CLE401kGuy

Thanks everyone for your help here, it is greatly appreciated....!

If an employer started a calendar year 401k plan in 2000 and only just started doing 5500's in 2014 - therefore, missing 2000 to 2013 filings - essentially missing 14 filings in all, do all 14 need to be submitted through EFAST2 - or do you just submit for open years... it may be difficult to locate the information for the initial plan years... i see that there is a $1500 cap for a single plan if multiple years were missed, but nothing that says if you need to file all returns back as far as missed.... (since it doesn't say that, perhaps it's because they all need to be filed...) Any thoughts would be appreciated! Thanks

As a side thought on this.... I'd really like to test all my employers as one for 401k effectively having 1 big ADP test for the 2016 year.... For 401m though, I'd rather test my employers separately.... Only one of the employers in the MEP of the 4 has HCE's, but the match rate for the employer with the HCE's is greater than the match rate of all the other employers... Am I permitted this type of 'picking and choosing' in the year of disposition (i.e. converting over to the MEP)

Plan is a calendar year plan. Plan is converting to a MEP 7/1/16. Since the conversion is mid year - can I use full calendar year wages for 401k testing and can I still test the groups together in this year of conversion? I'm not quite sure how the 410(b)(6)© rules apply when I'm taking a plan into MEP territory.... It's converting to an open MEP, but the employers in the plan this year are carryovers of those already in the plan previously so they are related

The plan currently excludes HCE's and one particular job class (all NHCE's) that makes up about 25% of the workforce. Total covered NHCE's is 100 and there are 3 HCE's (2 of which were permitted to continuing participating after crossing into the next plan year) No excluded NHCE's were permitted to participate. So the specific facts of the situation seem to permit me to use SCP. When looking at the schedules to attached for a VCP filing, none of them seem to apply. In Schedule 14568-I Schedule 9 - early inclusion because of missing age or service requirement is an option, but not employee class or status.... In a case where none of the Schedules apply, do you just file the 14568 and use that form alone (with any pertinent attachments) to provide the facts? Thanks!

Plan excludes HCE's Employer paid bonuses to participating employees that pushed total pay over the threshold to be an HCE. At 1/1/16, employer did not communicate to the HCE employees that they were not permitted to contribute. As opposed to refunding the elective and forfeiting match, can the employer adopt a corrective amendment to permit the HCE's to contribute ongoing. It is the employer's intention going forward to allow HCE's to contribute. Is this a VCP issue requiring VCP filing and payment to use the VCP program? Thanks

Participant A passed away leaving a 401(k) account balance. The beneficiary form indicates 3 beneficiaries - Beneficiaries 1, 2 and 3. The balance to each beneficiary is greater than $5000, the involuntary cashout threshold. Beneficiary 1 works at the company sponsoring the 401k plan while Beneficiaries 2 and 3 do not work at the company sponsoring the 401k. What options are required to be shown on the form? Would I show Lump Sum and Rollover to IRA or do I need to give the beneficiaries a 3rd option to leave the balance in the 401k plan and take annual RMDs or installment payments? If I showed only Lump Sum and Rollover to IRA and received no forms back from Beneficiary 2 or 3, would the balance just stay in the plan, moved to a separate account in the beneficiary's name and be subject to RMDs on the beneficiary's life expectancy? Just want to be sure I show the correct options required on forms. Thanks!

If a participant over 70 1/2 had a 242b election and passes away - can the beneficiaries then avoid RMD's because of that election and rollover to their own IRA's and establish future RMD's off the beneficiaries' birthdates?

Employer A maintains 401k Plan A Employer B maintains 401k Plan B Employers A and B are controlled Employer A wishes to merge Employer B's plan into the Employer A plan effective 1/1/2016 (streamlining processes and reducing cost of maintaining multiple plans and annual CPA audits). Employer B will adopt Employer A's plan effective 1/1/16 by supplemental participation agreement. And merger documentation will be completed to merge Plan B into Plan A 1/1/16. Item 1: Since A and B are controlled and Plan B is merging into Plan A - can the 401k elective contribution elections (i.e. Jane does 4%, Jim does 6%, etc.) continue to be withheld and deposited into Plan A effective 1/1/16 based on forms completed for Plan B - my feeling is yes, this is OK since this is a merger. Item 2: Plan A's assets are with Custodian X while Plan B's are with Custodian Y. Due to requirements of Custodian Y, plan assets cannot be liquidated and reinvested until 2/1/16 from Plan B to Plan A. Is simply considering, Plan B's assets as part of Plan A based on merger documentation as of 1/1/16 acceptable? (Proper blackout notice would be completed based on liquidation and reinvestment timing) Item 3: Based on liquidation and reinvestment date of 2/1/16, we'd chose which payroll withholding would be the last to be sent to Custodian Y (for Plan B which is technically part of Plan A as of 1/1/16) - i.e. we'd have the last withholding for January '16 to Custodian Y and then the first withholding for Feb '16 to Custodian X. Any thoughts or suggestions or comments or citations would be appreciated - I've attempted to research a few items and have found some helpful checklists, but not anything that directly covers these issues... thanks, much appreciated

We've been using a system called FileBound. It's quite a bit more expensive than the Edrawer solution we had in place, but a much better system for organizing and retrieval of information. It has some drawbacks as any system will, but they are far outweighed by its strengths. For the pure TPA, checking out Pension Pro might be the way to go though as I noted above - they have a solid system and awesome customer service - they get to know their customers and take interest in your suggestions - we use it primarily for workflow and contact management at this time though

A couple of scenarios I'm wondering what people have opinions about: A class action settles so checks are being doled out to those who participate in the class action: Scenario 1: A plan of the employer's was terminated and fully paid out, there is a surviving plan into which many participants rolled funds - accepted to endorse that check into the surviving plan? Here, I feel it would be acceptable to deposit the check into the surviving plan Scenario 2: The employer (a doctor group) was absorbed into the nearby hospital, their plan was terminated and fully paid out - who or what entity is entitled to the settlement check On this one, I'm not sure - can the check be cashed by any entity?

