RatherBeGolfing

HA! Better you than me Bill

A long time ago, I had several SDBA only plans with 100+ accounts... I could swim in monthly statements like Scrooge McDuck when I did the year-end work. I don't miss those days. At my current firm we are daily val and only allow SDBAs from our RK platform. All the activity rolls up to our trust statement so it really doesn't matter how many SDBAs are in a plan.

Yes unintended top heavy consequence

RK isn't my department, but this is a conversation we are currently having. 99% sure we will now incorporate an optional affirmative election on the form (paper and electronic). Currently, the election is separate from the permissible distribution. @MoJo care to share what you guys are doing?

Circling back to this. I brought this up in a webinar with Derrin yesterday, and he said no. The withdrawal is separate from the election to defer and can't be conditioned on an affirmative election of 0%. He cited 401(k)(4), benefits cannot be contingent on an election to defer. The more I think about the more sense it makes. The permissible withdrawal is an option for employees who were auto-enrolled, but nowhere does it say that you have to opt out of deferrals to exercise the option. Best practice is to provide the participant requesting the withdrawal with the tools to change their deferral rate, and to explain that they have to make an election to stop or change the deferrals. Otherwise, they get the distribution but the deferrals continue. In theory, you could incorporate an optional affirmative election feature on the permissible withdrawal form or process make it as simple as possible. That might be a possible issue for RK/payroll though.

@Tax Cowboy I think ERISAPedia has a marketing tool for this as well. They data-mine 5500 and give you lots of options. Its been a while since I demo'd it, but it was pretty flexible.

We roll all forceouts. From $7,000 down to any amount that is in excess of distribution fees. I havent had it happen, but in theory that could be $1 after fees.

The benefit is largely to the consumer/participant/beneficiary. Do I have assets in a former employer's plan? This is the first sentence on the DOL's website:

I think it could. How a participant makes an affirmative election should be an administrative procedure that the PS can adopt.

If nothing else, 10% is probably a big enough contribution to push participants to make an affirmative election.

We have been able to solve for AE and escalation in our RK system and other applications, but I know many are struggling with it. 100% agree we cant put that responsibility on clients.

It should. I haven't seen many plans actually default to 10% though.

Yes, but it wasnt all that clear in my opinion, and that's why we get some relief since you can basically "catch up" to cover all by the time the regulatory applicability date. My understanding is that if you do this, these "newly covered" employees would have to have their rates reflect what they would have been had the employee been auto enrolled 1/1/25. So lets say I was eligible 1/1/24 but had no affirmative election on file. I was not auto enrolled 1/1/25 at 3% because I was improperly excluded. I could get auto enrolled 1/1/26 (or later depending on the effective date of the final regs), at the rate I should be at had I been auto enrolled 1/1/25.

Thanks CBZ. Been reviewing the Autoenrollment guidance today so hadn't gotten to this yet. Good thing we have nothing else to do in January

The document providers (ASC and FTW) I have talked to are taking the all-or-nothing approach absent guidance from IRS that says you can do one without the other. Pretty sure I have seen the same from FIS.

Your paranoia is not unreasonable, but if the concern is another business trying to "steal" your clients simply because you approached them with a proposition, a business broker or a third party of some sort is probably necessary. It will be an added expense, but I don't see a way around it if you feel like you cant approach a possible buyer directly.

Non-Disclosure Agreement / Confidentiality Agreement.

@Peter Gulia Im not 100% sure. I know that my document provider removed all mentions of domestic partnership, civil union, and other formal relationships from both basic plan documents and adoption agreements. I have seen similar language in other cycle 2 documents, and while I haven't reviewed the basic plan documents in depth, I don't recall seeing any cycle 3 adoption agreements that include formal relationships that are not marriage.

Merry Christmas Tom and all my fellow benefitslinkers!

All I wanted for Christmas was a technical corrections bill 😟

For Federal tax purposes, the terms "marriage" and "spouse" do not include registered domestic partnerships or civil unions under state law unless denominated as marriage under that state's law. Many Cycle 2 DC documents included language regarding these other formal relationships, but IRS made providers remove the language for Cycle 3. See Rev Rul 2013-17 and Notice 2014-19 n-14-19.pdf rr-13-17.pdf

You answered your own question. They are domestic partners, not spouses. It is not a one-participant plan. File on 5500-SF, and yes they need a bond.

Sounds like all you have is a draft DRO, not a QDRO.

Depends on the provider. We do, and I have seen other providers that offer this service for a minor fee. I have also seen providers that say "not my problem".

This is the answer.