Belgarath

Is the person getting referrals because of this work? An official thanks and/or recommendation in the organization's newsletter to members, etc? I have no idea if these things might be considered "indirect" compensation - that's a matter for counsel. It seems like a stretch to me, but the DOL is not noteworthy for being reasonable. And the firms that specialize in going after plans/fiduciaries are pretty creative...

Be safe!

Luke - yes, your assumption was correct.

Thanks Luke.

Just curious if you had ever encountered this. Non-Profit plan that otherwise would qualify for non-ERISA status, utilized (unintentionally, apparently) an ERISA 403(b) document. Has never filed 5500 forms. Obviously can use DFVCP program, so costs are not onerous. I see no option. By executing an ERISA document, it seems to me that they have elected ERISA status, and they can't say it is "non-ERISA" just because they would otherwise qualify for non-ERISA status. Any other opinions?

I think a bit of common sense needs to be used, but other than an egregious situation, I see no problem with it. Yes, for example, if you amend the plan to allow loans, one or more HCE's take a loan, then you amend it back out a week later, that's likely a problem. But in general, assuming the loans are available on a reasonably equivalent basis, and both current and effective availability are satisfied, the fact that no NHCE's choose to take a loan does not prevent the plan from amending the loan provision out of the plan. I've seen very few plans that were structured such that removing a loan provision presents a problem.

Did she have a named beneficiary or beneficiaries? If not, what does the plan language have for a hierarchy of beneficiaries if no one is named? IMHO, you have to follow through that process.

Ok, got it. Obvious brain cramps yesterday. Thanks to you both.

Thanks Lou. Yeah, I know RMD's are not eligible for rollover. The assertion was made that since the conversion is taxable, the taxable amount would represent a "distribution" from the plan. I know this is wrong - but this is the piece I'm trying to "prove" - that it is not, in fact, a distribution from the plan for 401(a) purposes.

I've been driving myself crazy on this. Question came up as to whether an in-plan Roth conversion/rollover could satisfy the RMD requirements. I know it can't, but I'm having a devil of a time finding "proof" - and I'm sure it is staring me in the face! I recalled that there was guidance a long time ago where it said that for 401(a) purposes, an in-plan rollover was not a "distribution." So I looked back at IRS Notice 2010-84, etc., etc., and while I found SOME of what I was looking for, I couldn't find anything that confirmed this head-on - (or possibly my eyes scanned over it). Anyone recall the citation for this? There's ample IRS verbiage out there that addresses this in an IRA context, but seems to be a dearth of similar IRS publications answering this same question for designated Roth accounts. Shoulda stayed in bed this morning...

An interesting argument, but I wouldn't want to defend that position!

Wow, that opens up a big can of hurt!

The SIMPLE special rules for mergers/transactions, etc. are found in IRC 408(p)(10).

Some insurance companies, who actually know what they are doing when it comes to issuing insurance policies in qualified plans, can easily provide this information. Some other insurance companies are absolutely useless in this regard. Hopefully you get one of the good ones...

We take EBP's approach - we just send them for all clients. Otherwise too easy to miss notices in a situation that requires them, and this way we don't have to think about it! Participants are "noticed" and "disclosured" to death already with stuff they don't read - what's one more thing to recycle, right?

Nope, non-profits can have them too.

The standard beneficiary instruction form says, "NOTE: if you name a trust as beneficiary, you must also provide additional information to the Administrator. The Administrator will notify you as to what additional information is needed." The standard designation of beneficiary form itself says, "Trust beneficiary. If you name a trust as beneficiary, the trustee must satisfy additional documentation requirements no later than October 31 of the calendar year following the calendar year of your death. The Administrator will provide you or the trustee with the additional forms you must complete." (My emphasis) Now, spousal consent, if applicable, would require an additional form. The Administrator would need a copy of the Trust. What else might be required, other than the Trust and spousal consent mentioned above - and for RMD purposes, you have the requirements that the Trust must be irrevocable, must be valid under state law, beneficiaries must be identifiable under the trust, and Plan Administrator needs either a copy of the trust, or a certified list of beneficiaries under the trust. Do you normally direct all this to the Plan Sponsor's attorney do determine what "additional forms" might be needed, if any? I'm a little foggy here.

That's beautiful!!!

shERPA - the cynic in me says the IRS will say that such publications can't be relied on as official guidance, and they will stick it to you anyway!

Thanks Cuse. FYI, the valuation is EOY, so the EOY 2020 valuation was done based on calendar year 2019 census data. Clearly an operational violation of the terms of the document. But as I said, less concerned with that for the moment than trying to get things clean going forward...

Looking at a takeover plan here, and something seems so strange that I'm questioning if there really is a problem, or if I'm cracked for thinking there is! Plan document specifies plan year is calendar year. Fiscal year is 4/1 - 3/31. Compensation period selected in the document is plan year (calendar). Prior TPA (and probably in conjunction with CPA, I don't know) has been doing things as follows - we'll use the 2020 plan year valuation to illustrate, and same procedure was followed for prior years as well. 2020 valuation was based on PLAN year (calendar) compensation and hours for 2019. The 2020 valuation was run in December of 2020, (based on 2019 calendar year compensation/census) so client could deduct 2020 plan year valuation on their 3/31/2020 fiscal year tax return. Ignoring for the moment correcting the past operational violations, what might you think is the best way forward? The plan year could be amended to coincide with the fiscal year - run a short plan year for 1/1/2022 - 3/31/2022, then full year thereafter. It seems to me that this is the cleanest way forward, although they could also, for example, amend the plan to use the fiscal year ending in the plan year as the compensation period. Am I nuts?

Great, thanks.

If A & B are the Trustees of a plan, and the plan is restated naming C & D as Trustees, does that have the legal effect of removing A & B as Trustees? Or is a separate formal removal required? I don't see that the document directly addresses this issue.

Depends upon your document. Most of them that I see now allow the match for Highly Compensated Employees to be discretionary. If so, no worries.

I agree with ESOP. The plan must permit it. That was my assumption on the initial response, but that assumption may have been incorrect.