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cheersmate

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  1. cheersmate
    A plan sponsor has been notified by Social Security that 2 of its employees have invalid SSNs. These 2 employees have worked for the plan sponsor for several years, W2s have been issued, and both are Plan Participants. This recent notification has come as a surprise to the plan sponsor, given until now there has never been a notice of any kind. The plan sponsor asked each employee if the SSN being used was provided in error and if either has another SSN (either due to typo or ascertaining a valid SSN) - to which both said the SSN the plan sponsor has on record is correct and that they have filed tax returns... the plan sponsor is still trying to get to the bottom of this. Qs: If either or both are in fact illegal aliens using invalid SSNs (stolen or otherwise), are they entitled to their plan accounts? If so, what taxpayer ID number would the plan need to report on 1099R when distributed, or would the Plan use the one on record currently even though it is known to be invalid? If not, is it a forfeiture or is there some other action necessary? Thank you for any insight anyone can share on this matter.
  2. cheersmate
    Both points you state are exactly my thoughts. But I believe the employer can only exclude it from 2018 plan comp purposes IF it qualifies as a "fringe benefit". The refund is not because of a test failure, however - it was on account of the fact that BCBS did not expend at least 80% of the premiums paid for actual health care costs... under affordable care act, when this occurs in a year, the insurer must refund a certain amount of premiums paid back to the employer (to be reallocated to each employee covered, taxable income). Based on this, does your answer still stand? I am wondering if this has happened in the past and it went unnoticed, undisclosed to me. It came up this year due to conflicts in weekly payroll accumulations for the year v. W2 figures.
  3. cheersmate
    Let me clarify the "refund" In 2017 Employees paid their share of Healthcare Ins premiums via 125 plan (pretax withholding). For Plan purposes in 2017; for Plan purposes the Gross Compensation was not reduced bc 125, 401k type of pretax withholding amounts are included in Plan Comp In 2018 BCBS refunded $X to the employer (because utilization was less than 80%, Affordable HC rules), and $X is then allocated to those employees who paid 2017 premiums. It is taxable income and was reported on W2. It is this "refund" I am questioning. Should it be recognized for 2018 Plan Comp (see above for plan details). It seems to me it included -- my hesitation is whether it is a "fringe" and if so, then by plan definition it is excluded... thank you
  4. cheersmate
    When an employer's group medical plan does not utilize at least 80% of the premiums for healthcare in a given year, the insurance company must provide a "refund" to the employer. This "refund" is then allocated to those employees who paid insurance premiums, and it is reported as taxable income on W2. Question: Is this "refund" received by the employee included in plan compensation the year the refund is received? The particular plan uses 415 Comp excluding reimbursements or other expense allowances, fringe benefits (cash or non-cash), moving expenses, deferred compensation (other than deferrals specified in k. above) and welfare benefits. thank you
  5. cheersmate
    Mike - thank you for your reply It passes general testing. My concern was whether it was necessary that the NHCEs receive a PS (specifically) allocation rate... was not clear to me the 3%SHNEC covers it.
  6. cheersmate
    Safe Harbor 401k Profit Sharing Plan provides: 401k+Catch-up for all 3%SHNEC for all NHCEs only Discretionary PS, each Participant own rate group 25 HCEs, 2 are owners 100+ NHCEs Employer would like to contribute the following: 2 owners 9% PS Remaining HCEs 1% PS (Plan is NOT TH) NHCES only the 3% SHNEC, 0% PS -- this satisfies the G/W minimum Can this be done or must the NHCEs receive "some amount of" PS?
  7. cheersmate
    Facts: Employer has a 6/30 fiscal year and would like to install a SH 401k for the coming 6/30/2019 Fiscal Year end. In order to be a Safe Harbor plan for this year, it must be in place no later than 3/31. For 2018 the employer provided a SIMPLE plan. The 2018 employer contributions are to be deducted on the 6/30/2019 fiscal year return (as is required by SIMPLE plan rules of deduction -- cal year ending within the fiscal year provided contributed by due date of Fed return (incl exts)). Questions: Is this employer permitted to establish a new Safe Harbor 401k Plan (incl PS provisions) for its FY ending 6/30/2019 with a Plan Effective Date of 7/1/2018, thus full dollar limitations? Or, must it delay the effective date to 1/1/2019 since it had a SIMPLE thru 12/31/2018 (pro-rated limitations)? Thank you
  8. cheersmate
    The pink was for cancer awareness, support as I understand it. Must admit day glow pink and orange was a bit of a dazzler to watch!
  9. cheersmate
    In this situation the plan requires only 60 days for eligibility bc the employer needs to capture certain level of talent and feels the rapid entry is necessary. Generally v little turnover, but those who have left were vested at some level. It is fully expected the new hire, who is full time and salary is near 6 figures is expected to work indef into the future. Having said that if he terminates before a 1000 hrs in 2019 he would not vest in the PS allocation portion of his acct. Given this and my original concern that Tom Poje references it seems it would be best to "cherry pick" the next participant who is vested partially already. Or have I missed anything? Finally I am not clear why an -11g amendment is needed - what am I missing, please if you wouldn't mind? Many thanks to everyone!
