TPApril

Non taxable fringe benefits - not eligible for 401(k) per plan comp definition but plan applied rate of 401(k) election and deposited it into the plan. Amount has been refunded and 1099-R will be issued. Does this now become taxable income for year of refund?

Professional services firm where participants have their own accounts with the broker-dealer. Partners always changing, firm name always changing. How important is it that the trustee name be updated?

Yes, the owners/officers do not participate, but this is the person that runs the business and has been there 20+ years.

Peter - those are great idea, though certainly making things more complicated. So...I pointed out the risk exposure, a variety of options, and the Plan Administrator only wants to do what is always done. I'm sad about that. My guess is she was so trained by prior TPA's. I feel like I put some pretty strong arguments out there. I just don't think it's right to assess a new participant 20% when the decision maker is only being assessed 0.1%.

Bird - I can assure you this was not set up by my firm. It's a new account and apparently that's how they've 'always done it'. Well not anymore. Too much risk exposure. Unauthorized commentary: When I find questionable procedures, it's almost always from larger practices that are focused more on sales than on service and the employees who provide the service. The other odd practice is how many of these practices don't even have a checking system. If a Sr. Consultant had seen this in action maybe it would have been stopped already. But then if they figure this out, their unintended role as my nonpaid sales team might crumble.

401(k) Plan has no HCE or Key participants. Plan allocates TPA fees among all participants in equal amounts. So those with large accounts will have less than 1% taken out, but a new participant will have 20% taken out. This doesn't feel right but I am looking for an argument to give the plan sponsor and wasn't sure if there was some kind of discrimination issue. The one who makes this decision is getting less than 1%. Maybe it's simply that that is not 'reasonable'.

Peter - thank you for your time putting that response together.

A 'friend' was traveling with her family last week, after the effective date of reimbursements for home covid tests, and found her family in need of purchasing multiple covid tests. In the process of taking these tests, the test materials and packaging themselves were discarded. Upon arriving home, this 'friend' contacted her insurance who has informed her that they will need both receipts and the UPC symbols in order to get reimbursement. Is this excessive and even allowed?

So you are saying contributions to the State Gov't plan are incorporated into the 402(g) calculation?

State employee participates in their plan. He also works for wife's firm who has a 401(k) Plan. I know 415 limits are plan specific. But is there an individual 402(g) limit that combines contributions to the state plan as well as the private plan?

Sometimes a question comes up that I should know the answer to and my mind is staring at me blankly. Is the Special Tax Notice required to be provided to a participant requesting an in service distribution? I think the answer is an unequivocal yes.

Yes, I hate to say it, but the one outstanding loan happens to be a 50% owner, albeit not the one who serves as Trustee and is asking for this change. The only other prior loan was an NHCE. I immediately responded that I strongly recommend against it and owner said he just wants to get rid of the option. Reason being he hates the administration dealing with payroll and the recordkeeper.

Employer hates loans and wants to stop offering them. Does he need to wait until all outstanding loans have been paid off, or are those loans fine retaining the loan policy in place at the time of the promissory note?

Interesting - the new firm and one employee are treated as subcontractors to the prior firm.

There is zero shared ownership between old and new firm. Rather than buying out the prior owner, they just started their own company, working at same location as old firm, with prior owner retaining his personal office. David - you're a cynic. Initial communication indicates they have not been paid by the other firm, having been formally terminated, and then hired by new firm a day apart. But I'm going to ask for clarification of that. Not sure what it would mean if they are providing unpaid services, but I'm thinking we wouldn't have to worry about that. Nonetheless, not sure if nondiscrimination testing needs to include both sides.

Owner of a professional services firm retires, or almost. All other employees start up a new firm in the same location, same office and start up a new plan. Turns out former owner/retiree is maintaining his old firm for part time work and still comes to the office. Admin staff still provides services, though currently not clear how much work or if they are getting paid. While reviewing Startup Costs Tax Credit, made me wonder if there is some kind of controlled group issue here, which may affect eligibility for the Tax Credit, as well as nondiscrimination testing, at least.

This is a very uninformed question: When plans are offered 3(21) fiduciary services, are they always set up by default as 404(c) plans? Another uninformed question: Do 3(21) fiduciary services come with a Trust Agreement? Or would this still be prepared by Document provider?

Looking over electronic distribution safe harbor guidelines for H&W plans, I cannot seem to determine if the initial notice regarding electronic disclosure of notices needs to be sent before the first Notice Regarding electronic disclosure along with the first such participant notice, so as to give participants time to opt out. I'm thinking they can be sent together.

Looks to me like original plan doc preparer neglected to check off to exclude union, nonresident aliens and leased employees from a plan doc. Never having seen this, curious if, as part of restatement, such exclusions could be added moving forward. No such employees have been employed per plan sponsor.

okay, so a very naive question - Who calculates the tax free amount? I don't know who has records of this long ago purchase.

Somewhat related question - plan owner and only remaining participant in terminated plan wants to cash out his life insurance policy. Can the funds from the cash out be deposited directly into an IRA, or must it be cashed into the plan, then distributed? Never dealt with a distribution of a life insurance policy in any format before.

Participant terminates and submits full distribution paperwork. Prior to distribution check being written, he is rehired. Is there any reason the check still needs to be written?

Reviewing a just rec'd CP-403 for 2019 when no 5500 filed. Cannot fill in a date for DFVCP since never filed, but plan sponsor has expressed interest (obviously right?) in doing so. I'm thinking it's fine to file 5500 along with DFVCP after the date of the Notice and prior to the required response date.

Plan terminated in 2018. Owner still has assets and continues to file Form 5500. (Life Insurance...) Plan still needs to restate, right?

Curious how others are reporting those covered participants at the end of the year who are furloughed (receiving benefits as per ARPA). Active or terminated?