Belgarath

What Kevin said!! We have a few "legacy" plans that still use it, and it is a nightmare for compliance, particularly since the clients who tend to use it also tend to be less than stellar in the human resources arena...

I dunno. I was probably thinking about the correction for failure to implement an employee election, etc., where determining an ADP/ACP test failure in addition to the missed implementation, the plan could rely on a test performed with respect to those employees not impacted by the failure, and disregard those who do require the make-up contribution. P.S. - finally found what I was looking for which of course agrees with you - RP 2019-19, Section 6.06, .02(2)(d). Gotta fix a 401(a)(4) failure if created as a result of the correction.

Monday brain cramp. Suppose you have a DC plan utilizing cross testing. The rate groups either pass the ratio test, or the plan passes the ABT test. Fast forward a year, and it is discovered that census data was incorrect, and a participant or participants were improperly excluded. So the employer has to do make-up contributions, matches, whatever. Do you have to go back and re-run the nondiscrimination testing taking into account the corrections? I don't think you do, but I'm not putting my finger on the guidance to back that up. Thanks.

I'm not familiar with these - (other than hearing them advertised on the radio) - blurb from IRS included in link. Are these expenses allowable as "premiums" under a cafeteria plan? If not, can the expenses be considered an allowable expense under a Health FSA? https://apps.irs.gov/app/IPAR/resources/help/acamnstry.html

In addition to 5500 filings, the plan document must be constantly updated as required by the IRS in order to retain qualified status. Have you done so? If not, I recommend you consider hiring a local TPA to assist you with the IRS filing under Revenue Procedure 2019-19, or the updated version is it is updated. This isn't an issue to be taken lightly. As to the advisability of keeping the plan "open" - this isn't something that can be answered here - it requires full knowledge of your specific situation, circumstances, and wants/needs, as well as your tolerance for expense to keep you out of further trouble maintaining this plan. I can't recommend strongly enough that you engage the services of a good local TPA. I've seen so many disasters on these damned "solo 401(k)" accounts that's it is almost hard to believe. They are almost always set up through a financial advisor/brokerage house, and they rarely receive the attention and oversight they need. Of course, maybe I shouldn't complain, because we've charged a whole lot of fees over the years cleaning up the messes, but I do hate to see folks get stuck in these situations, when they could have been so easily avoided. Good luck.

You aren't going to be able to exclude the employee. The minimum participation test under IRC 401(a)(26) would fail. First, see a local TPA/Actuary to go over your options. They will be able to suggest what works best for your situation. Perhaps you could give this employee a minimal benefit. Or put in a 401(k) plan - you CAN exclude the HC employee from receiving any employer contributions in this.

Agreed, and trying to remember ancient history, I thought the S/E did not get to recover the TTC. It has thankfully been a long time since I had to deal with life insurance in a plan.

Carefully avoiding any indication of taking one side or the other, (as emotions run high) this is anything but a "trial" - it is merely a farce. The only good thing about it is that while Congress is wasting taxpayer dollars, they are not engaged in wasting far more taxpayer dollars on a plethora of bad ideas.

No way to cure it that I know of. If there is, I'd love to hear about it!

If you have access to the EOB, the 2018 version (the 2019 is in the other room, and I'm too lazy to go get it) has a discussion of this issue starting on page 15.788.

"(3) You have represented in writing or by electronic medium that you have insufficient cash or other liquid assets to satisfy the financial need." But the Plan Administrator is still required to be supplied with documentation of the financial need, correct? (Unless they are willing to rely on the participant having and retaining the pertinent documents - good luck with that...) - what are folks doing with this?

There will have to be some relief issued for such situations. It is simply not possible for plan sponsors to modify all their programs, administrative procedures, etc., for a piece of legislation passed with little warning like this. The plan sponsor obviously reasonably complied as soon as possible based upon what you say. I would be very inclined to ignore reporting it as a taxable distribution, but I'll be interested to see what others think. And tax/legal counsel should be used before a decision to ignore is made.

Agree.

"Why would employees opt out of a free (to them) benefit?" Well, it ain't necessarily "free" as there is generally current income that must be declared on the taxable term cost. Particularly at older ages, this can be substantial, depending upon your definition of "substantial." Avoiding the general insurance vs. no insurance debate, I'll just observe that some participants do not want to pay the taxable term cost, as they either don't want insurance, have sufficient insurance (by their reckoning) outside of the plan, etc. - so there are valid reasons for a participant not to want insurance in a DB plan.

