TPApril

Peter, Luka - thanks. I'm new to this plan, looking at it more closely, I see that there is actually a pooled account and participants who don't make an election just have their contribution put in there. I kinda feel like this plan should not have been set up as a 404(c) plan to begin with, just a plan that allows self directed brokerage accounts. Besides that I'll be checking to make sure that all participants have had the chance to open a brokerage account, I'm thinking to just remove the 404(c) indication in the restatement.

okay, I cannot believe I typed HCE and NHCE instead of Key and Nonkey when I know better. This is not an odd top heavy/HCE provision, it is a standard provision of trying to change it from allocating the top heavy minimum to both Key and Non Key to only Non Key during the plan year. I think it's a yes.

Has anyone ever had a client literally sign off that they will not hold your firm responsible for their plan errors/issues/etc.?

There is no default investment alternative whatsoever. It's a small plan so new participants don't come along on an annual basis. Also, there is a profit sharing contribution set up.

There is no default investment alternative whatsoever. It's a small plan so new participants don't come along on an annual basis.

I guess I never saw this situation before - All participants have self directed brokerage accounts. Plan is set up as a 404(c) plan. There is no QDIA. I thought 404(c) plans had to have a qdia.

I agree wholeheartedly with you Bill, and while we have recommended seeking an attorney's advice on multiple issues, and we are continuing to do so, this Plan Sponsor simply won't spend the money.

Plan sponsor has finally agreed to correct a plan by depositing long overdue safe harbor contributions (w/earnings). They would like to terminate the plan, but they do not want to do the following: Submit a formal VCP correction Restate their plan document I cannot stress enough, getting this deposit made is a tremendous achievement that we celebrated with jellybeans in the office. I know we are not the only ones with awful clients. I also know the standard recommendation is to 'fire the client', but that frustrates me because that doesn't really solve the problems. That being said, I'm just looking for thoughts on helping them terminate the plan under those conditions, aside from incredibly caveated letter at what their risks are going to be.

Peter - you would think so, but this question has to do with a couple of deadbeat plan sponsors of very small plans who need to be begged and cajoled simply to sign their 5500. Annual fees as it is exceed any earnings within the plans. The goal is to ease their way out of their plan. Any such plan termination would indicate such outstanding issues as the unfulfilled restatement.

I understand a plan is not required to restate if it terminates prior to 7/31/22, albeit it must be fully up to date, including at this time the Hardship and SECURE amendments. That being said, if a plan does terminate but does not yet distribute assets in full by 7/31/22, would there be any qualification issue? I'm thinking it's okay but wanted to throw that out.

Prior Plan Doc states that both HCE and NHCE will receive top heavy minimum. Any reason it cannot be removed for HCE for new restatement? Assuming yes, with last day required, any reason it would be treated as accrued? In other words I believe it can be removed for current plan year without removing an earned benefit by the HCE. Edit after receiving several responses below: I should have typed Key and Non Key above instead of HCE and NHCE.

CuseFan - are you saying that when counting hours included towards a vacation payout, you would only include those hours that were accrued during the current year?

Do employers generally track hours separately from pay, ie W-2 pay? So W-2 reports pay for pay date 12/31 of the prior year, paid on 1/5. Employee had 970 actual hours worked in the current year, but when hours are reported alongside payroll, there were 1010 hours worked. Say the 12/31 hours reported on the 1/5 payroll are not included, but the terminee has 40 hours of vacation pay. In both those situations, what do companies generally do, count the hours?

Luke - thank you but that's not it. Just curious if there has been a trend for employers to ask all new employees for marriage certificates.

My understanding is that in years past HR departments would not ask for Marriage Certificates. When Marriage Equality became legal, some departments started to ask only same-sex couples for their Marriage Certificates, which ultimately was determined to be discriminatory and not a recommended practice. Any thoughts if HR departments are now asking for Marriage Certificates from all new hires these days? This would be mostly related to setting up their medical benefits with spouse coverage included.

That would be a great idea Peter Gulia.

There are 5 Participants in Plan - Owner, her husband, their 3 over 21 and not disabled children. Both Owner and husband began taking RMD's. Owner dies in 2018, after RBD. Her husband is taking RMD's of her account. Husband dies in 2022, also after RBD. The 3 children are the beneficiaries for both accounts. Looking to confirm what I think the new rules are: Owner: 2022 - Paid as intended based on subtracting 1 from 2021 RMD factor used 2023 on - Must be paid by 12/31/32 to 3 children, using life expectancy of oldest son, then subtract 1 each year, w/bulk being the RMD for 2023 Husband: 2022 - Paid based on his age in 2022 using new table 2023 on - actually the same as for the Owner above

Shot in the Dark - have you ever put this into action, or seen it used? Not sure why ftw offers this as an option, I'm not convinced that you can not give an NE allocation to someone who is employed on and terminates on the last day.

Haven't seen this before. Fidelity bond coverage is lower than 10% needed, set at $20,000, but according to the agent, has a built in 'inflation guard' up to $500,000. Assuming that is fine, what would we report on the 5500? In this case $500,000 is greater than plan assets even.

I'm with you ESOP Guy, I don't get it. After many years, this is the first time I've seen this feature, though I've certainly learned not to be surprised.

I guess we've always treated someone who terminates on 12/31 as being included under 'last day worked' requirements and therefor eligible for the NE contribution.

Plan has a last day worked requirement in order to receive nonelective contributions. However, participants that terminate employment on 12/31 (cal yr plan) are not eligible. Never seen this, what is the justification? Do plan specs state clearly, must be active employee on last day of the plan year?

Affiliated Service Group question: Attorney with his own LLP and his own retirement plan, moves into a new law firm's offices, and his name is put onto the firm's website. He has access to the Admin staff. Law firm however treats him as an independent contractor instead of W-2 employee. Law firm does not intend to give him retirement benefits. I just get so dizzy from these controlled group concepts. Not sure if he needs to be included in nondiscrimination/coverage testing with the existing law firm's retirement plan (after the first year as Otherwise Excludable).

Plan has two trustees. One of them has retired and is simply no longer involved or around. There is no board for this small company. Can plan be amended to only the one remaining trustee by this one remaining trustee and not involve the outgoing one?

Welfare Plan has reached 100 participants so it's time to file the very first 5500. Apparently their existing plan document shows a 6/30 plan year end, but their policies are calendar year. They'd like to change the plan year and create a short plan year for the last year (ie today is 4/20/22 and they would like a short plan year 7/1/21-12/31/21). I think it's too late to retroactively (and easily) amend for that short plan year. But curious of other's opinions in the following two scenarios, if it can be done: 7/1/21 count < 100 so no 5500 required for a short 6-month plan year 7/1/21 count > 100 so a 5500 would be required at 12/31/21 (not yet due)