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Are federal work study students considered "employees" and eligible to join the 401(k) Plan? The document does not specifically exclude this group. These individuals while they are working for the employer are "students" and are not eligible for any benefits offered by the employer. I am trying to locate some regulation/guideline that provides these individual are not considered employees for purposes of the plan. Thank you.

The document does not address how to correct the test!. Seems your plan uses hours of service. I am hoping the plan can use a different methodology, i.e. date of hire, compensation etc.

401(k) plan excludes a group of employees. Historically this has not been an issued. For 2017 when running the coverage test for the excludable employees, coverage fails. This will require the employer to bring in a substantial number of excludable employees to pass coverage. These employees will all receive a QNEC. the issue is which employees are brought in to pass coverage. Can the plan use date of hire as the basis for determining how to bring in? We looked at hours ( those with the hours closest to 1,000) and this results in an OUTRAGEOUS QNEC. Using date of hire or compensation would result in a lower cost. Can not find anywhere in the reg the process that must be followed in determining who gets brought in to pass coverage.

I realize this topic was discussed in the past, but want to see if anything has changed. Company A has a SIMPLE IRA Company B has a 401(K) May 1, 2018 Company B purchases (stock purchase) Company A. Company B wants the employees of Company A to participant in the 401(k) Plan. The SIMPLE will remain in place ( "frozen") until it can be terminated. My initial thought was Company A employees cannot defer into the 401(k) Plan until 1/1/2019. Their contributions would continue to be made to the SIMPLE Plan for 2018. Company B would make the employer contribution. 1. Does Company B have to continue the SIMPLE Plan - could they leave the plan alone ( no contributions) until it can be terminated? 2. Is there any way the employees of company A can defer into the 401k plan for 2018? Or are they out of luck? thanks

Employer has an EACA plan and auto enrolls participants at 4%. They now what to add auto escalation at 1% up to 10%. Question - Since this is an EACA Plan, is the employer prohibited ( regulatory restriction vs document restriction) from including the participants who made an affirmative election in the auto escalation? For example Jane defers 5% of pay - can she be included in the auto escalation annually? Realize she can decline the auto escalation during the notice period.

Plan is cross tested. Since 2013, THMs were not allocated, and the cross tested allocation was done incorrectly by the recordkeeper. Bottom line, the coverage testing was not satisfied each year, and participants did not get the gateway. Can we self correct? 2013 is outside the 2 year correction period, so will this year need to be submitted under VCP? The recordkeeper is no help and said it is the client's decision to file or not. Client is going to make the accounts whole, including lost income.

If a participant is out on FMLA can they still take a loan from the 401(k) Plan? The loan policy states loans are repaid through payroll deduction. Once she is paid her 6 days from her accrued PTO she will not receive a paycheck until she returns to work. I understand when a participant with a loan is out on FMLA the loan payments are suspended until they return to work. However, this participant is already on FMLA. The loan policy states loans are available to all Active participants. Technically isn't she still considered an active participant? Thoughts??

the participant did not take a distribution before being rehired. they had the proper documentation to support the hardship.

On 12/5/2016 the participant took a hardship distribution On 12/27/2016 the participant terminated employment Employee is rehired on 3/28/2017 Under the terms of the plan, the participant re-enters the plan as of his re-employment date. the questions is - does the prior 6 month suspension remain in place and the participant can not defer until June 2017? Or, is the 6 months suspension disregarded since the participant terminated and then was rehired. Thanks

Employer is a restaurant with several locations. They will be making some major fund changes to the plan. Mailing fund change notices is a big issue, so the client wants to post the notice on their new intranet system. The intranet will be used to post company news and for training. All employees will have access to the intranet while at work. The way I read the electronic delivery rule, the participant must have access to the information through a work site computer kiosk, even if not at their desk, Will posting to the intranet satisfy the electronic distribution rules?

Corporation sponsored a Profit Sharing Plan for several years. The corporation still exists, but there are no employees. The assets in the plan belong to the principal. He no longer takes a salary from the corporation. Some of the assets can not be easily distributed. As long as he continues to file the 5500 and keeps the plan document current, any issue with the plan just going on. He takes RMDs from the Plan and that is the only transaction. Since the principal is the only participant entitled to a benefit, is there any issue with the Trust continuing. It is not an orphan/wasting trust since the corporation is still in existence. Thoughts??

Client has an EACA Plan with 3% default Not a Safe Harbor Plan. They want to increase the percentage to 4% and also increase the cap on the auto escalation. They want the changes effective 1/1/2017. The platform has notified us that they can not get this change implemented before the end of the year, and therefore the client has to wait until 1/1/2018. Per the platform you can not make changes to the EACA mid year. I thought I read you could change the EACA mid year, however it would only apply to new participants. However, since the EACA will not be a uniform percentage for the 12 months, the client may lose the ability to correct ADP refunds by 6/30 - they would have to have refunds issued by 3/15 to avoid the excise tax. Was I dreaming this or is my thinking correct. If I am correct, where can I fund documentation to support this position???

