TPApril

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?

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?