hr for me

We saw this coming way back in 2010 and changed the way we did benefits for our employees. But yes, it the end it did mean more taxable income to those that didn't pick up the employer insurance (due to spouse's coverage being better for some personal reason) or for small employers that don't offer it at all. In all my reading, I haven't found any good workarounds.

I have to agree that I would ask the purpose of the calculation before performing it. That said, this is a calculation I do at the beginning of each year (once we have benefits/elections completed) for every employee regardless of job duties (i.e not just HR/benefits people) so that our BOD/CEO can understand the full cost of each employee, especially in regards to consistency of overall pay/benefits. We also use it for insurance purposes when we have to charge back time for repairs/work done internally rather than third party. So I would say it is semi-common to track such things in some industries. That said, I agree with GMK in the question of whether the employer is trying to deduct employee work costs as plan expenses? If so, then yes, I would say this backup is needed to justify the expense as reasonable. Although I don't know of any employers that did so!

Has the plan sponsor been given notice of a possible QDRO that involves 401(k) assets? One concern would be that he is using community property funds that his almost-ex-spouse might have some rights to (depending on the state marital property laws and on what the divorce agreement is)... If he takes $30k and the QDRO requires him to split his 401k balance with the almost-ex-spouse will there be enough to do so? Or is he doing an end run around a possible QDRO? I don't disagree with your argument of preventing eviction, but would be concerned about processing any distribution in the midst of the divorce/QDRO situation.

Can I ask a question from the other perspective? Why would you not want to be bonded if you are accepting client funds that truly belong to carrier? I would think that any prudent client would be wanting you to be bonded if you have access to the $s between them and the carrier (i.e. goes into your general account). I would say if the money is going from the client to the TPA to the carrier for any reason, you are handling the funds and they could be stolen, etc. Do you have other insurance that would cover the loss?

Brainstorming -- I suspect the mismatch algorithm is different than that used for W2 purposes (or other purposes where it is checked such as FAFSA). I don't put a lot of trust in our government to do things the best or easiest way like picking one algorithm that already existed! I think another large part is dependents information is generally never checked by the employer as they are never paid, etc. They might possibly be checked by the insurance carrier, but I doubt it unless they find a duplicate to someone already on file. I've found with twins that it was more of a name/birthdate search off the main member than a SSN search of the actual dependent. And much of that information comes from hand or screen filled enrollment forms by the parent, some of whom might be misremembering all the kids' SS#s. I know at one point on the FAFSA entering my one DD's social I must have entered it wrong because it came back a few weeks later as a mismatch. So it is easy to do, especially on dependents. Or there could definitely be a flaw in the SSA data or in the actual algorithm itself. Who knows what database they got their info from, hopefully directly from SSA. I'd actually love to dig into the mismatches and try to figure out where they/we are wrong. I suspect this won't be solved in one cycle.

Name mismatches have been around a long time in payroll/W-2 circles. I am not sure that they are using the same algorithm for this mismatch, but it is well known in payroll circles that you want the name to exactly match what is on the SS cards/records. There is a $50 per mismatch penalty. Usually the way it is solved is payroll requires a copy of the SS card at time of hire. Our system however only keeps Middle Initial and that is all that is transmitted on the W-2. It would be a nightmare if they are requiring full middle names. Is there any way for you to do an internal audit of payroll/W2 name versus the name that you used for the 1095? Or are you pulling from the same name field and the algorithm is mismatching a whole lot of those? Do you know if when entered HR/payroll input the SS name? Otherwise, I don't see much choice than doing an internal audit and requiring employees to bring in a copy of their SS card to check against. Or just those that got the mismatch. The good thing is once you have good data, you shouldn't have another mismatch.

I would expect the investment company to use their E&O insurance coverage to make the rollover participant whole immediately including some earnings rate of return unless they can prove fault with the sponsor or participant. Then the investment company can decide how to proceed with the other plan sponsor (unless it is two different plans from the same plan sponsor?) on how to get the $s back from taking away any current balance and then trying to recover the rest of the loan money. Obviously it isn't more than $15k if the balance eat the time of the loan was $30k. Possibly investment company would pay back the E&O claim over time?

It's okay ETA...we all do that at some point or another

agree with Bill. We always went by check date. And that is also how W-2 compensation works. If a check is paid in the current year, it goes on the current W-2 even if the first pay period was for some days within the prior year. In all the processing I did on 401k plans, we always used check date and had no idea on what the actual pay period ending date was. That was not a piece of data that any client provided to us. I do agree that you should be consistent over time.

