Madison71

...the fun circular calculation to get to the correct SE comp.

These are great - I particularly love the following: When I was a boy I was told that anybody could become President; I'm beginning to believe it. ~Clarence Darrow

That's a great question. I would think that it would not apply unless the plan administrator selects the physician(s) that make the determination. What do you think? The plans I have dealt with that require a licensed physician - it is any licensed physician and it also provides that if SSA has made a determination to disability that the administrator can rely on that.

I apologize - misread the question.....it helps to read closely...even more so at night...

What is the definition of Plan Compensation? It often is W-2 compensation (box-1) with an add-back for deferrals (including catch-up), etc. I'm not following a maximum employer contribution of $30,400 if you have $36,400 in compensation (assuming adding back in deferrals to the definition of plan compensation). Of course, the maximum is also subject to 25% deductibility...also, the HCE must be a greater than 5% owner at that compensation (assuming similar compensation each year).

Technically, it would be applicable (and any ERISA covered plan) if a determination of disability is needed to make a claim on benefits. If the definition of disability is defined as under the SSA or the employer's LTD Plan, then it is not subject to the rule. I can't think why a determination of disability would included in an FSA Plan, but I would review it to be sure

Tom - that is about as on point as you can get. Thank you for weighing-in.

You're welcome. Do you have any local ASPPA chapters in your area or WEB chapters (World Wide Employee Benefits) in your area? I know those chapters have benefits type boot camp webinars or ERISA basics. I believe Corbel sponsors some good introductory benefits courses as well. Sorry - I do not have specific links

I believe on a loan offset that the age 55 rule could apply upon separation from service if no default while actively employed (which I know this is not the case since the individual is still actively employed). At the time of the original post, I was unsure whether the default occurred because of failure to repay while actively employed or after separation from service.

I think having the CFA and AIF with confidence in markets and investments will go along way working as a 3(38) Investment Manager. You need to rely on your TPA partners and other compliance professionals to assist you in your time getting up to speed. They should be assisting in coming up with suggested plan designs and then you can discuss the how's and why's of their suggestions. I would be worrying less about the next designation...CPFA or QKA and more speaking to others more experienced in the area, going to seminars and READING. I think Sal Tripodi's ERISA Outline Books are a good place to start. The Pension Answers Books are also a great place to go. I would go to introductory seminars in ERISA - held at local ASPPA or WEB. Also, constantly refer back to the IRS/ERISA Code and regulations when cited to see what it actually says. I believe QKA requires two years in the area before you can start working on your designation. I think there is some logic to the wait and in the interim, you can get start doing some of the things recommended above. Just some things to consider...

Lots of issues going on here. The plan sponsor is wrong in providing incorrect information to the participant that the loan was paid off and never restated payments. The record keeper is also wrong in not treating the loan as a deemed distribution in the prior year once defaulted and not restated within the cure period. A 1099-R cannot be issued in this case in the current year unless requested by the IRS under VCP. I think this is one that should have been corrected under VCP either requesting re-amortization of the loan or request reporting in the current year.

A participant cannot open up SIMPLE IRA without plan administrator/sponsor approval? I thought the plan administrator needed to not only establish the plan with the IRS Form 5304 or equivalent, but also sign off on the individual participant account forms. I don't believe you have a valid plan unless these occurred.

I believe this may be one where you can self correct by retroactively amending to allow for two loans. EPCRS has very limited SCP correction availability for loans, but I believe this may be one of them.

I believe this would be a controlled group aggregated for testing purposes. There is a possible transition period that may be applied on recent acquisitions - last day of the plan year following the transaction.

I believe that that if a buyer purchases 100% of seller's stock that employees haven't severed employment upon the sale. Therefore, I believe recognition of all service prior to the sale is required (subject to certain plan provisions of recognizing prior service for vesting, etc. prior to the establishment of the plan). I do not believe the termination of the plan prior to the acquisition date is relevant to recognition of prior service in this case.

