khn

I don't know the complete details but there are a handful of corporate-owned individually named annuities that existed within a plan that merged in 20+ years ago. They've always been reported on the 5500 and now there is some question whether they should have been included within that merger or not. It was so long ago that none of the participants are active and anyone involved has long since left the company, no one is totally sure of the history.

What are your thoughts on this; a firm has audited a 401(k) plan for many years. A new auditor was recently assigned this year and has brought up a potential issue that has existed since the plan was established. Is it fair to ask why they never caught the issue earlier? Does the firm have any culpability in this case?

Is adding a Managed Account option to a Plan a fiduciary decision or a settlor function? This would be giving participants the option to enroll in a managed account feature for a fee; they would not be autoenrolled. A company wants to add the option but we think the fidcuiary committee would need to vote on it. Thoughts?

Thanks for your reply. 8j, 13b and 13 c all show that the assets were transferred to another plan. The concern is with the 'termination' wording. The way the attorney's drafted the board resolution it states the plan is: 1. tamended and restated to read identically to the xxx Planand that simultaneously the Plan shall be and hereby is, merged with the xxx plan. Does this matter or is it just semantics? The plan isn't in existance any longer and no one can contribute.

We are filing a final short form 5500 for a plan that merged into another plan effective 3/31/20. In Section VII, question 3a asks 'has a resolution to terminate the plan been adopted?' Should this be a YES or NO since the assets merged with another plan, and did not technically terminate?

Can a safe harbor plan change to immediate eligibility and vesting mid-year? I believe they can with notice, since it's increasing benefits. But does that then mean anyone not previously vested would become 100% vested?

An employer has already gone out of business due to the business impact of coronavirus. All employees have been terminated. They had over 200 participants at the end of 2019. Are they able to submit their final 5500 without an audit? The business is shuttered and there is presumably no one still employed to even have the auditors in. How is this to be handled?

Everyone is aware that Plan Sponsors have a fiduciary duty to periodically benchmark service providers, such as recordkeepers and advisors, that are paid from their 401(k) Plan. However, if a large company has outside counsel that they use for all corporate activities, but also pay sporadically from their 401(k) Plan when they perform work that can be paid as a qualified expense, do those services have to be formally benchmarked? I think the selection of the outside counsel would be considered a settlor function since the fiduciaries are not involved in the decision. However, since they sometimes are paid from the Plan, does the Committee need to perform some sort of benchmarking on legal services? Any insights are appreciated.

A company had a layoff where 30% of their employees were let go in February 2019, so it's a clear partial plan termination and they will be 100% vested. IRS guidance seems to indicate that any other participants who leave the company during the same plan year, even voluntarily, would also become 100% vested. Is that correct? "An affected employee in a partial termination is generally anyone who left employment for any reason during the plan year in which the partial termination occurred and who still has an account balance under the plan."

Thanks all for your insights. The Plan Sponsor is a corporation. They did file a 5500 for the 2016 plan year. Contributions were processed in November and December 2016. The one trustee who did sign in 2016 is not an officer/partner/principal. We're trying to research if there is a board resolution or minutes. Do you see this as something that will prevent the new recordkeeper from taking the Plan on?

Thanks for your responses. The issue is the Employer signed 1/5/17 but the effective date in the Adoption Agreement is 1/1/16. Is there anything that could/should be done prior the Plan moving to a new recordkeeper?

A plan was established in 2016. The TPA provided an adoption agreement effective January 1, 2016. One trustee signed it December 19, 2016 and the rest signed it 1/1/17. Contributions were not taken until 2017. What can the Plan do to remedy this? They are moving to another recordkeeper, and the shortcomings like this with their current provider are why.

Is there a 30-day notice requirement for simply adding a new fund to a 401(k) lineup, not mapping any assets to it?

What is a prudent response to a participant who is 'formally' requesting their employer add an ESG fund to the 401k lineup so they can invest in alignment with their moral principles?

What are the thoughts on this scenario - a plan sponsor sends out a fee disclosure as they are switching to a fixed recordkeeping fee. After the notice is distributed its realized that the fee is actually going to be less than what's reflected on the notice. Can a revised notice be sent out with less than 30 days notice, given that its a benefit to participants?

What form of documentation can a plan with an Individually Designed document have to ensure they maintain qualified tax status, since individually designed documents are no longer provided with IRS Determination Letters?

A 403(b) plan currently has 3 vendors and would like to move to a single vendor arrangement. However, they are hesitant to make any drastic changes from a participant perspective. Are there any clear issues with them doing a phased approach and moving to a single vendor going forward for new employees only? And is that something that could be amended in their plan document? Any insights would be appreciated.

This special contribution for union employees gets invested in the Stable Value fund, and can only be transferred to the target funds. The reason for this originally was because the contribution replaced a pension they had so the company was trying to protect it from market fluctuation I supposed.

The Plan has the contribution specified as going to the Stable Value fund for now, but they are open to amending the document.

An annual special contribution made by an employer for Union employees is invested in a Stable Value fund and can be transferred into the plan's default fund (target date funds). Wouldn't it be a better practice to invest initially into the target date fund, which is their QDIA? Or would it be better to invest it according to the participants' chosen investment elections?

Our NQ plan allows participants to take a lump sum distribution or elect a 10-year payout at a Normal Retirement age of 59.5 Our industry competitors seem to have a Normal Retirement Age of 55 in their NQ plans. We're considering lowering the age but are concerned about complying with 409A. Does it make any sense to consider lowering the age or is there too much risk of 409A violations?

A Plan went through a transition, and there was some miscommunication about whether the Plan or the recordkeeper would distribute the 404(a)(5) annual participant fee disclosures. As a result the notices went out 3 month late. I know failure to meet disclosure obligations could result in the plan administrator’s breach of fiduciary duty, but there doesn't seem to be a way to remedy this through VCP. What can the client do besides document the issue and get the notices out asap?

Opinions needed, please - A plan is recordkept at a large, well-known financial services firm. The firm offers a budgeting tool that is accessible on their website and participants can sign up for it on their own, outside the plan, for a fee. The contract is between the participant and the vendor for the tool. The tool is not offered within the Plan and the company has no involvement with the tool. Does the company have any fiduciary responsibility around the tool, simply because it is available on the recordkeeper's website where participants access their account?

A spouse is trying to submit a beneficiary distribution request to a plan; however, the plan has a beneficiary form on file from 2011 where the same spouse signed and notarized a waiver to allow their grandchildren to be beneficiaries to the account. Is there any issue in providing the spouse with a copy of the form so he see that he consented to waive his beneficiary rights? Since he would have seen it when he signed it I don't think it would be a problem but want to be sure i'm thinking correctly.

If a plan has Employer Nonelective Contributions for union employees only, does it need to be in the SPD or it okay for this contribution to only be addressed in the Collective Bargaining Agreement? The employer doesn't want the whole employee population to know that the union match is more than theirs.