The client's last payroll, a participant reached the $265,000 compensation limit. However, he did not reach $18,000. As of the last payroll, the participant deferred $14,500 and hit $265,000 in comp. They do payroll in house and believe that since he has not reached his deferral limit for 2015 deferrals can continue, however, he will not receive any match on the deferrals since he is at $265,000 Question, - I realize the $18,000 is an individual limit and the $265,000 is a plan limit, But if the participant has reached is compensation limit, can deferrals be withheld from his pay?? My thought was the participant is out of luck and can only defer $14,500 for 2016. But I am questioning my thinking. Thoughts

In January, our client will change payroll providers. I think I would rather have a root canal!! Everyone is working diligently to be sure the correct information is transferred to the new payroll vender. But we all know it is inevitable something will go wrong! Question: would there be any protection if the employer gave a blackout notice to the participants about the upcoming change in the payroll vendor, and while they do not expect any issues, there could be a delay with processing the first two payrolls of 2017. Would this allow a cushion in the event a payroll is not timely submitted and avoid filing the Form 5330. OR is the client SOL and if there is a late payroll due to the vendor change, he will need to fund the lost income ( small as it may be) and file the 5330. Thoughts. Thanks

Participant has loan and is transferred to another division. During his time with the new division ( they also participant int he plan), his loan payments were not withheld. Participant has now returned to his original division. Participant wants to bring the loan current and continue making payments. Participant is past the cure period. 1. Platform will issue a 2016 1099R for the deemed loan 2. Is the only way to avoid the 2016 1099R to file under VCP? 3. Any provisions in the self correction to cover missed loan payments due to management error ( transferring between divisions)? I can not find any why to prevent the 1099R from being issued unless they file under VCP. Just looking for some thoughts? Thanks

Participant exceeded the 401(2) limit for 2015 with two un related plans. the error was not discovered until AFTER 4/15. 1. Excess is income for 2015. 2. Excess and income will be distributed in 2016 and income for 2016 is the excess subject to 10% since the participant is under 59 1/2? since he was not eligible to defer the amount, I would think the 10% does not apply. Thoughts

Company A sponsors a 401(k) Safe Harbor Plan - Company B is a participating employer - Not related to Company A. Company B wants to spinoff to another plan. 1. The plan Company B will spin off to is not Safe Harbor Can Company B Spinoff Mid Year to a Non Safe Harbor Plan? I thought a safe harbor plan could not transfer to another plan mid year. Thoughts Teresa

Participant makes both pre tax and Roth 401k contributions. The participant took a Hardship Distribution ( from pre tax account). Payroll Company stopped the pre tax deferral, but continued to withhold the Roth Deferral. to me a deferral is a derferral is a deferral. Therefore if a participant takes a hardship all deferrals ( pre and Roth) stop for the 6 month suspension. do you agree??

the new mid year amendment guidance does not address merger and aquisitions. my questions relates to a spin off plan. Can a SH Plan spin off to to another existing SH Plan mid year? The SH contribution in both plans is the same. Employees in the plan spinning out will be immediately eligilbe to participate in the new plan. What would happen if the SH contribution was different in both plans, going from a SH Match to 3% Non Elective or from a 3% Non Elective to SH Basic match. Thanks

Normal Retirement Age is later of 55 or 5 years participation. Participant directed 401(k) with a Profit Sharing Allocation. If there is no investment election on file, the Profit Sharing is invested in the Target Date Fund closes to NRA. Question - According to the QDIA the Target Date Funds are based on the participant's 65th birthday. Since NRA is 55 do the Target Date age brackets need to be based on age 55 vs 65?? Thanks

Safe Harbor Notice states the SH Match will be made each payroll period. The plan sponsor wants to change this to year end. The SH Notice will be updated to reflect the SH Match will be made at year end. NOTE: the Adoption Agreement does not specify the timing of safe harbor match ( operational item) and therefore no amendment is needed. Doesn't the employer have to make the payroll by payroll match through the end of the 30 day notice. For example if the notice is provided to participants today. doesn't the safe harbor match continue for each payroll period from today to June 30th ( end of 30 day notice period)? OR can the employer stop the SH Match as of today and just provide the 30 day notice stating effective today the SH Match will be made at year end. Thanks

Plan is going to remove 2 funds and add two replacement funds. Participants will receive notice 30 days prior to the change date. Question: Does the notice to the participant regarding the fund change need to include the information about the new funds: i.e.. expense ratio, benchmark, performance history etc. The platform for this plan stated all the client needed to do was add the link where the participant can access the fund data sheet. Not the platform does no work on these notices, leaves it up to the client. With other platforms they provide the specific data about the new funds i.e. expense ratio, benchmark, performance etc. When changing funds is it sufficient to just provide the platform's web link for the fund?? What if the participant does not have access to a computer ( these employees still exist!!).

Accounting Question: When a plan offers Roth Contributions, is there an order in which deductions are withheld from the paycheck. Pre Tax Deferrals with held first then Federal Income Tax and Social Security The question is if the participant has several after tax deductions, is the Roth the first or is there a hierarchy as to which after tax gets withheld first?? Or does it matter???

Employer's has a QACA Plan and makes the SH Match each payroll period. The SH Notice states the SH Match is made each payroll period. Effective 6/15/2016 the Employer would like to make the SH Match at year end. any issues with this? employer will provide 30 day notice and an updated SH Notice with this change. Thoughts

Facts: Participant took a loan on 6/23/2014 Participant terminated on 5/26/2015 No loan payments were made for 2014 and 2015. On 1/3/2015 the recordkeeping deemed the loan in default and issued a 1099R for 2015. Participant is rehired 3/28/2016. Does the fact the participant terminated prevent the employer from filing under VCP? Employee is willing to make all missed loan payments and income related to the late payments. The outstanding loan balance is over $37,000!! If this can be filed under VCP and the Plan Sponsor get approval, does the participant file an amended 1040 for 2015 removing the taxable loan distribution?? Or is the participant SOL!!! Any thoughts........