If there are a significant # of mismatches and the information is being pulled off a written/typed W-4/benefit application forms listing dependents (which can be prone to input mistakes due to different handwriting styles), it might be time for a full plan audit of dependents, totally taking off the argument of any type of immigration issues, etc. This might also show good faith overall for the plan if there are a lot of mismatches. While for payroll purposes a copy of a SS card is not required (unless it is under an I-9 verification), it can still be good business practice to get a copy at some point so that the employer has a reference and can cross-check without having to have the employee bring in every card at the time of mismatch. I have found it to be much easier to get such paperwork at time of hire/enrollment. But know some employers who have later gone in and asked for proof of relationship and copies of SS # (either card or family tax form) I know personally our family has had to provide information on dependents to the employer quite a few times (dh has changed jobs quite a bit) to prove dependents are true.

You might consider the CEBS from IFEBP. That at least would give you a basic book knowledge, although I agree with Lippy that coming from a zero experience is ill-advised...better to hire in someone with experience/knowledge.

If you reduce your 401k contributions, will you be lowering it enough to lose out on company employer match? There's not an investment greater usually than employer match. Honestly, if you have the money elsewhere to be able to pay the loan back, why not just use that $ to loan the family member and then if/when you would have needed that money personally, then take the loan from the 401k. (But I will admit my bias against 401k loans -- to me it is just another debt which I try to avoid.. Too many lower other savings to pay for the loan payment and you are really setting back your own retirement during the time you have lowered your contributions and possibly lost match. If you can't afford to give the family member the $ directly, you can't afford it. Playing stock/investment broker with your 401k account is not smart.)

Don't know if this will help but my husband's personal 401k with a very large recordkeeper (one of the very well known ones in the industry) has an electronic statement that is available after he/ I log into that account. That way you have to have a login/password to get to the information, which might be more secure than an email or a snail mail copy. The employee count is close to 50k employees for that one plan. It does not get snail-mailed or emailed to us at all. I think they do have an option to get a paper copy, but there might be an administrative fee for it. They do have his email address though to send confirmations for transfers/deferral changes, etc. But they don't use it to email any periodic statements at all. (off topic) I will say from having to deal with over 1000 email address for cllents in a totally different business that the email management process can be a bear because of returns -- just like paper statement returns or sometimes even worse since the email addresses sometimes are easy to tag back to the real person.. At least sometimes paper statements get forwarded by the USPS. I am sure larger companies have a process for it, but it can get unmanageable. And having the participant access to the statement when they want it might be a better more useful process.

No, think of it this way---If there is a large drop in the market after taking a loan, their remaining balance might drop below the 50% level, especially if they stop deferrals and are only making small loan payments. Do you make them put in more to make up for that difference? No. And many plans require the participant take out any available loan funds before granting a hardship. So it is my understanding that the 50% does not have to be maintained.

Sorry if I took your question off track. My brain tends to go beyond the basic benefit question to the larger HR consulting questions. I've been trained on the HR consulting side of benefits to sometimes go to the larger question to help solve the specific question asked. I'll be sure not to respond this way to you in the future. If I don't have the specific answer, I won't brainstorm how to work around it a different way since this is your pet peeve.

Haven't seen a client do it, but I agree they need to amend their plan, not because it is a fringe benefit, but because it needs to be excluded elsewhere if that is what they want to do. From a payroll/timekeeping side, it seems like it could become a nightmare of epic proportions unless they have a very clean streamlined PTO system with very few edits. I am not sure I would argue TxFrBnfts, but I would ask the "why do they want to exclude compensation during PTO?" question to see if there is a solution there. Is it because they want to lower their employer match? Do they stop other benefits during PTO (health insurance coverage, life insurance, Workers Comp, STD/LTD)? I suspect all those answers are NO. So why this one?

That wouldn't be so fast at a large HR firm (or possibly even some smaller ones!). Anything that left our offices was reviewed by at least 3 employees - the one doing the work, their supervisor and then someone who checked what was being said in the communication and how. We didn't just "open the program, select copy all, paste in a spreadsheet, and email over." There is some liability in making sure it is the latest data, correct information, etc. That there was a formal pass over of the data along with formal communication to the new firm and the old client. Many firms have much different controls in place especially when it is the last information they are sending that they won't have any chance to fix later should a mistake then be found that they would have liability for. That takes more than 15 minutes and is much different than sending a spreadsheet on a regular basis as the current firm. You may know how you would do it. But that is not always how other firms operate. Especially the side losing and the side that wants to cover any potential future liability..

