hr for me

There's always going to be some lag time between eligibility date and the first paycheck where money is deferred. Personally I would expect the employee to be able to fill out a form/sign up online at the 1 month eligibility date and it would hit the next payroll processing cycle dependent on how long it takes the input/feed to get to payroll and what timelags exist in that process. It's going to be different for every employee since every employee's eligibility date will be different under the 1 month of service definition rather than something like the first of the month after 1 month of service or something that limits a bit more. Payroll may be telling them that based upon that processing cycle. That's often not something the payroll dept can control (direct deposit timelines for example add 2-3 days) How quickly do other deferral changes take effect? To me, they should flow the same way.

Agree with the others. I don't think where the payments are funded from is your largest problem, but if the plan is already having admin problems with loans, this isn't going to solve any of those issues (and possibly make it worse since you don't have the automatic wages to pull from) I do monthly auto-billing for two of our companies where the payment is less than $50 a month (I wear a lot of different hats) and will tell you that payments attached to either CC/debit cards or Electronic Fund Transfers (EFTs) decline/reject for at least 10% of the payments that we initiate/request. Sometimes it is just a closed/changed account. Sometimes there truly is not enough money and many times different banks have different timing on what goes in or comes out first. I am not sure that the admin time to deal with a 10% failure is worth it when you have an immediate draw from a payroll check and might be more than you are currently experiencing with "too many loans..constant battle keeping them straight". You might be jumping from one bad place to another. Definitely explore the number of declines and the process for dealing with them. It's not fun to them try to collect, and we dont' have a law like ERISA and taxable consequences to deal with!

I am curious as to other viewpoints also. Personally I would be unfront with it along with the explanation and how/when you expect to correct it. Because it is my understanding that it is a lot worse if they point it out in audit (you don't think get to correct the easier/less expensive way). We got a letter years ago about a wrong plan number from the IRS and realized a very old plan (under a prior HR admin) never had the last 5500s filed (due to one small balance being left in the plan). I was able to file and pay a lot less than had the DOL found it in an audit. But it's been a while and I haven't kept my knowledge current on late 5500 filings. Hopefully you haven't missed that time window.

I'd be speaking with the client (unless he IS the client) and letting them know the issues he is causing. This is unacceptable! Even with balance forward, it shouldn't take 9 months to get you data/earnings that should be coming much sooner. Even when we did annual balance forward back in the day, we still got monthly trust/earnings statements and contribution/loan payments so we had an idea on transactions/balances throughout the year and could have calculated earnings midyear for a distribution if need be -- some plans did distributions quarterly even though they only did valuations annually. But then again, we also did all the trust to plan reconciliations for our clients. I don't ever remember a client where an accountant was involved honestly in any of the balance forward plans we did.

I'll go out on a limb...anyone that chooses a payroll company to administer their benefits and do nondiscrimination testing deserves whatever problems they get in the future. ADP has not been a favorite since back in the early 90s.....when I was the one of the benefits admin/consultant side of many client's ADP payroll processes. At that time they couldn't even put out good deferral data. They weren't testing or administrating at the time. It always surprised me when I heard they moved into the admin space.

In the end though, I am a strong proponent that the employer should also have the records (we used to give printed quarterly reports and a copy of participant statements to every client for them to have a copy). I think in the world of daily online that recordkeepers may not be doing their due diligence thinking that their systems will always be available. I will say this...back around 2009, I had to go back to a very old recordkeeper (Shout out to Great West) due to the fact that some 5500s were never filed by our internal administrator and they were still able to pull up information on their system on us, even though we hadn't been a client for literally years. They asked for no fee to do so. So I do agree the old firm/recordkeeper should have something (however systems change and not all backup gets moved into the new system and at some point the old system goes away along with the information it held). But you truly aren't asking back that far. 5 years and they don't have it? We had a minimum standard of 7 years! (And you never know how much this specific employer pissed them off or even things like unpaid final fees by the employer might get the response you are getting)