I do not believe there is any requirement to let the non-deferring staff know that a discretionary match is being made to the plan. The annual safe harbor notice, SPD, etc. would include language stating there is a discretionary match provision and I think that is enough.

So, the participant failed to make the agreed upon plan loan payments within the allowable cure period and on 3/31 this resulted in a loan default triggering a taxable deemed distribution on that date (or offset if separated from service)? If so, then in my opinion the 10-percent additional tax on early distributions applies unless it meets another exception under 72(t) (separation of service after attainment of age 55, etc.). The exception for age 59-1/2 are distributions which are made on or after the date on which the employee attains age 59-1/2. If I understand correctly, the deemed distribution occurred on 3/31 which was over three months before turning 59-1/2. The timing of the issuance of the Form 1099-R is not relevant.

Thank you. I was thinking more that because the employer sold the company to an unrelated employer in an asset sale that there was a separation of service upon the sale even if the employee continues to work for new employer doing the same job. Since it was not a stock sale and the plan remained with the seller that this triggered an RMD. The later termination of the plan does not change the fact that there was a separation from service. I know the same desk rule was relaxed during EGTRRA permitting distributions upon the sale of a business to an unrelated employer if certain rules were satisfied. I will add that I am not remotely confident in this answer....it was just my original line of thinking when you raised the question.

Do you know if it was an asset or stock sale? Did the current owner assume liability for the plan? If the plan is actually terminated and all assets paid out, then I believe you first need to pay out any required RMDs as those assets are not permitted to be rolled over. The plan document language regarding delay of RMDs for non-owners is for existing Plans without a distributable event.

This could self-corrected under EPCRS assuming processes and procedures are already in place and being followed. You would want to look at the difference between what he should have received had the money been invested as directed and the default money market amount. Any investment gains would need to be deposited into his account. If there happen to be losses instead, then nothing needs to be done. You would also want to communicate this with the participant and of course put them into the funds actually selected.

The one mentioned in the link below...that is affiliated with CEBS is good. Starting one on the QKA designation with ASPPA is a good one as well. There are also local WEB or ASPPA chapters that sponsor benefit basic type sessions. Corbel also has beginner administrator seminars, I believe.

Thank you - to close out though, the assets have to be transferred, correct? It appears from the reading that you can also utilize as a participant locator without transfer?

I understand from reading the new final rule from the PBGC regarding missing participants, that a terminating DC plan can utilize the program as well. I am just confirming that if the program is utilized that once the assets of the missing participants is transferred to the PBGC (and all other assets are distributed out), that a final Form 5500 can be filed? Thanks!

Thank you so much for this information - I recently read they changed the fees...but it was being sold as a reduction in most cases in what I read. I hadn't had an opportunity to review the Rev. Proc. yet. Does this mean that the recent reduction in loan corrections under VCP where the only issue is loans ...e.g., fewer than 25% of affected participants...13 or fewer - $300, etc., is no longer in effect?

Happy New Year - A couple questions related to the prior 60 day rollover period and the extended rollover periods for plan loan offsets effective for tax years after 12/31/17. By way of example, lets say the loan procedures provide that a loan is due and payable in full within 90 days of termination of employment or it is offset. Participant under age 59-1/2 terminates 1/2/2018 with an outstanding loan that is not in default. Loan is not repaid in full by 4/2/2018 and the participant has left their money in the Plan. The loan is technically supposed to be offset on 4/2/2018. However, TPA/record keeper does not offset the loan in their system until the end of 2018 and a 1099-R is issued to the participant in late January 2019. Under the prior 60 day rule, when should the participant have "rolled over" the loan offset by making a contribution to an IRA or another employer plan to avoid adverse tax consequences? Is it within 60 days of 4/2/2018, 60 days from the end of 2018 when the TPA offset in their system or 60 days from receipt of the 1099-R? I assume it is within 60 days of 4/2/2018 unless participant wants to submit a PLR requesting extension of time until receipt of 1099-R because they were unaware that loan was offset...one of the benefits of having this new extended period. Under the new rules, participant would have until the due date of their tax return (4/15/19), plus extensions, correct? Thank you!