hr for me

Well it was being done back in 2005-2006 by this PEO. I don't know how they justified it to the DOL/IRS. I do know how it was sold to clients. Texas can be a strange state and its own monster, and that may be why this large PEO can use it and get business by doing it. I had other issues with the PEO and how they handled a 401k issue and it was just another reason that we pulled out. While they say they cover a lot of liability, per the DOL, the employer is usually at least co-responsible for most if not all of what the PEO does on their behalf. So it would not surprise me if they were "working around" the laws in place.

GBurns is correct- I read the message but didn't look at the forum it was posted in. I missed it was a health and welfare issue rather than 401k. But again I would suggest plan docs and the PEO agreement. I am still not sure this is a one size fits all answer. Several variations of the PEO model can and do exist. When we left the PEO, any ex-employees were still counted as their employees and our company started over as a new employer with the state of Texas as if we were brand new with no rating experience. Once we pulled out, all future terminated employees did fall back on us. And any employee who terminated while we were in contract with the PEO fell back to the PEO for unemployment and COBRA, 401k etc. When we pulled out, we were not forced to take terminated 401k balances for "our" employees. Our PEO was the plan sponsor of our health insurance plan. We were not forced to take anyone on COBRA onto our new health plan. And we had to set up brand new health and welfare insurance on our company. Now I was brought in to take the company out of the control of the PEO so I was only under it for about 4 1/2 months. But this was my remembrance. It may not work that way now, but it did back when we were under that specific PEO. eta: so I went back to the document that I have archived yes, the PEO is defined as the "plan sponsor" of the PEO Group Health Plan. It was possible. Again, may have changed since then, but that is why it is important to look at that specific client's documents.

Are you having to pay any type of account maintenance fees on the IRA? Sometimes 401k plan fees are paid by the employer. And there is the advantage of just having all your money in one place. We had 4 different accounts that in the end we have either rolled into the current 401k OR have in an IRA with the same large recordkeeper in an individual account. Some disadvantages are that you might lose investment options, there might be a distribution fee, etc. You should definitely check into what your distribution options would be out of a rollover account, etc. So there are pros and cons and only you and someone who is looking at your whole portfolio could really make that choice.

I think you are going to need to reference the co-employment relationship contract and the 401k plan document of BOTH employers (old and new) and see how they interact with the PEO. In some PEO relationships, the employee is actually also an employee of the PEO. When we were under a PEO, we were employees of that specific PEO and their name was on our plan, our paychecks, they were the employer of record for unemployment, etc. So I don't think there is a one size fits all answer to your question. A lot will depend on the relationship between the employer and PEO.

And even a paystub may not show coverage if the employee is not required to pay any part of the premium. And I still know quite a few employers that pay 100% of the employee-only which means nothing would be on a paystub. Most pay at least 50% of the premium. So would you reimburse only the employee portion? Or the whole premium? And generally the employer won't publish the cost of the full premium, except possibly through knowing the COBRA premiums they charge. And what happens when the cost of one employee spouse with the best plan ever is $1000 a month and another employee's spouse is terrible insurance at $400 a month. How do you make it equitable? I would find a way to reimburse a consistent amount back to your employee.

It's good business practice and most HR/benefits employees should know better than to share , but I have to wonder who had it and who shared it? Does the participant know how the third party got the information? That's where I would start. If it is an employee of the client, I would have the participant speak with that employee's boss and ask the reason why it was shared. If it was the recordkeeper who passed the information on to an affiliated service, then the participant should opt out of that service. But in the end, honestly, I don't know of any confidentiality laws for 401k's (unlike let's say ADA). But someone might have broken an employer or recordkeeper policy.

I can see all sorts of administrative pitfalls. What happens if/when (1) the spouse changes employers? (2)The amount of the premium/reimbursement changes (3) the employer refuses to let a 3rd party come into their employment/benefit relationship with the spouse (4) the spouse's employer's payroll can't handle a different deduction than everyone else, etc. (5) the spouse quits working and wants on your plan -- got to stop the reimbursement or risk overpayment This would need ALOT of oversight assuming other random employers even want to take the reimbursement. I agree with GBurns- go back to WHY you are doing this? And see if you can't deal directly with your employees. Possibly give a discount to those whose spouses are covered elsewhere? (if that is even legal under PPACA) I know that you can upcharge those whose spouses have access to other coverage but choose to be on your plan anyway.

Thanks GMK!!!! I didn't even know that toolbar was there! I usually just type within the white box an hit reply!

When I took my current position 11+ years ago, my predecessor had "terminated" an old 401k and just stopped doing 5500s as of the year of termination which was 3-4 years prior to my start date. Imagine my surprise 3 years in when I came to find that there was still a participant with a balance that had never been distributed. I had no contact information with the old recordkeeper (our corp offices had moved 2 times) and it was a nightmare of updating 5500s and paying large fines because she didn't know she had to continue doing 5500s until the balance was 0, regardless of the termination date. So I think this is actually a pretty common misunderstanding unless you have worked in the 401k business.

There is a handy dandy chart on this at: hsccpa.com/2015/01/2015/-employer-reporting-health-care-coverage-requirements/ I wish I could cut and paste but for some reason I can't on this site...... Hopefully I typed the link correctly

The ones I saw in the good old days were balance forward plans (not daily's) so I suspect the fact that the funds were very mingled probably had something to do with it. But even then, the loan interest went directly back to the employee who took the loan (wasn't shared with the whole plan or even a whole fund). I haven't seen any where the recordkeeper loaned money outside of the participants own funds. In that case, I can see where collateral is necessary to pay the loan back should they default. But I didn't work on any MIAA-TREF type accounts (LOL)

I know back in the day where I worked for a large recordkeeper, some clients wanted that policy and we had it for some. There is the misunderstanding that it is collateral, when it really isn't. But it's hard to make clients understand that. It sounds like this recordkeeper is doing what's easier to explain. However I have to ask what does the plan document say?

