Madison71

A participant directed plan has a core fund line-up and a brokerage window. There are times where certain funds invested in by the participants in the brokerage window are liquidated/merged and their money in those funds are moved to a replacement fund. I understand that brokerage windows are not DIAs and therefore do not have the same notice requirements. However, a description of the window needs to be provided in an annual 404(a)(5) notice. Is there a requirement to disclose to participants in the brokerage window prior to the replacement similar to what is required of other replacement funds in the core line-up? Thank you!

I think ERISA 101(c) with 5500 instructions is sufficient?

I certainly think that presents a strong answer to that amended complaint

Its been awhile since I reviewed this issue and I'm not sure if I understand the question. You're correct that you can no longer make additional contributions to your HSA once you are enrolled in Medicare. However, our enrollment in Medicare doesn't disqualify her from contributing to her own HSA as on long as she is HSA eligible.

Thanks for trying Tom - I understand the IRS concern, but it is just not sticking in my brain. I thought basic match was subject to 6%? Discretionary is subject to 4% of total comp? What about if that is the only match you offer in the plan? No limit there, correct?

My initial thought is there is no issue here. Budgeting tools are often on recordkeeper websites. But, then I remember there was a recent amended complaint (Vanderbilt I believe where TIAA-CREF is the recordkeeper) claiming that Vanderbilt allowed TIAA to use its access to participant data to selling insurance and products outside the plan? The claim alleged that this was improper and that Vanderbilt violated the exclusive benefit rule. Similar parallels here? We shall see what comes of that.

Ok - I can't get what should be a simple concept embedded in my brain. I get the concept....I think. Not sure why there is this limit as the higher percentages of compensation would benefit the NHCEs. There is the 6% rule on match - is this both fixed formula - whether safe harbor match or not? Discretionary match has no such rule, correct?

Thanks Tom

Very helpful. Thank you both. I never considered that a top-heavy minimum may be required through the end of the plan year if terminated prior to, but assets are not distributed within a reasonable period of time. You often have those stragglers that push the date out. You may have already paid out most participants within that 12 month period, but you may have to pay out an additional amount (plus earnings) to all affected participants. Based on yesterday's discussion and this is all the more reason to get the assets out of the plan as soon as possible upon plan termination! Thanks again.

So are you saying the reason you can't put the toothpaste back in the tube is that it's too messy or because it's dried up because the cap was left off for too long?

That's a good question and one that I am not 100% sure on. I know some plan studies are considered settlor expenses that cannot be paid out of the plan. I think in this case there is a fiduciary decision to do a benchmarking study to ensure plan expenses are in-line which is a benefit to the plan and participants. I think as long as the fees are reasonable that they could be charged to the plan if the plan allows.

I think you may be able to reinstate (I would say unfreeze the plan). One of the requirements of a plan termination is that the plan must distribute all assets within a reasonable time. I believe a reasonable time is within 12 months. There were still assets a couple years later. I think you could make an argument that the plan is now frozen instead of terminated. The Forms 5500 have continued to be filed which is good. Often, you'll see where the Forms 5500 have not been filed with one remaining participant hanging on over a couple of years. I'm not sure if just a resolution to terminate was adopted or both a resolution and amendment. You may want to address that.

You’re welcome. Any distributions including corrective actions on a non-governmental 457(b) plan is reported in the W-2. There is no reporting on the 1099 for these plans. Have a nice day

1099 coded as taxable in the year of the excess deferral for a governmental 457(b). A new W-2 is not required. W-2 is required for a distribution on a tax-exempt 457(b).

No - what happened in the prior year happened whether later corrected or not.

CEW - my understanding is you are not required to provide a memo to the trustee. The memo was from Padilla at the IRS. The email you are providing to the trustee with the report (as long as it shows the amounts allocated to each group) is sufficient.

My recollection is it’s one of the the few times where it is possible to self correct by retroactively amending without filing VCP.

Assuming by taking second distribution that the first request was not an installment or annuity? If a new request for an additional amount then requires new spousal consent

I respectfully am not sure what the question is. I see there is a question in bold, but it appears you proceed to then answer it or maybe you are providing options a and b? I think you treat the participant like you do any terminated employee. I understand the facts to be that he was still employed while on military duty with an outstanding loan. His loan payments were appropriately suspended at that time (interest should have continued to accrue not to exceed 6%) and then he subsequently terminated. I’m not sure if he has returned from active duty and then terminated or why he was terminated. However, if truly terminated then have to following the loan program for terminated employees .

Great point on children

No - she would have to be an employee of husband’s company to contribute to husband’s plan. There is also an exception to treating as part of a controlled group if spouses own two unrelated companies where neither one has any involvement in the other.

I have not read anything new lately but I know it is one of the 5 goals laid out by DOL and my guess it will happen especially with the increased focus on all medical plans in recent years

Yes - if required to send COBRA notice, vision only part of covered health

I think a maybe safe harbor would give you some flexibility. I would think partner would have a good idea whether he was going to contribute prior to year end each year even if not certain as to amount.

Remember the GUST restatements on DC plans from 2000 that you could restate back to 1997 or the beginning of current plan year? Confusing. I do the same as Cusefan