Doghouse

Does anyone have certainty on the exact timing of the communication to participants? I have seen everything from 60 days before the beginning of the plan year to 60 days after the last contribution for the plan year is funded. I realize different document providers may have different approaches, but it would be nice to know what the actual position of the IRS is.

I remember this was a common provision in a lot of plans in the 80's. It was a way to manipulate the MP or DB contribution levels from year to year. They largely went away when the CODA concern surfaced.

I think QBI does some work in this area: http://qbillc.com/blog/how-do-defined-benefit-and-cash-balance-plans-become-over-funded

I do have plans that permit in-service distributions prior to age 59 1/2, as long as certain criteria (not very stringent) are satisfied. Like the funds have been aged 2 years or more. Are we to assume that your document has no such permissions? Although admittedly the salary deferral part of it is a problem.

I always hesitate to copy and paste from the EOB due to copyright considerations.

I know a guy too. He works on US, PR, and dual qualified plans. Carlos Gonzalez, Esq., CPA Tel. 787-900-9956 Fax 678-379-4111 Email: carlos@benefitspuertorico.com Webpage: www.benefitspuertorico.com

if you have access to EOB, check out Chapter 3A, Section II, Part G, 5.b.

The EOB cite is from Chapter 11, Section XIV, Part I, #3.

You probably saw this but per the EOB. A 4% minimum would, in my mind, not follow the guidance. Minimum deferral rate and minimum increments permitted. Q&A-3 of IRS Notice 2000-3 permits safe harbor 401k plans to require salary reduction elections to be in whole dollar amounts or in whole percentages of compensation. Section V.B.1.c.ii. of IRS Notice 98-52 stated that a safe harbor 401(k) plan could set a maximum limit on elective deferrals, so long as an employee's ability to get the maximum match available under the plan was not compromised, but had to permit the employee to elect to contribute "any lesser amount." The ability to require whole dollar amounts or whole percentages is a reasonable compromise. Thus, a minimum elective deferral rate of 1% of compensation could be required by a safe harbor 401(k) plan. The regulations adopt the Notice 2000-3 approach as well. See Treas. Reg. §§1.401(k)-3(c)(6)(iii) and 1.401(m)-3(d)(6)(iii).

It's definitely reflected in Plan Committee meeting minutes.

This question concerns the timing of a Roth amendment. We are financial advisor for a plan that uses a TPA. A recent restatement of the plan adds the provision to defer on a Roth basis. The restatement has not yet been adopted, but the TPA is telling the sponsor that participants can defer on a Roth basis now because the effective date of the restatement is 1/1/19. Somehow it doesn't seem quite right that they are able to do this before the amendment is executed. Sanity check?

I know this is (or was) discussed in the ERISA Outline Book, and as I recall, it was presented as a risky alternative.

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Following the passage of the Bipartisan Budget Act, plan sponsor agreed to adopt recordkeeper's recommended best practices, which included offering an option to any participant who is on hardship withdrawal suspension to end that suspension early. However, no one ever notified the one participant who fell into this category. Is this a missed deferral opportunity that needs to be corrected? Dog

Thank you Kevin!