CLE401kGuy

Does anyone know the citation for where the code indicates that RMDs must continue to a former 5% owner if he or she had to start taking RMD's at 70 1/2 but have since divested themself of ownership?

If the Plan Sponsor specifically names the TPA in their retirement plan's plan document as the Plan Administrator for purposes of signing Form 5500, can we entirely avoid having the Plan Sponsor sign the 5500 or any authorizations to file at all? My hope is 'yes' and then we can modify our 5500 process to just provide a copy of the filing with the Plan Sponsor for their records and the SAR for them to distribute to their participants. Could this signing authority also extend to the SSA filing? As it stands now, we file 'on behalf' of the Plan Sponsor who signs the 5500 and signs authorization for our firm to file. I'd like to eliminate all of this back and forth, eliminate plan sponsors' signatures being out on EFAST2 and just streamline the entire process. I'm completely comfortable with our firm signing since we very closely monitor deposits, review in detail for late deposits, review participant census ongoing and the like. Anyone's POV on this and what they do would be greatly appreciated. Thank you,

For clarification - we're passing ABT on contributions and then passing rate groups on benefits - As long as we can interchange those from test to test, we're good!

The plan satisfy Average Benefits Testing on Allocations permitting us to use the lower threshold to pass rate groups. Rate groups then pass on benefits. Is it permissible to satisfy ABT on allocation rates and then satisfy rate group testing on benefits? This is how the question should have been posed initially.

The employer sponsors 2 retirement plans - one is a regular 401k and the other is a 457 Plan for which has no 5500 filing requirement - when filing the 5558 to extend the 12/31/2018 filing due 7/31/2019, the 401k was intended to be extended but the 457's plan name and number were used by mistake - is fixing this as simple as sending correspondence to the IRS in advance of them sending any late filing notice to bring the issue to their attention? On the IRS website, it addresses getting a late filing notice and at that point realizing incorrect incorrect info was entered on the 5558 and just responding to that late notice indicating your error... I'm figuring, it's always best to get in front of the issue as soon as we know about it and not wait for a late notice from IRS... and when / if we do get a late notice, being able to point to correspondence that brings the issue to their attention... anyone's thoughts would be greatly appreciated

A sponsor adopting an open MEP decided to start its own plan. So they gave notice to the MEP and the balances for the active participants were rolled into the sponsors new plan. Balances for terminated people were left in the MEP though. Should the balances for the terminated people have moved as well? Have another recent situation when the plan sponsor was acquired by another company and the acquired sponsor is transferring into the acquiring entity's plan. Again, do the balances for participants terminated prior to the acquisition move into the acquiring entity's plan?

Client instructs participants to make elective contribution changes in their payroll system. In error, the online elective contribution change feature was activated on the record-keeper's website. Several participants made elective contribution changes on the record-keeper's website despite instruction from the plan sponsor to only make changes in the payroll system. Does the sponsor need to recognize the changes on the record-keeper's website? Thanks in advance for anyone's thoughts on this!

Perfect, thanks much Tom!

FACTS Plan is top heavy Plan entry has immediate entry for 401k, 1 yr and age 21 for profit sharing source Plan is safe harbor Any participant who entered the plan immediately for 401k but did not yet meet the eligibility requirements for profit sharing and is not terminated is subject to receiving top heavy minimum. Is the top heavy minimum given to these individuals as safe harbor or profit sharing? Thanks

Plan acquired entities with 400 new participants during the course of 2018 - all hired 2/1/18 Plan is recognizing service from date of hire for the 400 new participants In 401k testing, I am excluding all those who do not meet statutory eligibility Do I count the participants I'm recognizing past service for in the non-excludable test It seems like I would not since their hire dates with the employer do not meet statutory eligibility regardless of the past service that is being recognized Thank you

A 401k plan converted from one investment product to another product with the same recordkeeper. A couple, but not all, funds in the plan's core lineup changed and the account number changed. Discovered that the notice to the participants announcing the change was not delivered. Is the fix to forward the notice now to communicate the change? What other correction would / should be made? Thank you I googled on the topic, but did not find this situation addressed in the 401k fix-it guide and no articles or citings came up regarding the specific topic....

Safe harbor match formula is 100% on the 1st 3% and 50% on the next 2% Match is calculated on a per pay basis Participants elective withholding is 5% Total Compensation is $286000 Retirement plan software matched participant 4% of each pay based on the match formula for a total of $11440 for the year But isn't the max match permitted for this person $10800 which is 4% of $270000 Pretty sure I need to forfeit $640 of match since participant was matched on wages over $270k, but the per pay basis for allocating the match is throwing me off Any thoughts on this would be welcome... Thanks

Thanks Luke - the total error despite going back to 2014 is only $2900 in over payments (elective flow is about $500k total each year) - there are no 415(c) issues or discrimination issues with HCEs (there is only 1 HCE in the group affected and he has one of the smaller overages) there is no match so that isn't an issue and the annual profit sharing was calculated off payroll records with the correct compensation by the TPA Thanks again for you thoughts on this - yes it is a weird one!

Situation: the payroll company was calculating elective withholding including unpaid time off which in turn has caused people’s deferral rates to be off. For example, if a participant worked 32 hours for the week, and then had 8 hours of unpaid vacation. the payroll company was taking 40 hours X $10 an hour X 5% to equal $20 of withholding. However, the participant was only paid $320 and correct withholding would have been $16. $20 of $320 of comp is actually 6.25% withheld, not 5%. So the withholding election was technically not followed based on what the person was actually paid. This has been happening since 2014. Since its unpaid vacation it's not huge $ wise but what correction is to be made.

Thanks for the quick response - that was what i was thinking would be correct - I appreciate it!