cut a check to the Plan for the overpayment plus earnings? Is there ever an issue with the TPA or recordkeeper correcting an operational failure where the correction method is making the plan whole (assuming the TPA and/or recordkeeper clearly caused the error).

My initial thought is to refund directly to John Q so you can issue a 1099.

Great tips! Thank you very much.

Good Morning - This is a question for those who have or are working towards the CPC. I am curious how long it took you to attain this designation (or a module if still working towards it) once you received the QPA and began studying for CPC? I'm trying to plan ahead to see how long it will take. I plan on reviewing the modules and taking the exams at an average pace whatever that means. For example, on the QKA/QPA, I averaged about one chapter per week and with review about 3 months between each exam. From a quick review of CPC requirements, it looks like you have 4 required modules and 2 electives with online exams for each. You then have a proctored exam at the end. Thank you!

You’re welcome!

No issue. If related, but not an ASG or controlled group, then it would be a participating employer in a MEP. As I’m sure you are aware, there is a lot of activity in that space right now.