pmacduff

Thought I would post an update.... still haven't received a call back [as I think we all anticipated ] However I did file the form with the "new" plan name and have now looked at the filing online (without signing into EFAST with my login) and the filing is there and looks fine. I realize that doesn't mean the employer might not yet get a letter but hopefully it's all set!

There is another difference though, Tom, in the part of the IRS response back in 1999 (paraphrasing) 'forfeit the deferrals and match and make the employee whole outside of the Plan'. I don't see that as a better method than giving the $$ directly back to the participant from the plan account. What if the Sponsor never made the participant whole outside the Plan? Anyway - love the take BG - I would agree it IS an excess allocation of deferrals and should be handled as such.

Thank you Tom. I found the attached from 2013. So using a return of deferrals as a possible correction method seems reasonable if the participant has sufficient funds. Suspension correction.pdf

ok - I have the code section about stopping deferral contributions for 6 months after a hardship withdrawal (Reg. 1.401(k)-1(d)(3)(iv)(E)(2)). A plan fails to stop contributions for one participant who has taken a hardship withdrawal. Can I assume one correction would be to return those contributions to the participant? Is there information for self-correction of this error? I went through the 401(k) Fix-It guide as well as the SCP info on the IRS site but could not find this situation. (The hardship related errors & corrections that I found were more for allowing hardships when not stated in the Plan.) thank you in advance.

I have a submission to EFAST where only the plan name changed. When I got the same error as Santo (Z-003) I called EFAST and was also referred to the instructions where he said it basically says you can't change the Plan name. So I said to the guy, "You're telling me that you can NEVER change the name of a Plan?!" He asked me to wait, put me on hold and said he would call the DOL and connect me to someone. After a short (5 minute or so) wait he came back on the line and said he couldn't connect with anyone but had left a message on the voice mail with my information and that someone form the DOL would contact me. I'll let you know if I get a call back......

Thank you for the responses. My original post should have said "vest everyone still actively employed on the sale date" as Lou said. Believe it or not there is only one participant (who termed back in 2006) that never took his balance out and is not fully vested. They don't want to vest him now. Lou's verbage is exactly what the client wants to do; i.e. vest those actively employed on the sale date (in addition to those vesting due to the partial termination). Thanks again!

ok - Company sold a division that included the majority of the employees/participants. It is a partial termination for the plan due to the number of participants involved. The company will continue to maintain the plan for those remaining. The owners/Trustees/ PA understand that the participants who are moving to the new company will become 100% vested due to the partial termination. They have no issue with that. However they would like to vest everyone 100% as of the date of the sale, including those staying, and then going forward anyone hired after that would be on the 2/20 vesting schedule. Is this possible? Does anyone see issues with this? All of those involved are NHCE employees.

Thanks My 2 - my inclination was to put them on there. This plan has a very particular accounting firm that does the annual audit for the Schedule H and I wanted to be sure I was putting the information in all the correct places. I suppose more reporting is better than less reporting.

Ok - I know this has more than likely been asked/answered but I haven't found the thread(s)... TPA direct compensation is reported on both the Schedule H and the Schedule A. Does that also need to be reported on the Schedule C if it is over $5,000? I thought not at first but rereading the instructions for Schedule C it states in part, "Persons whose only compensation in relation to the plan consists of insurance fees or commissions listed in a Schedule A filed for the plan" do not have to be reported again on Sch C. I think I'm getting tripped up because these are admin fees and not "insurance fees or commissions". Thanks in advance for any comments....

thank you for all the replies. I see I wasn't specific in my OP. The participant is not in a homeless shelter but rather temporarily in a shelter after leaving an abusive relationship. Not that it changes the circumstance - still homeless (albeit temporarily). Belgarath's suggestion would work of course but I'm not sure they want to amend the hardship provsions.

ok - here is a situation I cannot believe I have not previously encountered: Participant requests a hardship withdrawal because they are living in a shelter and want to move into an apartment. It obviously doesn't fall under the "prevention of eviction or foreclosure" but what about "purchase of primary residence"? How loosely could/should the Plan Administrator interpret "purchase"?

