Belgarath

Mandatory 20% withholding is only applicable to "eligible rollover distributions." A hardship withdrawal is not an eligible rollover distribution.

Not sure what you mean by "used" - under the language you have posted, the forfeitures ARE being used. Paying expenses is voluntary, the next two uses (if any left over after paying expenses, if they choose to pay expenses) are mandatory, in the order as listed in the pan language above.

Any thoughts out there?

Funny, most of the documents I've seen DO provide the automatic inflation adjustment. At any rate, unless an employer for some reason does not want the limit to increase, it seems like it is unnecessary work and expense to amend each year. (The cynical part of me wonders if a TPA might do this intentionally to increase billings, but that is perhaps an unworthy thought.)

I'll just mention here that while this is the way it should be, it is NOT necessarily the case. I don't presume to advise on anything to do with this, other than to echo the suggestion that due to the gravity and complexity of the situation, it might be well worth a consultation with a good attorney who has expertise in the health/FMLA issues, and ERISA issues. I join in with others in sincerely wishing you successful treatment, and best of luck to you.

Is there even any obligation to report it on a Schedule C? Never having seen a negative amount, I 've never had any reason to look into it, but it seems counterintuitive that it would be reported at all. Caveat - this is without even looking at the Schedule C instructions - just an "off the cuff" thought.

Deleted.

Deleted my post. Thanks.

Hi Bird - Wednesday e-mail from ASPPA: October 2, 2019 Powered by the American Society of Pension Professionals & Actuaries ASPPA Seeks IRS Action on Form 5558 Acknowledgments Kizzy Gaul ASPPA has received reports of plans receiving incorrect Form 5558 acknowledgments or extension denials despite filing on time to extend their Form 5500 deadline. ASPPA's Government Affairs Committee has contacted the IRS to receive guidance on a resolution. READ MORE 403(b)s Boost Participation, Contributions, Financial Wellness ASPPA Net Staff According to the 11th annual 403(b) plan survey from the Plan Sponsor Council of America (PSCA), increased contributions by both participants and organizations continue to have a positive impact on retirement readiness. READ MORE PBGC Proposes Updated Rules Concerning Benefits Payments John Iekel The Pension Benefit Guaranty Corporation (PBGC) has issued two proposed rules related to its ERISA Section 4022 Benefits Payment Regulation. READ MORE House-Approved Bill Preventing 'Forced' Arbitration Could Impact Retirement Plans Ted Godbout Legislation approved recently by the U.S. House of Representatives would restrict the use of pre-dispute arbitration agreements – potentially including their use in workplace retirement plans. READ MORE BROWSE TOPICS Sales and Marketing Practice Management Technical Resources Advocacy Education and Career Development BECOME A MEMBER OF ASPPA Join our elite network of retirement sales and investment professionals. Join as a Credentialed Member Join as an Affiliate Member RESOURCES Retirement Plan Academy ACOPA Corner Publications Government Affairs Conferences and Events ASPPA Net News Research ABCs ASPPA Membership The American Society of Pension Professionals & Actuaries is a non-profit professional society. The materials contained herein are intended for instruction only and are not a substitute for professional advice. 2019. All rights reserved. American Society of Pension Professionals & Actuaries 4401 N. Fairfax Drive, Suite 600 | Arlington, VA 22203 P: 703.516.9300 | F: 703.516.9308 CustomerCare@asppa-net.org www.asppa-net.org Click here to unsubscribe.

I just used it for a document, and no problems whatsoever.

As usual, just want to make sure I'm not missing something. I've just seen a couple of plans that did perform the Key employee concentration test and the DCAP testing. However, they did none of the eligibility or benefits testing. It so happens that even on a cursory glance, they obviously pass eligibility testing, so maybe they just looked at it informally and, reasonably enough, said "it passes." Ditto for the "Availability Standard" test. However, for the Utilization Standard test, the HCP ratio is app. 10%,and the non-HCP ratio is about 5%. And it looks like this has been going on for about a million years, give or take a year or three... So, - am I missing something with regards to the Utilization test? Is there some special way around this that I don't know about? And for the past failures, I'm not aware of any "correction" procedure - if audited, they are screwed, right? All they can do is correct this going forward? Any thoughts appreciated!

Thanks for the responses!

Well, you might have to file under VCP, for example.

