TPApril

The recently e-disclosure rules do not seem to apply to Health & Welfare plans. So providing SPD's, SAR's rely on the old method?

Owner does not want to complete beneficiary form because his spouse is his primary beneficiary and he has completed estate planning that his children are contingent for all accounts. Am I correct that a plan specific form needs to be completed so that the children would be considered contingent, otherwise should spouse predecease or owner & spouse die simultaneously, the plan's benefits will go to the estate rather than to the children?

Very helpful thank you.

I can't say I know what it means to be 'legally separated' as opposed to simply separated or divorced, but can medical benefits be denied to a legally separated spouse?

Lou - keeping me on my toes. Owner of both companies that are both in medical fields. No other employees or owners. Yes a control group, I was thinking you meant with anyone other than the owner.

100% ownership of both, no control group or asg I'm aware of.

Entrepreneur has two separate businesses, no employees. Is he able to sponsor multiple plans on his own behalf, each with their own limits?

Participant (non owner) over RMD Age, on workers comp so not formally terminated, and requests eligible in service distribution. With no distributable event, would part of this distribution be treated as an RMD at time of distribution? If not, say participant formally terminates later in the year but there is no more account balance - in that case send a letter and issue 1099-R for RMD amount?

With main question resolved, related topic, hope you don't mind I post it here. Doctor 'employs' one full time doctor, but pays him as an IC. Doctor wants to start a new 401k plan. Instead of excluding this IC completely, Dr. wants to pay enough W-2 to cover contributions, and the rest to be paid under guise of IC. Not sure yet what to make of this, or whether to count all pay which may or may not make the IC doctor an HCE. Trying to think about the implications...

1. It's my understanding company cannot have both SEP and 401(k) plan in same year (defined for this question as calendar year). If no contribution has been made for current year in the SEP, can it be terminated as of end of last year and the 401(k) plan then started mid year? Or would the 401(k) have to wait until the next year? Understood that the PS plan can start up this year since last SEP contribution was for last year. 2. As we know, under SECURE Act, plans can now be started up prior to tax returns filed the next year. Is there any kind of exception here where an SEP has not been terminated yet, but no contribution has been made for the prior year, so that the PS plan can actually start up and be effective for the prior year? Otherwise, this provision doesn't particularly benefit employers with SEPs.

for clarification I'm talking about ongoing active plans.

Seeing as how SAR's are distributed many months after the end of the plan year, to what extent do Plan Sponsors need to provide the SAR in the following instances: 1 - retirement plan where the terminated vested participant has zeroed out their account since the plan year end. 2 - health and welfare plan COBRA participant who is no longer on COBRA

But the Plan Doc references an employee who incurs a Separation of Service prior to satisfying the eligibiliity requirements. This employee did not.

Of course, 'what does the plan document say' is our version of 'did you restart your phone or reboot your computer'? Doc does not say directly but implies simply enough that eligibility was not met so therefore does not enter plan upon rehire/entry date if later. However seems to imply a switch to measuring service by plan year for a rehire.

Participant works over one year and 1000 hours in that year, but terminates prior to reaching age 21 so never becomes eligible to enter the plan. That former employee is then rehired after age 21. would that employee enter plan immediately?

Employee participated in 2 different company plans and ultimately exceeded 402(g) limit for the prior year. Excess deferral was distributed prior to 4/15 of the next year. Are there one or two 1099-R's reported? If there is one, I believe it is in year of distribution with Code P (referring to prior year). If there are two, in addition to the one above, one for the prior year with Code 8? Alternatively, is the W-2 corrected? Or as I believe, there is just one 1099-R issued for current year and in this case, employee provides tax preparer with letter describing the excess deferral distribution.

For clarification regarding issuing 1099-R for excess deferrals - is this correct for an excess deferral that is paid by 4-15: There is only one 1099-R issued for the actual excess deferral amount - it is for the year of payment, and code P indicates it is taxable for the prior year. So at the time of preparing that prior year's taxes, there is no 1099-R yet. (note this post does not inquire about related earnings and its own 1099-R). One more question - in this instance is the W-2 corrected?

So the participant does not actually receive a 1099-R until long after taxes have been filed. They just provide the information to the tax preparer? Does the IRS ever end up flagging such tax returns because the taxable amounts don't match what has been provided?

Excess deferrals due to 402(g) limit are paid out by 4/15. Question is the 1099-R with Code P generated for the prior year in which it is taxable, or for the current year it is distributed, even though it is taxable in prior year?

For clarification on excess deferral distributions prior to 4/15 - the 1099-R is issued for the year the excess deferral is distributed, or the prior year when it is taxed? if it is issued for the year of distribution, then what documentation do they bring the tax preparer for the prior year when it is taxed if they have no formal document?

This post is exclusive of anything related to CARES Act. I feel like I saw some headlines going back to 2019 indicating that loan payment rules were being relaxed, such as longer periods to either pay back to the plan or roll the amount into an IRA, or pay by check once terminated into the plan, but perhaps I dreamed it? Just curious, has anything to that effect been enacted?

Figured this out. I know they why, just not the reason. For plan years filed 2018 or earlier, they are using current plan year form (2020) but for whatever reason, because of this they simply won't show up on efast2. Yes there is an ACKID.

To respond to the helpful postings above: Plan Sponsor filed electronically himself using one of the 5500 vendors (not efast2) Plan is a fully insured welfare benefit plan so there is definitely no confidential information, there is no attachment, and no audit. Efast2 usually reflects filings immediately as I'm quick to check I've seen multiple of the situations listed in the past, original and amended are shown or just the amended shown, but I've never seen neither one shown, which is why I posted this inquiry

Plan Sponsor just amended a prior year 5500. The efast2 search now does not show any 5500 for that year - original or amended. Just curious if this is standard, or if something might have gone wrong with filing?

cross-tested plan with individual rate groups requires 1000 hours and last day for contribution. With the individual rate group classification, is it fine to allocate employer contribution (above and beyond top heavy and gateway minimums) to someone who did not make 1000 hrs but still employed on last day? This is a situation of a generous business owner who does not want to leave a part-timer out of the PS contribution.