I had added an edit to my response, but evidently I hit a wrong button or something before "accepting" the edit. While I can''t remember the exact wording, it was something to the effect of, if you WANT to deduct , see Larry's comments. But not all insurance companies necessarily have such a procedure or are willing to help out on this.

Many documents have language that can help you out in such a situation. FIS, for example (my emphasis): "Regardless of the definition of Compensation selected in the Adoption Agreement, the Administrator may adopt a uniform policy for purposes of determining the amount of a Participant's Elective Deferrals of excluding "non-cash Compensation." For purposes of this Section, "non-cash Compensation" means tips, fringe benefits, and other items of Compensation not regularly paid in cash or cash equivalents, or for which the Employer does not or may not have the ability to withhold Elective Deferrals in cash for the purpose of transmitting the Elective Deferrals to the Plan pursuant to the Participant's Salary Deferral Agreement. Additionally, the Employer may, on a uniform and nondiscriminatory basis, permit different salary deferral elections for different items of Compensation (e.g., a separate salary deferral election for bonuses), and may exclude for purposes of calculating Elective Deferrals one or more items of irregular pay (e.g., car allowance)."

Deleted.

Taking a poll here. Or maybe a survey. Do you prepare these for your retirement plan clients? If not, do you notify them that it is required when there's a change that would require it? In your opinion, is this (or should it be) the job of the TPA, or the CPA, etc.?

I dunno. Possibly system/programming/procedural changes that they don't want to deal with? Delaying getting people paid out and possibly off the books? Just guessing. I'd expect most clients would want the delay, since the largest RMD's are usually the >5%owners...

Thanks. I just wanted to make sure that nothing had changed. We told the client to contact their payroll company. Payroll company never did this before this year, so it appears just to be an error.

Document is a fairly standard document. It includes "Wages, tips, and other compensation on Form W-2." I

I want to make sure I'm not crazy. 409A DEFERRED income is not included in W-2 compensation for 401(k) plan purposes, right? We've got a payroll company including these deferred wages as eligible income. I could understand it if the employee was receiving taxable PAYMENTS of 409A amounts previously deferred, but this makes no sense at all for income currently being deferred. Agree/disagree? Thanks.

You can start here, but are you sure it was done under that name? Or perhaps some other name instead. A quick look through, I didn't see any starting with "Legg Mason..." https://www.irs.gov/retirement-plans/list-of-preapproved-plans

Agree. H. R. 1865—562 signatory operator or a related person to a signatory operator (as those terms are defined in section 9701(c) of the Internal Revenue Code of 1986).’’. SEC. 104. REDUCTION IN MINIMUM AGE FOR ALLOWABLE IN-SERVICE DISTRIBUTIONS. (a) IN GENERAL.—Section 401(a)(36) of the Internal Revenue Code of 1986 is amended by striking ‘‘age 62’’ and inserting ‘‘age 591⁄2’’. (b) APPLICATION TO GOVERNMENTAL SECTION 457(b) PLANS.— Clause (i) of section 457(d)(1)(A) of the Internal Revenue Code of 1986 is amended by inserting ‘‘(in the case of a plan maintained by an employer described in subsection (e)(1)(A), age 591⁄2)’’ before the comma at the end. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to plan years beginning after December 31, 2019.

Say you have an employer with less than 50 employees - they have no intention of ever having 50 employees. Their cafeteria plan offers an opt-out benefit for those who don't elect the employer's group health coverage. As I understand it, there can be three types of opt-out arrangements, unconditional, conditional, or an "eligible opt-out arrangement" - which is a conditional arrangement that also meets specific additional criteria. If the employer is a non-ALE, what is the downside, if any, to having an "unconditional" opt-out arrangement, other than possibly affecting the affordability calculation for purposes of whether an individual is eligible for a subsidy for policies purchased on an exchange? Seems like a conditional opt-out arrangement, for a small employer, may unnecessarily restrict the employee from choosing to buy individual coverage? I'm sure I'm missing something here. Would appreciate any thoughts.