401(k) with 3% nonelective that goes to everyone and cross tested profit share allocation. profit share has last day rule but those receiving the 3% SHNEC would normally be bumped up to the gateway if necessary. The employer is not putting in a substantial profit share for 2015 and as a result everyone (HCE and NHCE) is getting the same allocation percentage. Therefore It won't be necessary to perform nondiscrimination testing. Since each person ends up with the same percentage can those who termed but received SHNEC be excluded from the profit share as they would, for example, under a comp to comp profit share allocation, as long as coverage passes? This seems as though the answer should be obvious but am in a busy season fog.....

ok - I have a termed participant in a cross tested plan that does not have a last day rule but does have 1000 hour rule for profit share. Participant termed with 31 hours. They are receiving the 3% SH non elective. Per Tom's post I don't have to bump participant up to the gateway if I test the otherwise excludables separately and there are no HCEs in the otherwise excludable group? thanks in advance.... Edit to scratch this post - this participant was active until 2015 when she termed so she isn't in the "otherwise excludable" group. She needs to get the bump up to the gateway.

ok so a plan has the auto enroll feature with the 90 day opt out. Those participants who opted out within 90 days were given a return of deferrals and the match was forfeited. The contributions will show on the employees' W-2 forms and they received a refund of contributions and a 1099-R form. End of the year arrives and ADP/ACP testing performed. Do the contributions for the auto enroll opt outs need to be excluded from the testing? ok - found my own answer...just tired I guess!! The contributions are excluded from the testing. The participant IS included at a 0% rate, however.

Tom - you may have missed it becasue you are busy as well but I did mention in the OP that the plan is not top heavy because I knew if he was getting a top heavy I would bump him up to the gateway. But since no top heavy, I wanted to be sure that he doesn't get a regular contribution. thanks to all!!

too early in the year to be confused and yet I am. hmmmm... anyway - I have a cross-tested profit sharing allocation formula. allocation conditions for active participants are 1000 hours, last day rule. If termed due to death, early retirement, retirement or total and perm. disability then hours/last day requirements waived for allocation. Plan is not top heavy. Participant termed in 2012 under the early retirement provions - was over 55 and had 10+ YOS. Participant received an allocation in the year of early retirement. Same participant rehired 11/23/2015. Active on rehire. Participant had 243 hours in 2015 and was employed on the last day. Is participant excluded from the profit share allocation or no? appreciate any feedback....

My Dad passed away just shy of 62 after drawing total and perm. disability for 4 years. My Mom, who was 59 when my Dad passed, continued working another 3 years until 62. When she retired my Dad's benefit was higher so they put her under a widow's benefit with his amount. Lo and behold 8 years later when Mom was 70 the Soc Security Administration contacted her and told her that she should now change and draw her own benefit as the amount at age 70 had surpassed what she was receiving as my Dad's benefit. I was astounded! At first contact from the SSA my Mom thought it was a mistake because she was already drawing. She checked with us kids to sort it out and we helped her apply for her benefit. She had been prepared to tell SSA they had made an error and/or ignore the correspondence from them. Got me to thinking how many people don't know that they may be in this same situation and perhaps ignore the letter for the same reason my Mom was prepared to ignore it!!

ok - I found this on the IRS website under the "5500 Corner" scroll down to 5500-EZ... Attached is the form they reference that does have a phone number in the header. Here is the link: https://www.irs.gov/Retirement-Plans/Form-5500-Corner hope this is helpful

I found an old thread from August 2004 that states that the effective date of a Plan must be an entry date by law. the thread cites 410(a) regarding entry dates. I'm not versed in how to link to the old post, but it was posted under 401(k) plans and started by mk2308. hope this is helpful.....

I had this same situation. Ultimately found out in this case (where the spouse was named beneficiary anyway) the 1099-R for the loan offset would be done in the participant's name because payout to beneficiary spouse was happening in the year of death. Didn't really matter, though in my case because surviving spouse and decedent filed a joint return for the year of death. The most important thing in the situation I had was whether or not the 10% penalty was going to apply because both participant and spouse were under 59 1/2. Turns out the 10% does not apply to the outstanding loan balance that was offset. I'm not sure what would happen if the estate was the named beneficiary with spousal consent but would assume then that the loan 1099-R would be done to the estate.

fwiw - the info on the ASPPA website for the quizzes will tell if/when a quiz qualifies for ethics credits. the exams are $50 now but you normally get 3 CE credits. however if I recall, the ethics exam I took was specifically only 2 credits but was still $50 & 10 questions

I hear a Tom Poje song in there somewhere Austin... (to the tune of You Are My Sunshine) "....please don't take my ER PA away." Seriously though - other than the reasons given in the first FAQ does anyone see an ulterior motive(s) for this move?

I'm sure this has happened but I'm not finding any threads. Safe harbor nonelective 3% 401(k) plan - individual accounts - newly eligible participant is refusing to complete an enrollment form. What would others do? Set the participant up in a target fund based on his DOB? I'm always amazed at people who don't want "free" money

ok - my thinking was in line. good call on TH. There are NHCEs with balances that have just stopped contributing. Plan hasn't been TH but I will keep close watch going forward.

client uses prior year testing. one owner over age 50. testing will pass for 2015 based on lower group average from 2014. no one is contributing in the lower group for 2015. So....can the owner contribute the catchup of $6,000 next year (2016) with the lower group average at 0% for 2015? I know this should be easy but believe I am overthinking it....