  10. cheersmate
    Plan facts: 3%SH to all discretionary PS to all 3 HCES, 3NHCEs, young owner, mixed age staff each participant is in own allocation rate for PS Can the employer "cherry pick" a particular participant - who happens to be youngest and new ppt mid-year w lowest eligible pay - such that his own RG passes (a)(4)? The remaining NHCEs will receive at least GW minimum. Doing this passes all (a)(4) testing, 410b easily. My hesitation is because of perceived bottom up allocation... would it be better to "cherry pick" an existing but younger ppt who earns $100k (obviously more expensive to do so)? FYI, the other 2 HCEs are receiving the 3% SH plus 1% PS, their indiv RGs pass easily. Thank you.
  11. cheersmate
    HOKIES! HOKIES! HOKIES! ... sorry, just a bit of fun! ;)
  12. cheersmate
    When is a participant permitted to resume his/her 401k deferral contributions following his/her 2018 Hardship distribution 6 month suspension period? Is it immediately, or, must he/she wait until the Plan's next permitted "change", e.g. if Plan permits Quarterly changes, must he/she wait until the 1st of the next quarter following expiration of the suspension period? Plan provides 6 mo suspension Plan is SH401k Plan provides the Participant must complete a new election following the 6 mo suspension bc the election is deemed to be zero at the point of Hardship distribution. Generally speaking Participants may commence or change their deferral elections Quarterly (jan 1, apr 1, jul 1, oct 1). Thank you!
  13. cheersmate
    Kevin C, thank you for clarifying this... Very much appreciated!
  14. cheersmate
    assets left to make the RMD. If that happens, the distributing plan is still treated as having satisfied its minimum distribution requirements, but the the recipient plan will have received an invalid rollover amount. RatherBeGolfing - With respect to the quoted EOB... 3.a.1. ...Plan administrators should be careful particularly in two types of situations: (1) when a participant is electing a lump sum distribution in the calendar year in which the participant has attained age 70½ or in a later calendar year, and (2) when a participant is taking a nonperiodic withdrawal of a portion of his/her accrued benefit in the calendar year in which he/she has attained age 70½ or in a later calendar year. MY RELATED QUESTION: The active non-5% owner participant is age 75, requesting a partial withdrawal at this time but wants the remaining plan account balance to stay in the plan indefinitely. The Plan does permit this. In this situation: 1. I assume the first dollars withdrawn currently must satisfy the participant RMD based on age 75 factor, the balance may be rolled over to IRA. Correct? 2. Since this participant is taking a partial this year and triggering the RMD for this year, will the participant now be required to receive RMD for all subsequent tax years from the Plan, even if the participant would prefer not to? Thank you
  15. cheersmate
    I do not believe Larry agreed ... yet
  16. cheersmate
    Hello Kevin - I read thru the "spirited discussion" you linked above. Has Larry ever gotten back to you or anyone after he finished his side-bar discussion with Derrin and his intended further investigation of Derrin's citations? I ask bc at this point, given Sal says its is grey matter, and the various points made by you and Larry, now Derrin, it seems one side suggests the safe bet is to credit the service (even where temp was temp less than 1 year before being hired), the other strongly believes it is incorrect to credit the service (where temp was tem less than 1 year before being hired)... what's a girl to do?!
  17. cheersmate
    The employer occasionally uses the services of a temporary agency to find new talent. Occasionally after 90 days the "temp" is offered a permanent position with the employer. Does the employer have to count service while a "temp" for the Plan's eligibility waiting period, vesting credits and accruals? In other words, does the employer have to bridge that service while working "temp" now that they are hired to a permanent position with the employer? Thank you
  18. cheersmate
    Umm... so I believe not everyone has caught up to 2018, or left the stone age. I was astonished to be honest when that was told to me today. The participant is a professional but will not go against her parents wishes. Sad really. I suggested she name whomever she wanted as her beneficiary. If not the boyfriend, she could always ask him to sign the spousal waiver.
  19. cheersmate
    Hello David - Based on what the above posters have shared with me, it seems the joint tax return filings (or married filing separately)... hopefully one of them will comment to you.
  20. cheersmate
    Hello MoJo and JPod - I do have an update... the Participant is a resident of Washington state and has been living with her boyfriend for 7 years, currently looking into establishing themselves as "common law" spouses. They would like to get married however one of the party's families is prohibiting it -- so looking into alternatives. Do either of you know if WA recognizes "common law" unions and if so the parameters beyond tax filings, holding each other out in the public as spouses, cohabitation? Again, much appreciated.
  21. cheersmate
    Thank you MoJo and JPod for all of your insight with this matter. It is very much appreciated. If I learn of any additional information, I will be sure to share it here. Many thanks, again!
  22. cheersmate
    MoJo - do you know if California still recognizes "common law" marriage? The plan is a Relius document and it defines Spouse as per federal law. Either way... My concern is your final sentence, of course. To be honest, I do not yet have the details in support of "present intention" or duration (it is my understanding duration is only 1 of the several factors to be considered). But assuming they meet these requirements, is the significant other a "Spouse" for Plan beneficiary purposes, have legal standing upon death of Participant? MoJo, would you agree with JPod that if the 2 parties are filing "single" tax returns (not married filing jointly or married) that should be sufficient grounds for the Plan to rely on and deem the significant other not a "Spouse"? My only other thought is to have the Participant designate whomever they choose and if it is not the significant other, have the significant other sign the "Spousal Consent" portion on the Beneficiary Designation Form. thank you!
  23. cheersmate
    Does the primary beneficiary requirement that a spouse must be named unless spousal consent is provided also apply to "common law marriage" or common law spouse? The particular participant resides in CA as does the Plan. Thank you
  24. cheersmate
    Mike, can you please send me the spreadsheet? I would appreciate it very much.
  25. cheersmate
    Thank you, chc93.
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