I didn't compound interest, I just used a simple interest calculation since you can't really know the interest during any time period within those years unless you get quarterly or annual number... That was 8.8% over the whole time period not 8.8% per year. The % would be much less than 8.8% per year.... And I do agree with ESOPGuy that in my past, the recordkeeper always did the calculations because they had access to all those numbers I was asking about. But it sounds like the new recordkeeper doesn't have them and the old recordkeeper is being a pain. They should have some reasonable way of calculating the earnings owed. But sometimes they do charge the cost of the calculation time back to the participant and the AP and that's why I said it might be better to come up with a reasonable estimate that you and the participant could agree to without having to dive too deep into research and calculations that will eat up some or all of those earnings! I remember back in the quarterly valuation days having to go back decades for some QDROs and my mentor was one who did most of the 401k QDRO calculations and often had me review the thought behind them. And that was back in the day when we could pull numbers at different times (mostly quarterly)..... And often there was a starting balance before marriage and then during and then a balance after....not easy at all!

Current balance - his contributions - his loan repayments- 9/11 balance (ignored loan balances because you said that was included in the $64k number). So that got me to $13527.08.... as the total amount of earnings over the time period. you can't use that against the 9/11 balance because of compounded earnings, loan repayments and contributions. So I took that over the current balance to get 8.8% of the current balance was earnings over that time period taking into account all new contributions and all new loan payments. Probably not a great assumption, but the best I could do easily with the information you gave. Others here might have a better way of approximating....8.8% time your $25987 is a little more than $2k. And you really shouldn't be getting the portion of earnings that deals with his contributions and loan repayments....So that's why it is more of a maximum.... You could try to argue some standard earnings rate such as the chagne in the Dow Jones Industrial Average which would give you a 55% return over that same time period or $14832 in earnings, but you can see that's less than his account balance actually made in earnings. Unfortunately, your money was invested with his choices until they actually split the account balance out and probably included some fund fees, etc. So he could have invested better/worse than the market and you get the results of that. But if you decide to go the way of some standard earnings rate, you will be in for a larger fight....

No I don't see a discrimination issue (unless you take into account some outliers like FMLA leaves), but do see a processing timing issue. For example, we pay biweekly on every other Friday. To have anything posted to that check, payroll needs the information NO later than the previous Friday to input it prior to payroll running on the Monday of the paycheck week. Each company/payroll is going to have a set schedule that they run payroll on. Some may be more flexible/quicker, but generally they also have to deal with a few days for direct deposit timing/mailing paychecks, transferring data out, etc. So, in a worst case example, if someone were to request a loan on Tuesday October 25th and payroll was run on Monday October 24th to be paid the 28th (today), they would have to wait until the paycheck dated November 11th to have the deduction come out (assuming the request made it through that transfer process either automatically from online loan request or by paper/entered by hand), then processed on the 11th's payroll and then a day or two (or more) to forward it to the TPA for the TPA to then process the transaction through its system and check to see it was paid prior to processing the loan. I doubt theTPA can see payroll reports and can look at them prior to actual payday (but after payroll processing). We never got information back in the day until the client sent all data via floppy disk/online data transfer/upload (which might mean extra programming on that side for payroll to be able to send that back to them electronically). Unless the employer is going to assume the deduction will happen correctly and not wait on payroll but just put it through on the next check. But that gets into a small risk of it not getting paid by the participant. Yes $75 is a pretty small amount that should go through, but what happens if it doesn't? What happens if that person is on unpaid leave and never returns and never gets another check? Are you going to deny a loan because someone is on FMLA? You can't unless you deny loans for everyone on every type of leave or you would be discriminating illegally for the employee taking FMLA. Who is going to eat the $75 fee? Or does the loan just not happen? Does the TPA wait to get the $75 before ever doing anything? It just seems so much simpler to leave out payroll-- I just see so many pitfalls -- they have other choices -- either have the employee pay it directly OR take it out of loan funds. Both of which would cause NO extra processing time and have a lot less pitfalls and a lot less programming/process changing to do.

