GMK

If these factors applied to our ESOP, I would not take money out of the Participants' accounts to buy a new D/L. If the employer wants some CYA protection, then the employer can pay for it. In our case, we as plan sponsor might pay those costs, but not before checking with our ERISA attorney about the possible pitfalls of not getting the D/L. (2015-19 permits, does not require, Cycle A's to apply for a D/L.) The review for a new D/L could identify required changes in the wording in the Plan Doc in the form of writing in 3 pages of regs that are currently incorporated by reference. But that's cosmetics that reviewers like to see; it clearly doesn't change the plan terms one iota (in our case, it was a section that had no applicability to our plan). But I digress ... One possibility is that down the road they will require a D/L from the most recent cycle as a condition for adopting a prototype or VS document when they come out. Who knows? If that's the reason the plan needs a new D/L, then I think the plan sponsor, the employer, is on the hook for the cost of the D/L. Looks like someone decided that Cycle A people should be left to twist slowly, slowly in the wind.

It's just a schedule that is suggested in things I've read ... no guarantees.

For some of us, this will be less of a concern when the prototype and VS ESOP plan docs are available in 2018 or '19. Until then, I think the D/L's we have will probably not go stale.

Yikes. This is also good to know.

an earlier discussion: http://benefitslink.com/boards/index.php/topic/55729-boy-count-eoy-or-boy

Thanks for the correction. I was thinking of discussions back then, including on BenefitsLink, which suggested that they might come after you in the "2 or3 days" case, but that must have been paranoia and uncertainty talking. If they were going to enforce a "less than 7 day" rule, they would have done it by now. Good to know.

I like post #5 here: http://benefitslink.com/boards/index.php/topic/45730-employer-not-submitting-payments-withheld-on-my-check/ as a description of when deposits have to be made, that is, there is a 7 day safe harbor for depositing the assets in the Plan, but if deposits can be made in 2 or 3 days, then taking more time than that is too long. And the timing of when the allocations are made by the RK is another matter, which the Plan Administrator should address as a fiduciary responsibility, but not because of the deposit timing safe-harbor.

You're way ahead of me if yours are only on Friday mornings.

^agreed. The initial rollover was OK, because the participant was still employed at the time and did not have a required beginning date when the distribution was made.

Once a participant is required to take RMD's, the first portion of a distribution is deemed to be RMD until the RMD amount for the year is satisfied, so I'd pay out the remaining funds from the Plan as RMD and inform the IRA of how much of the RMD is left to be distributed from the IRA, that is, how much of the previous rollover has become not eligible for rollover because of the termination of employment and age. Based on previous postings, others may say just roll it over and let the participant get it all back from the IRA, but that's not my understanding of how it works.

This, from 411(a)11, may help (and the Plan Doc should specifically authorize force outs to terminates at or after NRA): (4) Immediately distributable. Participant consent is required for any distribution while it is immediately distributable, i.e., prior to the later of the time a participant has attained normal retirement age (as defined in section 411(a)(8)) or age 62. Once a distribution is no longer immediately distributable, a plan may distribute the benefit in the form of a QJSA in the case of a benefit subject to section 417 or in the normal form in other cases without consent. (5) Death of participant. The consent requirements of section 411(a)(11) do not apply after the death of the participant. (6) QDROs. The consent requirements of section 411(a)(11) do not apply to payments to an alternate payee, defined in section 414(p)(8), except as provided in a qualified domestic relations order pursuant to section 414(p).

Some of us need both, so thanks for your posts. As an aside, we were scrambling for while when they were going to move the small group boundary up to 100 and force us into the age banded, community rated mode. It would have significantly increased the premiums, co-pays, and deductibles compared to our current plan (coverage by a long-established coop). Fortunately, they left the boundary at 50, so we could keep our plan.

Leaving voluntarily is usually less stressful on your co-workers, and the timing is easier to coordinate with their busy schedules.

So, if the employer actually has fewer than 100 FTEs (or maybe it's 100 or fewer FTEs), the employer cannot force enroll the employees into the company plan, even if the plan meets the affordability and coverage requirements, true?

one last time for this sleepy, dusty delta day. Retirement looms in February, so I can promise that this is my last mention of the 3rd of June. I won't bug you about it next year.

Ah, yes, WC (possibly known as Lou in Britain ), who advised, "Never try to impress a woman, ..."

If FICA is deducted from the pay or the pay counts as compensation for plan purposes or like that, I don't see a separation of service. For example, the person wouldn't get a "2A" on line 16 of the ACA form 1095-C. If the situation is more creative, check with the lawyer as 2 Cents suggests.

I would not change the match until after the 30 day notice period is over. The notice gives people information that may affect their decision on how much, if any, they defer. Someone might think I'll defer X% because I get a match every payday, and that match is earning me money for the rest of the year, but now, I'm just gonna do Y% because I don't get the match until next January. What matters is that the change in when the match is paid could (may not, but could) affect a Participant's decision (logical or otherwise) about deferring. For that reason, I wouldn't drop the per payroll match until Participants have an opportunity to revise their deferral elections.

If "more than 1%" included 1%, then it would say "1% or more." More than enough is never just enough. So, do you think my belt is too short now, because they reduced pi to 3.0? or maybe because I 've had more than enough pie?

In the definitions section here: https://www.law.cornell.edu/uscode/text/26/416 a 1% owner is person who owns more than 1%. .. as Belgarath said already.

Tom and Kevin C have answered your question. To add, consider that in most cases, most of the HCE's have been with the company longer than most of the NHCE's, so the proposed match favors, or is likely to favor, the HCE's. So it's not a safe harbor match.

FWIW, this is my understanding as well. I doubt that a plan can allow participants to pick and choose income types from which deferrals will be made, but even if it's legal and the Plan Doc says OK, it could be an enormous administrative headache that a plan administrator would, in my opinion, be wise to avoid.

^-- agreed. One case where annual valuations will likely continue is for ESOP's that hold company stock that is not publicly traded. Valuation of the stock requires audited financial statements, which take a month or two, so the stock price from the valuation is generally 2 to 3 months old by the time it is determined ... not to mention the costs of the full company audit and the valuation. The Plan Administrator can do an interim valuation, but unless the circumstances are very unusual, there is reluctance all around to go through this process more than once a year.

The spouse can do a rollover to the spouse's own IRA, but if the benefit stays in the Plan, it stays in the name of the Participant FBO the spouse The spouse would then take RMD's from the account. For the year the Participant died, the RMD is based on the Participant's age. If the Participant already took an RMD for the year in which the Participant died, then no additional RMD is required for that year. For the following years, the RMD is based on the beneficiary's age each year. edit: or the spouse could choose the 5-year rule for the distribution.

You can leave the distribution form as is. Explain the options for staying in the 401k in the cover letter. If they leave their benefit in the 401k, they can take distributions based on the applicable life expectancy or in some cases based on the 5-year rule. The 5-year rule is generally available if the participant died before the Required Beginning Date, and some plans allow it in cases where the participant died after the RBD (when applicable, look at what's been checked in the adoption agreement ... and even then the wording may not be crystal clear). Beneficiaries have to choose life expectancy or 5-year (if available) by September 30 of the year following the year in which the participant died. If they don't make the choice, the Plan Doc says how distributions will be made. My understanding is that the account for a non-spouse beneficiary remains in the participant's name FBO the beneficiary and basically would work in a way similar to the way an inherited IRA would work.