Deceased participant named 1 beneficiary for his 401k account balance. The beneficiary wishes to have the account balance split evenly with another individual (her niece) who is not named as a beneficiary Is this permissible? Both distributions will be to IRA's so there will be no tax implications My thought is that if the beneficiary is signing off on the instructions for distribution, she can divide the distribution as she chooses.... Thanks in advance.

If the employer was willing to do this, could that open up the possibility? My guess is they will not - but the employee is considering an exec level associate I believe....

Participant is age 50+ On 3/11/15, he's asked if there is any way to go back and do the catch-up elective for 2014 at this time Since the calendar year is long ended, and he's already rec'd W-2 - could the employer withhold now and issue an updated W-2? The participant is an employee at a C-Corp My answer is no - just seeing if there is anything creative I could recommend outside of indicating the participant should just increase his elective contribution % for the 2015 year

I really appreciate the feedback, helping me shape response to the client!

Would you feel differently if enrollment materials stated prominently that rehired employees who had been participants immediately re-commenced participation at the rate of 401k withholding in place at termination subject to the requirements of the plan document? something to note also is that only 8% of eligible participate - of this core group more than half of the people have over 5 years of service so they are much stickier employees than those who are apt to come and go.... so by leaving in the 401k %, it would save the client from cherry picking the random participants to re-enroll who had been contributing at term... Agree with the fact that a participant might not remember he or she was doing 401k but ceasing 401k is immediate so they could turn it off immediately if they decided they didn't want to continue contributing on rehire I really appreciate your point of view - this becomes a tricky issue with such a large employer!

Plan with approx 8000 lives and continuous flow of rehires - rehires automatically re-enter the plan per the plan document - could /should the sponsor just leave any terminee's 401k withholding percentage in their payroll system so if they rehire, 401k automatically re-starts - and should the participant be given materials again since they rec'd the materials at original hire. SPD describes how rehires are automatically back in the plan subject to rehire rule / rule of parity described in more detail in plan doc.... I'm looking to recommend to sponsor to leave the 401k withholding % in their system so it's automatically re-started to avoid having to cherry-pick thru rehires to see who had been participating before... our office verifies as contributions are made that rehires are subject to re-entry thru retirement plan software.... (in the vast majority of cases based on how rehires are made this seems like it will work best) - no additional enrollment materials on rehire since they rec'd the info at original hire... Any thoughts or points to ponder would be appreciated....

Talking to the attorney who preps our plan documents today and he's of a mind that any plan document fee including elective amendments and plan termination fees can be paid out of plan assets - I'm pretty sure I was at an ASPPA sponsored event where the speaker indicated that elective fees such as elective amendments and plan termination fees were considered settlor fees and therefore could not be paid out of plan assets - anyone care to chime in? Thanks

jkharvey - isn't using the system virtually the same as it is just without the infrastructure - what do you hate about it? do they not deliver on service?

With prior year testing am I permitted to carve out NHCE's who do not meet statutory eligibility - I'm thinking that I don't but wanted to see what other think... Thanks

Our office is considering moving to Relius ASP - Managed Services where they'll host our use of the application and we can eliminate having servers to update, upgrade and maintain in our office. Does anyone have any experience with their Managed Services that they'd like to share. Leaning toward moving in this direction. Thanks!

Working with a client who makes frequent acquisitions - I'm looking to provide a listing or checklist of items that are relevant to consider during the acquisition process - instead of creating something from scratch, I'm looking to see if anyone has or can direct me toward such a checklist - not something that's full of legal verbiage - something simple that can get topics like the following considered: Identifying the type of plan if any in existance Ability for participants to take distributions Identifying loan issues - in particular abilty to rollover or continue making payments on loans Vesting - need / option for giving vesting based on service with the acquired entity Plan eligibility - need / option for recognizing service with the acquired entity for plan entry based on the transaction date Termination of plan pre-transaction vs. post transactoin merger Identifying directed investment and SDB arrangements and what having either means to participants - i.e. consider that plan with SDB going to plan without those participants may have to give up their SDB. The more basic the better.... Thanks in advance...

Plan currently has a Safe Harbor Match - the employer would like to eliminate the SH Match in favor of a match subject to vesting - The plan year just started 6/1/2014 - so we're just two months in.... to elminate the SH match - need to give 30 day notice, amend plan before end of PY and then be subject to ADP testing and TH requirements (this is prior to PY's beginning after '14 after which midyear SH suspension is permitted only if you’re operating at an economic loss or had included a potential reduction/suspension statement in your annual safe harbor notice to participants. Is it permissible for the employer to turn right around and implement the new match that will be subject to vesting. Say that the SH provision is eliminated effective 8/31/14 and the vested match starts 9/1/14. I don't see any reason why this wouldn't be permitted, but wanted to hear some thoughts.

Thanks, it's an odd design, but agreed that if they terminate they don't get the PS if hired in the same PY - they could come in for Elective and Match since those are earlier, but no PS if not employed last day and having entered the plan in a previous year

Plan has last day entry for PS no age, no other service. Plan does not require employment on the last day of the PY to receive PS allocation. Participant hired 7/8/13 and terminates 10/15/13. The person is therefore not employed on 12/31/13 which is the entry date. However, they are employed during the PY and therefore meet the requirement to receive an allocation of PS. Does not being employed last day then prevent them from entering the plan and thus no allocation. My thought is if they're not employed on the entry date, they don't enter the plan and therefore no allocation. Any other observations would be welcome. thanks