30Rock

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!!

If a 403b loan policy is amended to permit loans to terminated participants - in distinction from allowing an active participant to take the loan and then continue loan payments after he terminates. Is there any down side to this? The loan policy provides for repayments via ACH so provided the terminated participant is able to set up the ACH deductions correctly and timely, I guess this is ok but have not really encountered it before and wanted to know if anyone has any experiences with this situation? Thanks!

Thank you very much!

A plan is removing automatic enrollment as of beginning of its plan year on 7/1 due to an acquisition and new plan design. What happens to the currently enrolled participants? Should they receive a final notice on 6/1 telling them this is the last notice, the plan is being re-designed to the recent acquisition and then give them the methods where they can get more information and change their deferral election? Thanks!

I think if truly we cannot find any payroll or service information then 100% vesting as a certain date may be best?

I have a question that I do not believe I have tackled before and need some help. A large client with a 401k plan has a subsidiary that is an adopting employer they acquired in 2009 it appears. We are being told that they do not have any payroll records for this location prior to 2013. They now have to process a distribution request for an employee with service from 2004 - 2014. They have 2013 - 2014 but missing payroll from 2004 - 2012. They need to determine the participant's vesting for years prior to 2013 and want us to come up with a clever assumption. My first thought is do they not have Human Resources rules to follow or conduct like going to the IRS for copies of prior W-2's? Is there not something they need to do legally? Other than that, all I could suggest is to use elapsed time for 2004 - 2012 and grant 9 years of vesting service and the participant will be 100% vested. And then do the same thing for all other affected participants. Any input of thoughts would be great especially if there is HR steps that I should tell them they need to do first. Thanks!

I agree thank you!

Well here is what I have. No QJSA or other death benefit other than the account balance. And the intent via administrative forms is that the spouse consent to the election of a non-spouse beneficiary. We can certainly require spousal consent to name a non-spouse beneficiary in our new church document but the issue is to use the DOMA definition of spouse does not comply with our pre-approved document unless the document vendor concedes that we can enter this information into a Describe line and it will not affect the pre-approved status of the plan. And the impact on the plan itself would be - 1. what if the participant does not complete a beneficiary form - the default says it is payable to children if any then estate. What if the same sex spouse sues? And 2. what if the participant intentionally names someone other than the same sex spouse as beneficiary and there will be no need for a waiver because his spouse is not recognized as a spouse. So participant dies and same sex spouse finds out he named someone else, can he sue? I just want to see all angles to see if the plan is at risk. Maybe a church plan cannot be sued on these grounds as long as the plan is clear? Church vs state vs federal law, does Church win?

Can a non ERISA steeple church 403b plan use a definition of spouse that does not reflect the Windsor amendment to DOMA? So can a church plan define Spouse to mean a person of the opposite sex to whom the participant is married, but then state that for RMD purposes, Spouse reflects the changes to DOMA as of June 26, 2013? The document to be used is a pre-approved plan that does not define Spouse in this manner, and we would have to write this definition into the plan, which could take it out of pre-approved status which I guess is the second issue. First issue is the legality of using this definition in a church plan. Thank you!

Looking for confirmation on this to make sure the ADP safe harbor is not violated subjecting plan to the ADP test - 401k plan has an enhanced safe harbor match of 100% up to 6% of compensation. Employer is considering adding a discretionary tiered match based on years of service, so that employees with 15 - 19 years will receive a 100% match up to 1% of pay, employees with 20+ years will receive a 100% match up to 2% of pay. The total match under both formulas for the employees in these higher tiers, for which there will be HCE's, would be 200% up to 1% and 300% up to the first 2%. I believe this creates a higher rate of match scenario and plan has to run ADP, ACP and BRF testing. Or, is it just a matter of running ACP and BRF on the discretionary tiered match? Thanks for your comments!