TPApril

HCE terminates 3/31 of a calendar plan year. The plan itself does not terminate or have a short plan year. HCE earns $300,000 for that plan year. For purposes of benefit calculations, for 2021 for example, would the comp be limited to $290,000, or $290,000/4= $72,500?

We're gonna go ahead and do two Schedule A's - one for each period.

Curious how others would file this: H&W Plan Year is calendar year. One benefit is on a 1/31 policy year. They then have a short plan year that ends on 12/31. So two policy years end within the same plan year So there are 23 months then to report on the 5500. Schedule A's only allow for up to 12 months. Report two Schedule A's for the same policy number, use the first one only, use the last one only?

Owner only plan's spouse has terminated employment so is now a terminated vested participant. Is it common in this situation to remove the spouse as the second trustee on the plan?

So I'm thinking a best practice on behalf of the plan nonetheless might be to ask for the detailed expense from the funeral home and then add on 20% for the mandatory withholding. The Plan would need to be consistent with such requests for other hardship withdrawals.

First time dealing with a hardship for funeral expenses. Question - child of deceased is asking for the distribution prior to the funeral with an estimated cost of $10,000. I'm thinking they need to provide documentation of estimated costs by funeral home and bring that in. They want a cushion. What do other people do?

Every company I'm aware of allows employees to participate in their Health FSA at the same time they become eligible for their medical plan. Apparently, there is a company that only allows participation in the FSA effective at the start of the enrollment period after being hired, ie anyone hired in current plan year can enter the Medical plan (if eligible) but their FSA start date is 1/1 of next year. Is there any reason this is not allowed?

never had a spouse of an owner only (and spouse) plan terminate before. No idea if 8955-SSA required in this case.

CuseFan - no not asked to do that. Interestingly, they have switched it up and asked to go 1/3 each year up to 3 years - ie 33%, 66%, 100%.

I have just been asked to set up 3-year cliff vesting but interestingly don't seem to have other plans with such a schedule. I feel like I recall a recent law that 3-year cliff was no longer allowed? Was that for DB plans only? I understand it doesn't work for top heavy plans but plan in question is not top heavy.

Revisiting ARPA and COBRA subsidy, have the plans been amended? Would the amendment happen at the Cafeteria Plan level?

you got it, and thanks Lou for that reminder about the company A employees.

Basic structure - One corporation with limited staff owns two entities, each with their own EIN. Neither entity has ownership in the other. The two entities want to set up a common PS plan, but they want one of the two entities to sponsor rather than the common owner. Trying to figure out if this is a Single Employer or Multiple Employer plan?

No need to add auto enrollment.

Reason is for potential grandfathering of plans adopted prior to 1/1/22 in proposed bill in Washington.

Plan wants to start 1/1 of the next year (1/1/22) for both 401k and PS. With the plan being adopted prior to 1/1, is there a reason the plan cannot make the PS effective the prior year (1/1/21) even though there is currently no intent to make such a contribution. What if they have an existing SEP in current year and made the plan effective 1/1/21, would there still be an issue with no contributions for the plan year to the PS?

Thanks - there's no business or contractual relationship between them, just they have completely different roles within a certain industry and so they encounter each other.

I don't think there's a conflict of interest issue here, but just curious for anyone's thoughts - Turns out that my spouse knows professionally a business owner that has been referred to me. Is that something that would typically be disclosed up front?

MP Plan, so 'individual rate groups' are not currently an option, nor do they seem to be an option in the current restatements. So plan uses 'Defined Groups' wherein all regular staff receive the same percent contribution. Owners, HCE's and other senior positions receive different defined percents which are defined by group. Question - aside from what the regular staff receives, does the SPD need to disclose what percent the owners and other groups receive? I think no, but curious for another opinion. Furthermore, can a Defined Group be an individual person, in the way 'individual rate groups' are? Reason for the question - there is one defined group that the ER is hiring a new employee in, but they would like to grant that person a higher percent than the other person currently in that defined group, but they have the same public title.

Getting back to you, somewhat belatedly. Upon review, I feel like the H&W safe harbor is actually easier than the updated retirement plan electronic distribution regulations.

I'm outta breath from running... What happens to a troubled plan when there is no TPA to take them on?

401(k) Plan is in awful shape, so owner, whose business is in just as bad shape, has asked to terminate it. As far as I can tell he is simply not going to resolve everything and just wants to give the participants whatever balance they can. He also has no intent of paying fees related to VCP and VFCP corrections. So I've basically been asked for help so that participants can get balances paid out. I know the typical response is run, run for your life but I've never believed that is truly a solution, nor does that benefit the non-owner participants. Apparently, he has not paid at least 2 years worth of safe harbor contributions. This is a pooled account and the owner has proposed the following: He has no intent of making those safe harbor contributions, but he would be willing to give equivalent balances (contributions + lost earnings) out of his account balance to help make those participants 'whole'. I"m just curious of any thoughts about this.

Alas - not following the rules and getting the fidelity bond late, or not following the rules and reporting it even though it was not effective at the date of the 5500? I know, obviously both.....

I'm curious when most new (small) plans tend to acquire their first fidelity bond and how that affects reporting on Form 5500-SF. New plan didn't manage to purchase their bond during first year plan in effect (2020), and only purchased upon review in early 2021. My approach is to report no fidelity bond on 5500-SF but just wondering if it's legitimate to report the bond since it's in effect at time of filing 5500-SF, even though not in effect during that plan year.

As of 1/1, a company changes its name and as well as the plan's name. FIling 5500 for the prior 12/31 pye before such changes take effect. I'm thinking 5500 is filed with original plan name, but with new plan sponsor name. Then the following year the plan name is updated on the 5500. I could be off base here.