justanotheradmin

I have not seen any plans yet rely on electronic notary/ witness. I did attend an education session a few years ago that talked about the changes in various state laws (some enacted, some proposed) that allowed virtual electronic notarization and witnessing. It seems primarily something based on state law. With the arrival of the pandemic and lots of wills being updated the session was very relevant and timely. I wonder if plans can follow the state law rules for notarization with confidence or if they should stick to a possible more restrictive federal standard of some sort (if it exists).

For FWIW I see a lot of 'solo-k' plans with safe harbor in them, particularly SH to NHCE only. In the event an employee is hired and becomes eligible, the SH is already built into the plan document without a need for an amendment. Similarly - I don't like to see them with no service requirements/ immediate entry. A better design is the maximum 1 year of service, age 21, semi-annual entry etc so that if someone is hired who isn't the owner, there is time for an outside party to review the plan provisions before there are any errors, such as a missed opportunity to defer. If someone is hired that they want to let in sooner, usually its not a big deal to do an amendment to change that.

well box 5 is specifically Medicare Wages and Tips, which may or may not be the same as the plan document's definition as W-2 Compensation. You should double check the basic plan document for the actual definition of W-2 compensation, which might be different. For many documents W-2 comp really means anything that could be reported on a W-2, so its more often box 1, plus pre-tax amounts in Box 12, plus pre-tax amounts not reported on the W-2(such as §125 deferrals). I'm not sure what you mean by Gross Compensation either.

Reality has arrived - we are seeing plan audits reassigned due to personnel changes at Treasury, audit appointments pushed out, and even unofficially an audit scaled back. I'm sure there will be more changes coming.

Which part of SECURE 2.0 are you referring to here?

Just FYI - you don't need to put your question in more than one topic thread. Many regular readers and commentators view the most recent posts on the "Latest Messages" part of the website - which shows recent /active post across ALL topics. So posting in the QDRO thread and the 401(k) plan thread really isn't necessary and it is better to have responses consolidated under a single one. Maybe consider deleting this one?

I would like to point out that there absolutely is a 10% early withdrawal penalty to an alternate payee spouse if they are under age 59 1/2 and don't have some other exception. Being able to take a cash distribution payable to themselves pursuant to a benefit award in a DC plan QDRO does not change that.

In my two decades of working on primarily qualified DC plans (and a fair share of DB), I have NEVER had a participant in a regular qualified defined contribution plan elect an annuity. Thousands of plans, even more thousands of participants, not one. Most DC plans do not even allow annuity distributions, SECURE 1.0 and 2.0 does not override that. So I think your fear that a participant will elect an annuity from their DC (such as 401(k), 401(a), 403(b), money purchase etc), and then later a lump sum DRO is approved by the plan administrator as a QDRO - is unfounded. Keep in mind that the DRO is not Qualified until the plan says it is. Entering it into the court does not make it qualified. If the plan administrator receives a DRO that they cannot accept because the form of benefit or level of benefit is not available, perhaps because the participant already did something, the DRO will get rejected. Perhaps I misunderstood your concern, if so, I apologize. I hope others can chime in as well.

and yes, generally speaking, cafeteria plans are subject to non-discrimination testing under the myriad of control group rules and for small employers it isn't that unusual to see the HCE excluded from the cafeteria plan if testing has failed in the past. There are exceptions to everything off course, so whatever your particulars, you should have reviewed by someone who is well versed in control groups and combined testing for that particular benefit type (retirement plan, health, etc).

Given that this question was put in the Cafeteria Plans thread, I wonder if OP was looking for more basic answers, like health insurance plans, life insurance programs, disability insurance, qualified retirement plans, etc rather than understanding the actual mechanics of aggregation, disaggregation, 410(b), testing different parts separately (such as deferral, match, nonelective). The reality is that any benefit, bonus, compensation, depending on what it is, might be subject to the combined rules. There was a case (the cite escapes me ) where even year end grocery gift cards were considered an ERISA covered benefit. If you have a particular benefit any of the companies are offering - and want to know if it has to be analyzed with the rest of the control group - you are best off talking to someone who can review those particulars and specifics and give you an answer.

If the employer is paying the premiums on life insurance owned by the plan the premium payments are employer contributions to the plan. Having the premiums paid by the other dollars in the participant's account is no different from a participant investing in something with fees and the fees are taken from that person's account. Or a participant who is transferring dollars from investment A to investment B. Just because the participant wants more dollars in investment B doesn't mean the employer is going to put the dollars into investment B for the participant.

Post-nups are a thing, and should be a standard part of any family law attorney that prepares pre-nups. As would be updating beneficiary forms both before and after the marriage occurs. The soon-to-be spouse cannot waive a plan benefit they do not yet have rights to. They don't have rights under a qualified plan until they are actually married. The plan does not (cannot) look at any pre-nup. So once the spouse actually has rights under the plan - that's when they can sign a waiver of the benefit on an updated beneficiary designation.

Did the TPA use actual rate of return, rather than the DOL calculator? Unless the TPA was told that the plan would be submitting the correction to VFCP, the calculator should not be (though it often is) used. I'm also wondering why the same person or company isn't doing the lost earnings + Form 5330 + VFCP if the plan wanted all three. It seems unusual or inefficient to have someone different prepare just the VFCP submission.

agreed. I dislike that the guidance uses the term "allocated" because like you, I use it to refer to the year to which is accrued, which is not always the same as the year in which it is actually deposited. So when reading and discussing with others I try to remember to point out that the usage of "allocated" in this guidance is not the same as what I use with my close peers in the industry. So I agree, when the dollars are deposited - that is when the taxable event occurs.

