Belgarath

I believe that possibly the "green book" that he was referring to is Janice Wegesin's 5500 form preparers manual, which was the Holy Grail of 5500 preparation guidance for many of us for years. It had a green cover. Janice sadly passed away recently.

Yes. Assuming that they are not "one-participant" plans eligible for 5500-EZ filing.

I haven't seen a lot of discussion of this issue. That's likely because of at least two reasons: first, in DC plans where most people terminate and take a full distribution on or before NRD, there are thankfully relatively few death distributions, and second, Covid has thrown everything into a tizzy this year. At any rate, recordkeepers are beginning to send out their "default" provisions - so it seems like a good time to think about the subject in more detail. My own preference, from a plan admin point of view, and for most of our clients, is the desire to get such amounts paid out of the plan sooner rather than later. Beneficiaries GENERALLY want the full lump sum amounts ASAP (whether in cash or rolled to an IRA) so I'm really talking about a limited number of situations. Do you plan to allow the full range of allowable distribution options, or restrict it to a lesser time period (for example, the current 5-year limit)?

I've always felt uncomfortable with this approach - that is, the starting a separate plan approach - (I'm a coward at heart when it comes to potential problems with the IRS) in that they might assert a timing problem under 1.401(a) (4)-5. But I can't say I've heard of this happening.

https://www.asppa-net.org/sites/asppa.org/files/PDFs/GAC/ASAPs/11-13.pdf

Thanks Peter. Food for thought! I guess (unless I'm missing something) that there is in fact already a specific rule - coverage/nondiscrimination testing would include such a person, UNLESS there is a specific exception. And I can't find one.

Interesting. Thanks!

Hypothetical question which may turn out to be real - don't know yet if it is 401k plan or ERISA 403(b), but I don't think it matters. Say you have employer A, whose plan has a (pick it - let's say 4 year graded) vesting schedule for matching contributions. (Not a safe harbor plan, by the way.) Let's say that employer A is going to be involved in starting up a new business, that for now at least would NOT be a controlled group. The new business B will have a bunch of employer A's employees transferred to them. Is there a reasonable way to have A's employees who transfer to B, have their vesting in A's plan continue to increase at the normal rate, based on the service with B? Something like: for vesting purposes only, former employees of A who transfer to Employer B will have their years of service with B apply to their account balances in this plan. Or something along those lines. I've never seen this done, but curious if it can be done.

Thank you Brian - this helped a lot!

Does the CARES act provision for changing health insurance coverage mid-year apply to vision or dental insurance? In other words, in a premium only plan, are these coverages considered "health coverage" for this purpose, or does the revocation of existing health health coverage or electing to now be covered, only apply to "health insurance?"

Thanks all.

Question - what have you been getting for asset statements/information in prior years in order to do the administration? Typically the TPA would have this information. It's a starting point. As far as a Successor Trustee being appointed, the plan document should provide specific information on how this is handled, or it may require a court-appointed successor. You need to have the wife contact an ERISA attorney for assistance. As a TPA, chances are you can only help point her in the right direction. Also very important for her to contact the institution where the assets are held (once you tell her where that is) to have her explain the situation, and ask them what THEY need in order to change Trustees, release information, etc., etc. - and make sure she gets in in writing. The ERISA attorney should be able to assist her with this. Other things may occur depending upon specific facts and circumstances.

Assume none of the deferrals are Roth?

No problem - I didn't specify this properly in the OP.

Yes, they can allow multiple investment vendors/advisors. As a practical matter, as most plans grow, they will limit the number to something reasonable. If you have 50 participants and 50 different vendors/advisors, it gets administratively untenable. With 2 or 3 participants, I don't see it as much of an issue. Of course, some vendors are difficult to work with under any circumstances, but that's a separate issue.

USERRA is very clear about the make-up rules, coverage/nondiscrimination/deduction/etc. issues for make-up contributions upon qualified reemployment. What about the year the employee leaves for qualified military service? Example, active participant in a Profit Sharing plan that has a 1,000/last day requirement. Participant leaves for qualified military service in July 2019, having worked 800 hours. So this person does not get an allocation of profit sharing contribution for 2019. I can't find any dispensation for coverage/nondiscrimination testing for the year the individual terminates employment for qualified military service. However, it "feels" wrong to include this person, to the detriment of testing results. Do you include such an individual in the testing, or just toss them out altogether for 2019? My heart says to toss them out, but my head isn't agreeing. Interested in any thoughts you might have. Thanks.

The particular plan that caused this question to be raised is a 501(c)(3), but the many would be private for-profit businesses.

401(k) plan has terminated, (August 15th term date, small plan!) and all assets have been distributed. But the plan is still going to be restated. Here's my question: New pre-approved plans do not include the Trust document - the Trust document is now separate from the plan document. Since all assets have already been distributed, is it really necessary to execute a Trust document? I can't, offhand, think of any reason, other than at some later date a dividend or mutual fund settlement or something is suddenly distributed to the plan. Thoughts? It probably isn't a big deal to get this client to sign the Trust document, but it seems like a waste of time.

Some states are paying certain front-line employees a "grant" or "extra payment" or whatever you might want to call it. This comes from the state/federal funds, and it is run through the employer as TAXABLE wages. The employer doesn't pay this out of their own pocket. Is this considered eligible compensation for deferrals/profit sharing/whatever? The "simple" answer is that the plan in question defines compensation as W-2, so it would seem that as long as this is being reported/taxed on the W-2, it should be eligible compensation for plan purposes. But since nothing is normal this year, I thought I'd see if anyone has different opinions?

I like that solution! Thanks for looking into this!

Ah, I get it. I'd be ok with changing the participant count to remove them, (again, assuming meeting the FAB requirements) but like you, I'm just not sure about the asset accounting. Agree, see if anyone else knows!

Good question. I'd start by asking the auditor. Regardless of what you think, if the auditor insists that they must continue to be reported, then that's your answer for this client. My inclination is that you don't have to continue to report them, if they satisfy the requirements of FAB 2009-02, and 2010-01. But I have no idea what is the most reasonable approach from an asset accounting standpoint. Personally, since the information on these contracts is obviously available, I'd probably continue to report them. But maybe not, if your approach turns out to be reasonable!

Not certain what cross-testing has to do with it. If there are no NHC, and everyone is in their own "group" then the plan automatically passes nondiscrimination and coverage. No gateway, no coverage testing. Just allocate whatever you want to each HC on an allocations basis, and there is no cross testing necessary. Again, I don't know all your specifics, what your current document says or allows, etc. - I'm just speaking in generalities. When you say an actuary sent you over specs, do you mean that there is also a Defined Benefit Plan involved? If so, you need to ask the actuary. Anyway, this is general "discussion" based upon almost no information, so it may be of limited use to you. Good luck.

There isn't enough information here to really answer your question. The immediate question that comes to mind is: When, if ever, will there be any other employees? If there won't be any, there's no reason for any eligibility requirements at all. P.S. - but if you ARE utilizing this provision, due to whatever the facts and circumstances dictate, then I would generally waive the eligibility requirements for anyone employed on 1/3.

Depends upon your document. Many allow the safe harbor contribution to the HCE's to be discretionary - any amount from zero up to the SH amount contributed for the NHCE's. But perhaps I'm misunderstanding your question.