Also back in the days of the one of the Big 3 HR consulting/actuarial firms, we used to charge the client for the employee time to get the data off our systems and into the format the new 401k administrator was asking for. (I don't remember too many DB plans changing firms) And it was never an easy format. Data came to us weekly/monthly/quarterly and the work we did on it was what made the output. The plan sponsor received written reports but it would take much more time to use a hard copy (we did on in-take via hard copy and it was so very painful and in the end they had to pay us to do so when it would have been easier/faster/cheaper to pay the prior recordkeeper but they didn't want to give them notice until we were 100% functional UGH!) I don't know what they are asking for, but should realize while it is easier now to pull data, it still takes time. Especially if you want good records. And $500 per plan when you think of an hourly wage, truly isn't that much if you want it done well. And why should the firm the plan is leaving lose out on that cost?

Any rule you are looking for wouldn't have worked for any of the older quarterlies (and I've been told some still exist) that we had long before dailies. Daily recordkeeping does make it easier to allocate the contributions/earnings faster but back in the day of quarterlies, the plan sponsor had to deposit timely but often the recordkeeping didn't happen for 2-3 months after the first contribution of the quarter. So if you look at it that way (the simple old days) it might make a bit more sense. However there were times where the last contribution deposit of the quarter out of paychecks didn't make it into the trust due to that timing. Oh the fun of reconciling 401k quarterlies. I can reconcile just about anything now LOL....finding that last d*mn penny! The money was deposited in the trust so it was earning interest/gain/loss but that wasn't specific to any participant until the earnings were allocated on whatever the basis formula was for the plan.

My opinion as HR/Payroll and Benefits of a small set of companies --> Because most employees near the minimum wage levels would rather have the wages than the benefits of health insurance. Back in the good ol' days, when health insurance was great coverage with low premiums, we had all the employees at one location ask to be given the money as wages rather than the coverage -- they weren't using it and in review, we were paying for non-used coverage. Many employees at that level will find another employer that doesn't "force" coverage who will pay a higher hourly wage and that is what they are looking for (especially if they can get cheap/subsidized Obamacare from the marketplace). They need that extra money for shelter/food/etc. And I have to agree that even if covered, many times the copays and deductibles are so high that they might as well not be covered.

Back in the day, aftertax (post86, pre87) contributions were often not matched so that it encouraged employees to put at the least the basic matched % into the pretax deferrals first and probably helped the ADP testing. And that pretax deferrals might be more likely to stay in retirement funds longer due to the later tax penalties and consequences, since Roth and aftertax could be pulled out more easily (or at least with less tax consequences) I have to wonder if that isn't the employers thought? They want to allow but not encourage?

I agree I would consult my own counsel especially if you have some way of verifying you proved the records needed to the client and that they were responsible for maintaining them. I know at the very large HR consulting firm I worked for, we only saved records 7 years but did provide reports and copies of participant statements every quarter to the plan sponsor.

And it's how it worked before dailies were available. We usually did monthly or quarterly valuations (reconciling the trust to the plan/participant accounts) and distributions happened either during (and they got NO earnings positive or negative) or they waited until right after the valuation (which was usually 4-6 weeks after the end of the quarter) to receive that valuation depending on the plan rules. That said any increase/decrease in the "funds" was allocated using a basis (that generally included taking out 100% of the distributions and loans and crediting 1/2 the contributions and loan payments although some plans could be different basis calculations) over the rest of the participants and did generally work itself out, but we had pretty steady investment funds and the participants/plans generally only had 3-4 choices to go between. And the market was pretty steadily increasing. Now that the markets and investments are all over the place, I think the liability has increased as to the change in assets over time. That's why it surprises me that there are still annual plans personally unless the funds are 100% from non-publicly traded stocks/funds.

I agree that if they can only restart at re-entry dates, then it doesn't matter why they want to stop a deferral. If they stop one, then they can't defer again until the next entry date. Obviously that won't matter on final checks, since they won't have another check. Can you make the case that they will lose out on company match if they don't defer this type of compensation? That's usually the best argument to them against stopping and then wanting to restart. They usually don't care about the administrative side (which does leave open a wide span to make errors in re-starting) honestly. That said, I would have them sign a form stating that they understand stopping the deferral on the bonus/vacation check will stop their deferrals until the next entry date. I'd follow the plan document and just tell them that if they want to stop the deferrals they can but must stop all until the next entry date. And if there are enough asking (or these are the executive board), you might reconsider the policy as it stands and whether it could be changed through a plan amendment .

I'd make sure they had received it by 7/30. I wouldn't play the game of when it was postmarked honestly. You don't want to give them a chance for rejection or missing the time frame.