30Rock

The transition period will end on 9/30 for both plans, but not sure that is a concern - any thoughts on the 3rd option?

What if I merge Plan A into Plan B on 9/30 which coincides with the end of its plan year? Are there any issues? Both are safe harbor with the same basic match formula. THanks!

What if I merge Plan A into Plan B on 9/30 which coincides with the end of its plan year? Are there any issues? Both are safe harbor with the same basic match formula. THanks!

My question involves the merger during the 410(b)(6) transition period of 2 401k safe harbor plans with the same safe harbor match but Plan A has a plan year ending 9/30 and Plan B is a 12/31 calendar year end plan. The goal is to consolidate into Plan B by 1/1/2023 since the coverage transition period ends 12/31/22. What is the best way to accomplish this? Options I see are 1. freeze plan A 9/30 and adopt Plan B on 10/1 (transition period ends but does it matter?) so participants will be in Plan B with mirror safe harbor match, and then 12/31/22 merger Plan B into Plan A, or 2. change the plan year of Plan B to a short plan year from 10/1-12/31 and maintain safe harbor status, and then since both Plan A and Plan B will be calendar year plans they can merge on 12/31/2022. This option creates 2 5500's as well, a plan amendment and also the need for new safe harbor notices for the 10/1 short plan year, so it appears more burdensome. I do not think create a short plan year violates the transition period rule? I appreciate any comments, thoughts, help since I have not really had this issue post-transaction. Thank you!

I think the window is now 3 years?

Or did the plan rules change to anniversary year at some point and Fidelity was correct, she was not fully vested. Just poor communication? In which case I can see why they want to pay her outside the plan since it may not be a plan error.

I believe this will require BRF testing as well - benefits rights and features if the match excludes compensation. Thanks!

A number of new hires do not have an assigned social security number due to social security offices in the area being closed. What is the normal method to set up a retirement account in a qualified 401k plan for these employees? I assume they are resident aliens. What is the recommended procedure for a recordkeeper and payroll department? Thanks!

Was the ADP/ACP deadline this year Friday March 13 or Monday March 16? Does anyone recall the statutory cite for this? Thanks!

Participant is living in her car due to being evicted last week. The plan uses the IRS safe harbor hardship standards which list a hardship may be taken to "prevent eviction or foreclosure". Is there a way for the participant to qualify for a hardship on account of an eviction that has already occurred? She received a Court order of eviction for a date in the past - last month - but is just now applying for the hardship. Of course now she does not have rent, but needs money to live! Is there any way she can get a hardship at this point? Thanks!

Is another alternative to set up an after tax basis source?

What is the pricing on EBG?

Yes the plan I am assuming has less than 1 year eligibility so there will be participants with safe harbor match fully vested in 2019 and then start accruing the QACA match with the 2 year vesting in 2020. Is this ok?

We have a 401(k)(12) ???? harbor 401k plan with the basic match that we want to restate to a QACA safe harbor match 401(k) plan under 401(k)(13). Can the QACA match have a 2 year vesting schedule not just for new hires but also for existing participants with a traditional safe harbor match account that is 100% vested? Our document sources these accounts separately- there is a separate definition of QACA match in the document. Any thoughts would be appreciated!

Sponsor deducted final deferrals from the wrong payroll file, and thus many participants who had increased their deferral elections were missed. The IRS EPCRS guidance states if corrected within 3 months no QNEC is due for the deferrals, a QNEC for the missed match if any must be made and there is a notice. However this is not their concern, they want to know how to correct for the missed deferral deduction opportunity? Is there a W2 or accounting method they could use to fix this like offset some of their pay from the 1st payroll in 2019 so they can make 2018 deferrals? I have not had this issue come up before so any thoughts would be appreciated.

Ok so keep the 1099R coded based on the original distribution of a direct rollover to an eligible plan with no tax withholding?

I have a question on what if any amended 1099R is required in the event the plan issued a premature in-service distribution of the vested account and the participant rolled it over. The Trust will be expected to issue a 1099R with the coding for a direct rollover, however this was not an eligible rollover and the participant is being notified per EPCRS 2-8-52 Section 6.06 that the overpayment is not eligible for favorable tax treatment. Does the recordkeeper issue 2 1099R's with the first being the direct rollover and then the second one being a correction showing the full amount of the distribution as taxable? It was a 2018 distribution and the 1099R will be issued in January 2019 however the distsribution has been made and the 20% tax withholding was not taken. So I would think the recordkeeper should issue a corrected 1099R. The other option is for the recordkeeper to contact the IRA custodian, but that approach does not seem as clean. Has anyone worked on this before or received IRS direction? Thanks!

Thanks Tom!

Under current safe harbor hardship rules prior to 2019, there is the requirement that a participant take a loan if available under the plan before a hardship distribution can be approved. However, I believe there is a stipulation that if the loan will create an additional hardship the plan can waive the loan requirement. Does anyone have any details on this? How would a recordkeeper apply this exception other than relying on employee certification? Thanks!

What if the plan applies the auto rollover provision to all amounts $5000 and below excluding rollovers but the system was set to exclude rollovers so that now there are 20 participants that were not cashed out as their rollovers bring their threshold to over $5000. Can we amend the plan 1/1/18 to include rollovers and apply this provision to the group prior to 2018 that should have been cashed out but were not? Thanks!

Is there a rule that states the SAR is distributed to all participants who are participants when the 5500 is filed in which case there would be none?

In the event a defined contribution or 403(b) plan terminates in 2018 and all assets are distributed by 12/1/2018, a final 5500 will be due 7 months following the date of complete distribution of assets so by 7/31/19. However, will an SAR need to be distributed in connection with this final 2018 5500? The DOL regulations state the SAR is furnished to each participant, but as of 7/31/19 there will not be any participants so can I assume an SAR does not have to be distributed? Thanks! a) Obligation to furnish. Except as otherwise provided in paragraph (g) of this section, the administrator of any employee benefit plan shall furnish annually to each participant of such plan and to each beneficiary receiving benefits under such plan (other than beneficiaries under a welfare plan) a summary annual report conforming to the requirements of this section. Such furnishing of the summary annual report shall take place in accordance with the requirements of §2520.104b-1 of this part.

Does any one know of any IRS commentary or Q&A at an IRS conference where this was addressed? Thanks!

Is there any issue if a plan has immediate eligibility, a 6 year graded match (or any vesting other than 100% after 2 years) and a tiered service match formula as follows: 0-2 YOS – 0% match; 2-5 YOS – 50% match; 5+ YOS – 100% match The participant is not eligible under the match for any contribution until 2 years of service, but the vesting schedule is not 100% after 2 years of service. Is this permitted? There is no stipulation in the plan document either way. Thanks!

Thanks Jack S. That is an excellent point and likely will happen!!