If there are fees that are going to be paid from the plan assets, for the QTA, recordkeeper, custodian, auditor, advisor, TPA etc typically all of those should be addressed first, before payouts occur. In bankruptcy - if the plan accounts are to cover the fees - as most plan allow - then you don't want the people who took their time taking their distributions to bear a disproportionate portion of the remaining fees.

Only speaking to the question about Sole prop and EIN (not addressing any of your filing or business entity issues). Sole proprietors can, and do, get EINs all the time. They are available through the exact same process online as with any other business that needs an EIN, on the IRS website. they might need them for retirement plan purposes, such as here. Or because they have employees and will be doing payroll and remitting payroll taxes and issuing W-2s, etc lots of different reasons why having an EIN might be needed for a sole prop.

well how much are you actually doing? sending them a link to the DFVCP page and telling them how to answer the questions? and then telling them to click okay and follow the instructions to make the online payment? Seems like that's just an email, or maybe a phone call if they like someone to be with them while they click on things. Assuming you are charging for preparing the 5500s themselves, and marking the DFVCP forms, I don't see how it would be much more. If you charge by the hour for extra assistance items, maybe one hour?

No. That does not sounds normal at all. I've only ever seen letters for missed Form 945. I've never had the IRS call about 945 or something like it. if they call again the plan should get the agent's number, name, and their supervisor's name and number. It sounds very fishy. Not to mention the information given is wrong.

Thank you Peter, that thread was very insightful.

Anyone have any resources / contact information that can be sent to an attorney in Missouri who is not understanding the retirement beneficiary and federal rules for death benefits? Or alternatively - tell me my understanding is wrong and I'll tell them and the sponsor to listen to the attorney? Fact Pattern: Death distributions needed from standard 401(k) and DB (PBGC covered) small employer retirement plans. Everyone is in Missouri. No named beneficiaries, so the default plan document beneficiaries apply. In this case the default beneficiary in the plan document is the estate. Period. Decedent did not have a will, based on court filings total value of assets likely is less than $40,000 (including the retirement plans) Estate/Probate was not opened within one year, and in lieu of doing the Small Estate Probate (Which is still allowed after one year), the heirs did file and receive a Decree/Determination of Heirship. Which does happen to have an estate number on it, so the court can track it. Attorney for the heirs wants the plans to pay directly to the heirs. The plans are insisting on a TIN so the death benefits can be paid to an estate. Which I agree with. The confluence of federal laws for the plan, the fact that there IS a beneficiary, so the determination of heirs doesn't really matter for the plans, etc, are confounding for the heirs' attorney. Other than just telling the plans to hold firm, any other ideas? information they can send them? Any Missouri estate attorneys want to chime in or want me to send their contact info to the heirs' attorney?

Thank you Peter. It is heartening to know someone else noticed many of the same things and that you concur with my conclusion. With 2023 as the first year with an actual MEP schedule, and not an attachment, I had not given the particulars of some of the questions much thought before now. I have never tried contacting OCA, and honestly don't know how fruitful it would be for me. But if someone else wants to try, I would be interested to hear what information they receive. Here is their contact information for anyone curious. https://www.dol.gov/agencies/ebsa/about-ebsa/about-us/organization-chart#oca

Question from Schedule MEP 2e Does the plan include any individuals not participating through an employer or who are individual working owners? Yes or No Does anyone have information on the working owner questions on Part II of the Schedule MEP? I have read the instructions to the schedule, as well as the referenced CFR. Assuming a small 'closed' MEP of business entities, where each entity is a participating employer on the legal plan documents. Entity A - S-Corp has two owners who are part of the plan, along with a number of employees. Entity B - LLC, no S-corp election, one member owner, no other employees, self employment earnings, also participates in the plan Entity C - sole proprietor, no other employees, self employment earnings, also participates in the plan. Entity D - LLC, no S-corp election, one member owner, several other employees that are part of the plan, owner has self employment earnings and also participates in the plan I would think the answer would be yes for all. The definition of working owner doesn't preclude the business from having other employees, so even Entity A has a "working owner" two in fact. Am I understanding this correctly? If there is a MEP and the owners are NOT part of the plan (do not have earned income, no contributions etc) then I would guess the answer to the question on the schedule would be No. I appreciate any light someone can shed. Thanks!

The bankruptcy trustee or plan administrator should contact an ERISA attorney if they do not know how the plan should be treated during the employer's bankruptcy. If the plan is PBGC covered they should likely be contacted immediately as well, and the plan termination would go through them. If the plan is underfunded - the plan administrator will need to see if they need to make a claim for employer assets as part of the bankruptcy. In very small plans, there are occasionally options for an owner to forego benefits, but you should really talk with an actuary and ERISA attorney.

That is incorrect. The due date depends on a variety of factors, amount particularly, but many plans are on weekly, monthly, or quarterly deposit timing. If the tax is not required to be remitted right away, and it is small enough to be sent in with the Form 945, it is subject to the form filing due date, typically January 31 after the year ends. The 20% withholding is 945 tax type, so if you look for information on that, you should be able to get additional information. Note: When the Form 945 is due is not the same as when the actual $$ must be sent in. The $$ typically have to be sent in sooner.

Thank you Paul! I knew there was someplace simple I was overlooking.