Jennifer D.

I have an unresponsive client who sponsors a 401(k) plan with prevailing wage. They have not deposited the owed prevailing wage into the plan for months, and are now potentially shuttering their doors and just walking away. What do I give them to impress upon them how they need to fund the contributions? I haven't been able to find anything concrete here, on the IRS website, DOL website, or ASPPA book, but maybe I am just searching incorrectly?

That was the only thing that was coming to mind as well, and we may do that in this case. If it was a situation where the client had shut its doors just as fast as it gave us notice of the termination, do you think looking back at the census and comparing it to the vesting percentage might allow for an educated guess? Of course that wouldn't work if the plan had anything less than a 5 year graded vesting schedule.

Because it came from one of those payroll companies that doesn't send over everything a TPA requests, and the client had been under the impression the payroll company was doing everything it was supposed to. Then they shut off access as soon as they find out the client is leaving so the client couldn't go get the report. 🤦‍♀️

We took over a retirement plan last year and never received the Roth basis information to calculate if a distribution was qualified or not. The plan is now terminating. I know that a termination does not make the roth distribution qualified, but what do any of you do if you do not have the 5-year information from a prior TPA or client?

Hi all: I have a client who we are taking over from a prior TPA. They have a retirement plan as well as a SUB (supplemental unemployment benefit) plan. The client is a prevailing wage client (long story short the fringe is what funds the SUB plan). Because it is a SUB plan they file a 5500 for it, but they have not been able to get a copy of their plan document or SPD - instead their prior TPA keeps giving them a copy of their 125 plan. My understanding was that a SUB plan needs to have a separate document. Even if I was going to correct that for them with the IRS, I have no idea where to start in getting a SUB plan document - aka I have no idea which companies provide this specialized plan document that isn't a TPA. So, my questions are, does a SUB Plan Document need to be separate from a traditional cafeteria plan document, and does anyone know of a document provider I could use to draft a SUB plan document?

A client brought us a one participant plan that filed 4 years worth of 5500s electronically late (they received bad advice that they could transmit them electronically and then do DFVCP instead of properly mailing them in). When I looked at the asset amounts, the plan never had over $250,000 in assets. This money was all cashed out this year and a final 5500 is due for 2021 regardless of the mistaken "late" filings. My question is, to try to help this client, do we electronically file the final 5500 and then send the IRS a letter that they never should have filed in the first place until now, and here is the final, or should I just mail the final 5500 to the IRS with an explaining letter? The closest I found to answer was this very old post:

Can you go from a 3% non-elective Safe Harbor contribution to a flexible (maybe) 3% safe harbor contribution mid year? Would you need to provide a seperate notice for this under SECURE, or can you just make the change when writing the Cycle 3 document?

I have a prospective client who has a non-Erisa 403(b) for the NHCEs to defer, and an ERISA 403(b) for the charter founders to defer and get a PS contribution. We've been called in because while the non-ERISA document excludes charter founders and the ERISA document excludes everyone else, a founder had been deferring to the non-Erisa plan and got a profit sharing contribution in the Erisa plan (she did not defer to the Erisa plan). My questions are - can you set the plans up this way - ie can you aggregate the non-Erisa and Erisa plans to make sure the NHCEs aren't discriminated against for coverage, and if so, does it all get messed up with having the 1 founder deferring into the non-Erisa plan (I know it violates the document but it only happened this year so we should be able to amend the doc to permit it). Thoughts?

The problem is that the participant did actually cite a poorly worded link on a Q&A from the IRS webpage, so we are trying to explain to her why the IRS said that and why our client can have this loan requirement. https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-loans Tom is right that it isn't in the document per se, but it is in the loan policy. We use Relius documents and the loan policy that generates with the doc and hardships are a permitted restriction, but that only shows up in the loan policy. She just doesn't believe that's permissible by law because of what she found on the IRS website. Frustratingly enough, our TPA business takes participant calls directly, so I can't just hand this over to the employer as we're expected to deal with these issues. The employer doesn't know why they can do it, just that they wanted loans to be restrictive and we told them their loan policy can have these restrictions. Now it's a "put our money where our mouth is" sort of situation. Thanks for the cite Kevin! That's exactly what I'm going to use in my e-mail to her!

I have a terribly persistent participant who is convinced that you cannot put criteria on obtaining a loan from your retirement plan. Specifically, her plan requires hardship proof. Does anyone have the IRS reg that states you can put these types of criteria on your loan program?

Does anyone have the code citation that states a government non-erisa 403(b) plan can have a matching contribution?

I have 4 companies - A, B, C, and D. A, B, and C are a controlled group, and C and D are a controlled group. A and C are not a controlled group and they do not qualify to be an affiliated service group. Who do I test together? My thinking was I test A, B, and C together, AND then test C and D together, but that could be redundant for C, so maybe I'm missing something?

We believe he will still have enough to fund at least some after he pays back the missed interest, so assume that's the moot point. I'm more worried about the prohibited transaction. The policy permits a loan for any reason, but he's a previously defaulted trustee who wants to fund the plan with his account....

So here's a new one for me: We have a client who has not funded the employer contributions to the plan since 2013. He would like to take a loan from his account under the plan and use that money to fund the plan. The kicker is that he has already defaulted on a prior loan. The loan policy could be amended to permit him to take a loan even after a default and we could include the prior loan and missed interest when calculating how much he can take out to fund the plan. BUT, this isn't passing my smell test. I fear this would be considered a prohibited transaction because it's the employer who already defaulted, and while he may use the money to fund the plan, he might not pay it back again. Thoughts?

I am not sure if I have an open MEP or a closed MEP. We have an employer owned 100% by the wife, and her company A sponsors the plan. The husband has a completely different company B where he owns 100%, but to save costs, he has adopted Company A's plan as a participating employer. There is no crossing of employees, separate payrolls, and no direct ownership of the other's company. The companies also do completely different things from each other and have no commonality in business dealings. Is the family attribution between husband and wife enough to make this a closed MEP, or is it an open MEP? (it doesn't actually matter, we just want to report it correctly for this first year)