I am going to take a shot at it, but realize without seeing all the documentation, it is hard to give an accurate answer. And I am not exactly sure what your difference is between the loan balance and "deemed loan balance" at 9/8/11. Did they assign some of that to you as the AP such that some of the repayments over time came back to your part of the balance? If so, you might also have some partial loan repayments to add to your total, not just earnings. Since he was earning interest on his part of the 9/8/11 balance PLUS his repaid loan payments and new contributions during that same time period, it is going to be difficult unless you can get some quarterly/annual balances and do the calculation for each period. Because as time goes on more of the earnings belong to him than to you (your $26k gets to be a smaller percentage of his account for each contribution/loan repayment that he makes). That will take time and probably more money than you want to spend to gather the information and have it calculated by a professional (can run into the hundreds of $s if not more depending on how complicated it gets which might eat up any earnings that you would be entitled to). I would try to ask for a reasonable approximation and err on his side personally. I am showing total earnings for the period around $13K, which is a little less than 9% of his current balance. Personally i would argue somewhere around $2k (or less) is reasonable if you don't want to go through the whole process (and it might be hard if no one kept the quarterly participant statements/snapshot information at different points to be able to do the same calculation over smaller periods of time to add them up). Did the new recordkeeper get any historical information from the prior? Does the employer themselves have any historical information? It's going to be tough if those answers are NO.

Not directly the question that you asked, but the participant (in most states) would need to sign a payroll authorization for the deduction and then you would need to give payroll time to process. Doing it this way could add on 2-3 weeks of processing time to get the loan depending on when the next payroll is run and if you wait to make sure the deduction happens and that the money is transferred to the TPA. What happens if you have an employee on unpaid leave who requests a loan where the fee can't go through payroll? Who is going to check that the participants wages are high enough to pay the loan fee? What happens if their child support, health insurance and 401k deferrals eat up all their net income, etc? Someone is goign to have to verify that or wait for it to be verified during the payroll processing. And you would be surprised who doesn't have the net income to have it subtracted. I can tell you that payroll probably won't be happy about adding the deduction (programming, accounting, etc). Honestly I prefer the method where the fee is added to the whole loan and then the employee gets a check for the net, so that it stays out of the payroll process altogether (but I am a strange duck who does both HR/Benefits and payroll and has been more involved in there interaction over the years and sees those payroll processing issues more than most benefits professionals, so I tend to want to bring them to the forefront early) Or the method where they write a personal check. Why bring payroll into the process?

Does your loan setup allow for extra/larger payments? Does it state that in his loan documents? If so, I am with Lou S. However if the payments are specifically defined as $x amount and the only way to make an extra payment is to pay the whole loan off, you might have a different scenario. So I go back to what do the loan/plan documents state on paying extra? (and just as an aside and no clue as to whether this is legally doable -- could the current loan payment amount be lowered until he catches back up to his original amortization schedule? i.e. paying himself back the difference for a while? Would he be defaulting since his loan was paid ahead? He'd still have to make some type of payment though to keep the loan active... but who knows what exactly that would do to the total interest....)

Is the participant taking any kind of distribution to help fund the mortgage? I remember years ago (like 20) I had to prove where a larger sum of money came from (hardship distribution) because underwriters don't like unknown sums of money just showing up. But all I had to do was provide the distribution paperwork, not a plan document!

Good thoughts and prayers from one who used to live on the TX Gulf Coast and have lived through at least 3 hurricanes and multiple tropical storms. Lost our roof in the last one....I was happy when we moved to NC (inland near Charlotte), but now these hurricanes seem to be on the East Coast side..... Wouldn't wish one on my worst enemy honestly.....it sucks!

Agree with Bird -- Definitely seek out HR/Benefits before calling the DOL (that's a bit of a nuclear option at this point). Don't rely on the payroll department to give you a benefits answer. While payroll should know the plan features, it is very possible there was a miscommunication when Roth deferrals were set up and no one caught that match isn't being calculated. Hopefully once you speak to HR/Benefits about it, you can get it fixed.

I wouldn't want to be the one making tax decisions and consequences based solely on an employees wages. You never know what their 1040 income looks like in other earnings/spouse's earnings etc. I think it is a flawed reasoning personally to guess that they generally don't pay any federal income tax. To me, this is too close to giving tax advice. But I don't tend to like auto-enroll although I've done enough non-discrimination testing in my lifetime to understand the purpose.

I am sorry about the situation, but grateful for the giggle...it's been a tough few weeks and just imagining "can I haz 401k?" cat meme gives me a giggle. I am truly grateful! (and do think this should count as weirdest of 2016 so far!)

Some states have marriage and divorce records online. Do you know what state they were divorced in? Or a county would even be better..... Contact them and they should be able to provide the date of divorce.

