K2

I had a plan once that was audited by the DOL. They had a couple of hundred employees that they paid weekly. Most of the time we received the deferrals two or three days after the payroll date. But there was one occurrence when they submitted the payment the day after payroll. The DOL determined that the appropriate deadline for this client was one day, because that was the earliest date at which the assets could be segregated from the employer. They went back three years, 156 payrolls, and calculated late interest on anything deposited after one day. The grand total was maybe $100 or something stupidly low. The client asked what to do. I told them that it would cost them way more than that to fight it, so just pay it. And they did.

I'd like a copy too.

A company has a 401k PSP with a SHM. Participation rate is less than 50%. Owner of company is looking to max out, but giving 3% TH or 5% gateway to all employees is expensive. This is a 50 person, 5HCE plan. So the thought is to create a second plan. The two owners and a subset of young HCEs would be in that PS Only plan with 2 year eligibility. Both plans would be TH, but the majority of people would be in a SHM only plan that would satisfy their minimum. So the question is whether or not a contribution to the standalone profit sharing plan eliminates my free pass on TH minimum in the SHM. Thanks!

Sorry. You’re on the hook for deferrals and match

The other participants do suffer if this benefit is paid. It is the fiduciary’s duty to act in the best interest of the plan participants. Paying benefits out when none is owed would violate that. The plan committee should fight this. That said, they’ll lose because the feds have no choice but to defer to state courts in determining who is married (see gay marriage decisions) kind os between a rock and a hard place on this one.

Get a QDRO. Distribute all the assets to the alternate payee.

I like belgraths answer.

I'd be inclined to agree with Luke, assuming that the client had some sort of documentation they could stick in the files. Whatever that may be.

Thank you all for your help. K2

I got a question from a CPA source on an ESOP. They have a client with an ESOP and they have a participant with a very large balance. Distribution is in five years and cash flow is an issue for the company. Does anybody have any good suggestions or familiarity with this issue? Thanks!

A cash balance plan is frozen 6/30 with an estimated distribution date of November 30. The plan's interest credits were also frozen at 6/30. Permissible? Or should interest credits continue through the distribution date.

I agree

I'd be curious, Larry, why you say it is absolutely not allowed. I didn't see anything in the code or regs that addressed it.

Thanks for your help! I would assume this applies to solo(k)'s as well: no SAR for them.

Do Solo DB plans have to issue an SAR?

Neither the participant nor the spouse need to consent.

We were a TSM user and, while we ultimately chose to outsource, we did look at Relius. Then I changed jobs (due to the outsourcing decision) and now I'm at a firm that uses Relius. I have to say I don't like it. It's quirky.

I have, in the past, when rejecting a QDRO, gave specific suggestions on how to change the language so that it conformed to the document and the plan's QDRO procedures. It should be easy enough to do w/r/t to distribution options and the date of the split. That's not to say it's your responsibility to do so.

All of A's employees are terminated w/r/t A and are new hires w/r/t B. The A plan is a SH full of terminees, the B plan that includes the A employees is not a SH. Contribution made by A employees to the B plan are part of the ADP test. Presumably the B plan is amended to waive any service requirements that would otherwise apply to A.

The key thing is to have a documented process and to follow it. I don't think it matters much which data points you use or where you get the data from. That said, the process must be prudent. You can look at any number of MPT statistics, plus expenses and qualitative factors. Just document the process and have it be prudent. Admittedly prudence is a little gray. There are generally accepted investment principles and it behooves one to hew closely to those. But I don't think anyone strays too far from those without some sort of white paper to "prove" their process works. Personally I've used Morningstar and Bloomberg in the past. Morningstar is widely recognized, and Bloomberg contains a wealth of additional capabilities, such as economic reporting.

The calculator.

I don't see 4/1 factoring into this at all. He is past his RBD, the only reason he wasn't paid is that is vested AB was zero.

I don't see where there is any other choice but to contribute the missing match and distribute to the HCE's. There's a similar thread dealing with the SH status, which still exists once you make the contribution. I guess you lose the deduction as I'm assuming the company is now gone, but if it's not, the contribution should be deductible in 2017.

I looked and FT William is good for 6 hours ERPA (2 ethics).

You just missed the ASPPA spring virtual conference. There's another one in the fall. John Hancock and Erisopedia do one hour CE's throughout the year. Not sure if they qualify for ERPA, I know they qualify for ASPPA. FT William has two regional one day conferences, one June 20th in Rosemont, IL and the other August 8th in Philly. Cost is $99. I'm not sure if those qualify for ERPA but the price is right.