When you think you've heard it all... Non-profit ERISA 403(b) plan. The business decided to install a 457 plan so that they could contribute for the lone HC executive. Fine. Due to a new and inexperienced Human Resources person, they not only didn't timely adopt the 457 plan, but the employer contributions were just sent to and deposited into the 403(b) plan! This happened for several months until it was finally noticed. Now, I know about PLR 9144041, etc., and although this situation doesn't clearly fall under the stated "mathematical errors", etc., it does seem like there should be some latitude to consider a contribution to the wrong plan (even though other plan not yet established) as a mistake of fact. For example, if a client has a DB plan and a DC plan, and the DB contribution sent to the DC plan, I'd feel comfortable having that refunded under a mistake of fact. Thoughts on this situation? I know this interpretation may be pushing the envelope, but it doesn't seem that far-fetched to me.

Nope. the two businesses are a controlled group, and as such, the owner is already maxed out. Now, I'm assuming when you say "contributed the max profit sharing" that you mean they maxed out on the full 415 limit dollar amount. If not, there may be room for a contribution - but you can't use an IRS model SEP, you'd have to use a prototype SEP that allows it.

I would absolutely defer to the employer's definition. If the employer classifies it as a "bonus" then it should be excluded. Make the employer decide if this should be treated as a "bonus" or regular salary. Don't let the employer push you into making the decision. Just my opinion...

Unusual question came up. Sole prop - plan is a 3% SH plan, HC's are NOT excluded. It has been proposed that the plan be amended to exclude the sole prop from receiving the SH for 2019, on the grounds that since the sole prop isn't required to receive a SH (if the plan is set up that way) that it is ok. To me, this seems like a very aggressive approach, and I wouldn't do it. However, I always like to hear the opinions of others - anyone have a different viewpoint?

Also, again an assumption - if an employee voluntarily opts out of participation in the HRA (why would they typically do that, when it is all employer money?) they would still be included in the testing, right? I see nothing in the regulation that indicates otherwise...but if included, are they included as benefiting or not benefiting?

Thanks Chaz. FWIW, although the employer didn't mention the Service Contract Act (and I certainly didn't ask, since I'd never heard of it!) the employer did mention that for this employee(s) the grant specifies certain mandated benefits, but the HRA is not among them. Anyway, your comments have been very helpful!!

Thanks Chaz. I can see I'll have to do some research, as to be honest, I've never even heard of (or at least, have no memory of) the Service Contract Act and FAR. This may be moot, as it is apparently a very small plan that has never been tested, and it may fail miserably regardless of an employee or two funded through a government grant...

As a follow-up to this question, an entirely different question! Let's say an employer is hiring employees whose salaries are funded by, say, a government grant. The government grant that pays for them to hire these people specifies the benefits that they must receive, and an HRA is not one of those benefits. First, I'm assuming there is nothing that would preclude the employer covering them under the HRA if they WANT to? Second, if the HRA plan says that everyone who is eligible for employer's medical plan is eligible to participate, then the fact that their salaries are funded through a government grant is immaterial - these employees, who are covered under the medical plan because the government grant specifies that they must be covered, must be considered for testing purposes, right? If the employer wants to EXCLUDE these people, then they must be considered in testing, unless they are otherwise excludable under a different, allowable category?

It isn't entirely clear to me as to who can be excluded when performing the eligibility test. 1.105-11(c)(2)(iii) lists certain categories of employees who may be excluded. But, if some of these people are already eligible to participate, it doesn't make any sense whatsoever to exclude them. For example, you can exclude employees with less than 3 years of service. However, suppose the plan already allows everyone with 1 year of service to participate. I'd include anyone already eligible to participate, in the testing. Anyone else have a different opinion?

Can I ask for a clarification on this? I know you can't have the "age 50" catch-up, but can't you have the "last 3 years before NRA" catch-up?

Identity theft is so scary on these accounts. I think I have mentioned this before - my 401(k) at my former employer changed over to Prudential as the recordkeeper. When I read their long, convoluted and crepuscular disclaimer, I was horrified to find that they claimed they had no liability for unauthorized withdrawals unless I had previously notified them of password theft. Well, how would I know until it is too late that my password was stolen/hacked and my account was emptied? (I give my password to NOBODY, but some hackers are evil geniuses.) So, after protracted unsuccessful responses with BS statements carefully crafted by their legal department, we worked out a system whereby my account is flagged so that NO DISTRIBUTIONS may be made using on-line tools. I must CALL in, and answer a special challenge password before withdrawal forms are MAILED to my address of record. Address cannot be changed without similar steps. Call me paranoid, but I feel a lot more comfortable this way.

Too funny!