EFTPS is what we use in the payroll world to remit taxes but I don't have knowledge on whether withholding on distributions could be processed through there. (I am not seeing a tax type that jumps out at me that would work)...You generally need an EIN/SSN setup on there along with the tax report type to credit the withholding to. I would think you could use the employers EIN and remit...but then it gets too deep for me to think how the employer would report it correctly back to the employee's taxes at the end of the year.

It would take a crystal ball to know if it is better for him to take a distribution and do a rollover or to leave in the ESOP. Like GMK says, it depends on his risk tolerance and how risky the ESOP stock is. If you aren't a financial advisor knowledgeable about his goals and risk tolerance, I would suggest that he speak with one. What I would make sure of is that he knows any distribution restrictions for the Rollover money once it is in the plan (if there are any)

Not a subject matter expert either but researching and brainstorming and my immediate thought is team "no"...I found this http://www.conexismarketing.com/employees/faq-library/health-reimbursement-arrangements-faqs " An HRA balance cannot be cashed out, rolled over into another plan, or used for any purpose other than reimbursement of eligible medical expenses" so it sounds like it can only rollover within the HRA plan year to year. But I don't know this company or have any other backup on it. And you can't distribute it unless it is for qualified expenses and if you are moving it to an FSA, there aren't any qualified expenses yet. You might also go to IRS Publication 969 and read their links to notices under the HRS distribution section. I didn't want to delve that deep, but their basic statement is that any distributions must go to paying medical expenses directly (at usage time). Those might give backup to the link above. So I am leaning toward team "no".

Your issue (and many others) are why I always discourage everyone I know from taking loans out of the 401k plan. It's just not a regular loan although people want to think of it that way and want it to work the same way. I've seen way too many different (and bad) issues to ever recommend it but YMMV.

I'd agree you need to go back to the original loan documents and see if that extra payment was stated in there or whether it was just a function of what the recordkeeper could do. That will be your answer (but do agree that ADP does it ADP's way and none other...I didn't like working with them as just a payroll provider passing information to us as the recordkeeper years ago and laughed hard when I heard they were getting into the Benefits business) I know plenty of plans that don't allow any payments outside of payroll deductions at all except for the final payoff. And many that don't allow the amount/time period to be changeable (hard coded in payroll and on the recordkeeping system to accept a payment of $x every z days). That was generally because a specific amortization table was used (not that interest was calculated based on the balance each period). We used to have to re-finance/re-amortize the loan each time a non-scheduled payment came through. Now daily plans might have a better way of doing this, but we didn't and I haven't seen too many that do. I would try to find the $10k somewhere else and get it fully paid off honestly.

Step back and look at the overall totals versus individual....What is the net change of refunds? I was able to argue successfully (albeit years ago) that the difference was de minimus overall and didn't have to re-do refunds since in effect the refunds to the group of HCEs were enough to make the plan nondiscriminatory. Not sure that would work now. We did have to file under a correction program. In essence we were just going to be moving around who got the refunds rather than not enough refunds overall. And it was our (the TPA/recordkeeper's mistake) so we ate the full cost of the re-testing and the IRS filing. We had a very inexperienced young employee doing the test and the person who checked him was much further up the corporate ladder and hadn't done a nondiscrim test in decades. It was a mess. I got to be the one to clean it up. While challenging, I wouldn't recommend it!

Is the trustee in the land development business? I think the only way the plan could do so is if they holdback specific parcels that the plan still owns (hoping that value increases even more with the development). They would have a share in the HOA at that point as a property/lot owner (I am on an HOA board for our 'hood and honestly there is no way in the hot dark place that I would think this was a good idea!) HOA's (at least in our state) want to be non-profits so there is not a growing investment that gets a good return if you don't own any of the RE anymore, but rather payouts from the lot owners back to the common fund for capital improvements/expenses/upgrades/etc. And even then, as with all real estate, you hope what you held on to will be worth something/more after the rest is built out. You'd probably be better off selling the whole piece to a developer who knows the legalities of setting up a neighborhood/HOA/development/subdivision. Yes, you will get less per acre but do you really want the PS plan on the hook for the liabilities of property development (which can be large)? Again, I wouldn't! I truly doubt you are going to find an attorney that is well versed in both RE/HOA laws AND Profit Sharing regulations. I'd be researching HOA laws very tightly to see if there is any real payoff later.