BG5150 has a point. Is the "corrected" box checked? Is this a W-2C? If so, this could be a duplicate/corrected on another W-2 that already existed and when you correct, you only put in the information that was wrong/corrected and don't put any other financial info on the W-2.

Based on K2retire's theory, can you tell if there were any large distributions near or at the end of the plan year? That could help explain why the discrepancy is so very large (up to 20% of assets) with the cash vs accrual, but that large of a discrepancy seems like would be hard to explain with just timing deposits.

Many many many years (prior to EPCRS), a coworker at a large HR consulting firm that shall not be named ran a test that failed with very very very bad data. To correct it, we re-ran the testing a few different ways and compared the results by person. And then chose the one that was least different from the incorrect one. And argued successfully to the DOL/IRS that the differences (both to different people AND different amounts) were small enough to overall be basically ignored. It took a lot of time/analysis and (my) wages. The HR consulting firm ate that cost which was very high, but it saved the client. Don't know if it would work today, but does sound like that is what Tom (above) is suggesting too.

Some religious entities are exempt from FICA and possibly some educational groups. For example in TX, teachers don't pay FICA, but do pay into another state retirement plan. Even then they would have to show that somewhere on the W-2 since it is taken pretax. I'd have to ask my sisters on how it shows on their W-2. Something is really wrong with your W-2s unless it is a very unusual exception. I would expect at least some employees to have some FIT withheld. Definitely go back to the client.

My husband's last employer charged a spousal surcharge if the spouse had coverage through their own employer and chose to be on the husband's plan. It was about $80 a month extra. So I have definitely experienced it personally. I was required to get a letter from my employer stating I was not eligible for coverage to not be charged the spousal surcharge. So charging it is legal and the $80 was enough to get the spouse to pick their own employer coverage especially if their employer covered 100% of employee coverage. Of course you have the administration of checking spouse's status (working and eligibility at a different employer). But the surcharged was charged until the employee/spouse proved otherwise each year. For $80/month most employees made sure they completed the paperwork quickly. It was part of the premium and paid pre-tax. I agree that the Cash Award in-lieu-of changed dramatically under PPACA so I would make sure you understand how that affects any cash award.

Do you know why the discrepancy exists? Other than the fact that the TPA made mistakes and did shady accounting? Is the client able to tell you why they signed off on a 5500 that didn't match their reports? Are you sure you shouldn't go back and amend the 5500s to be correct? I'd be more tempted to have the clients do so than to ignore it (#2) or do more shady accounting (#1). I'd be mostly like of your choices to do #3 of those 3, but would check into correcting over time. Or at least document what they should have been in case the IRS/DOL comes back and asks so that you have the information needed.

Are you saying that there were no taxes withheld? No FICA? Because a payroll report should link you back to the numbers that played into the W-2 calculation (any pretax deductions, etc) if you are questioning the actual W-2 numbers.

May be a bit simplistic, but why wouldn't the proceeds be considered earnings in 2014 when the participant died and the insurance was paid out rather than the years the premiums were paid? Was the value of the policy the same over the whole time period or were there any stipulations that it wouldn't be paid out until after a certain date? You might check this posting: 5500 : reporting life insurance premiums under Exec Comp 5500 on this board. It talks about where to put the insurance premiums on the 5500 each year and differing views. I can't seem to put a direct link though....

I'll throw in a different vote. I'd try to get some communication from the employer and do some investigation as to why the deposit wasn't made. Is it possible the data feed from payroll was duplicated etc? You might be looking at a mistake/correction rather than a deposit that didn't happen. If it was truly due, I would inform the employer on a consistent basis that amount was still due and the ramifications for not paying it on time. Probably about 1 time per quarter so that I could prove I had done all I could do and have a paper trail that absolves me of any repercussions of "you should have kept us informed of the situation". Is this a one time deposit that is missing or is it going forward? After a certain point, I would fire the client if they failed to deposit what was owed consistently.

I read the posting as trying to figure out what other kinds of fees they could be charging rather than a direct bill to the employer in question. The actual amount charged didn't really matter to the question. I guess we really didn't need to know the MassMutual company name either. I would have answered more specifically (fees taken out of earnings, revenue sharing, etc) without either of those two pieces of information. Honestly what's been posted isn't enough information to truly see any of the specific the pricing/expense structure by MassMutual for a specific client that MassMutual themselves haven't published out on the www. That's where I got the .pdf. I am not a client, never have been, just googled which anyone can do. Not sure that sharing that is any type of anti-trust violation of policies since it is public information and there are no specifics in that PDF. (And I don't go to Actuarial Conferences. I am not even a trustee on a 401k plan anymore. Nor do I do recordkeeping or administration anymore.)

Probably best business practices, but you might want to make sure what your default parameters in your payroll processing system are. I know ours defaults to restart whatever the last elections were and I would have to override them to stop them.

http://wwwrs.massmutual.com/rsstaticfiles/retire/firms/edwardjones/rs4950.pdf goes into pretty good depth about the different fees they have and how they are paid. How much is the employers passing through to the employees either directly or through fund management fees?

I agree that it is owed to the participants who were eligible and participating at the time that the earnings should have been received. However, I do have to wonder what formula you are going to use to give it back to them. What does the plan use the forfeiture account balance for? Because it seems like that solution would only give $s back to the current balance holders/employees. How many participants does it affect and what average amounts are you looking at per participant? What is the earliest distribution that would be owed a check? (how long ago do you have to go back?) If it's too long and the checks are very small, you might end up with quite a few stale/returned checks that you then have to deal with in a different way.