Ebplans

Are there any land mines on the discrimination or other 125 plan road for an employer that maintains two IRC Section 125 plans for the benefit of its workforce? Must the two plans be aggregated for discrimination testing?

This is going back a long way but I believe the 1986 Tax Reform Act first precluded elective defferrals in money purchase plans. I vaguely recall it was possible and sometimes done before the '86 Act.

I often tell clients and others there are two rules to observe when working with an insurance company... Rule 1: Insurance commpany always wins. Rule 2: Refer to Rule 1. Insurance companies are not in the business of letting go of assets. My exprience is that the people working at most such companies don't care about ERISA fiduciary duties, although they should. I suggest your attorney draft a complaint alleging fiduciary breach by VOYA and your employer. Then send it to your employer and VOYA's manager with the message they need to fix this or you will file. Of course, that will cost you money which is not fair. It may cause your employer some heartburn, as well, but retaliatoiin is also a vciolation of ERISA. Sometrimes a written complaint is the only way to get the attention of plan fiduciaries and insurance companies. The QDRO procedures requiremenet has been on the books since the mmid-1980s. This is really fundaamental plan work.

I recall an IRS audit from years ago in which the aditor made my client's plan vest participants who had balaces in the plan including those who died as well as all others when the plan terminated. The auditor's position was that if the money hadn't been distributed, all the vesting rules applied. I get that there is no plan terminatin here, but that auditor from days of yore would say if you diddn't distribute, you must vest. I would be interested in CuseFan, ESOPGuy, or anyone else's take on this. The plan may need to VCP/SCP itss failure to distribute.

PA's are usually professional associations, and are creatures of state law. Some states have Professional Corporations in lieu of PAs. Some have Professional Sewrvice Corporations in lieu of PAs. State law determines who can organize as a PA/PC/PSC and who owners can be. In geberal, they are similar to corporations, single director/owner corporations in your case. My experience is that PA/PC/PSC employees are W2 emloyees. This is just the tip of the iceberg. Your other questions don't have enough facts to answer.

I have had many clients over the past 25+ years that were governmental hospitals. Most were county hospitals. They overwhelmingly received 501(c)(3) status so they could maintain 403(b) plans. In addition, many maintained 457(b) plans. As governmental entities, they were not subject to ERISA and the pre-ERISA IRC governs with a few exceptions. Not your facts, but they are governmental with 501(c(3) status. This sounds like your client is a FQHC, a Federally Qualified Health Center. FQHC employees are Federal employees and they get FTCA 'protection.' They get funded through the PSA and get their authority from Medicare rules, I think. See DOL Opinion 2005-07A. Again, not your situation exactly, but the DOL ruled on a statewide group of FQHCs. Reading between the lines, did the DOL consider FQHC to be non-governmental? There are also FQHC look-a-likes out there but I don't know much about them. I suggest you run it by the DOL if someone will talk to you. I bet they have thought about this. There are thousands of FQHCs operating.

Termination has different meaning to different players in the retirement plan termination game. For example, the IRS says a plan is terminated when the last penny of assets is distributed. The final 5500's due date is related to that date. There is not enough information to judge or opine here but there is a good argument that the plan was terminated for IRS purposes the day that stock, if it was the sole remaining asset, 'left' the plan. When it 'came back,' there was no plan to return to. it could come back to a brokerage account, but not to the plan. If the facts bear this out, there was no plan to return to. I am not sure from the question when that moment/day occurred when all assets were paid out. That is the year of distribution with all its reporting requirements.

It has been a while since I thought about this. My recollection from the early days of ERISA and how one should report income centered on avoiding confusion at tax time. I counseled clients starting new plans to get a separate trust identification number for new trusts. I have always told the new plan sponsor that this approach will ensure the trust's income does not get reported as income to the plan sponsor which could happen if the plan sponsor's EIN is used. I cannot think of a plan sponsor client that has experienced this kind of confusion, but that was the reason. Perhaps my clients didn't have this problem because they used a separate TIN. The exception to the separate TIN rule applied in cases where the trustee was a corporate trustee that used its trust identification number to hold and report earnings. More modernly, this issue hasn't come up for me. I have no single employee 401(k) plans The Employer Identification Number of the plan sponsor plus the three digit plan number were used for reporting in other than the investment matters.

Board resolution is enough for all the interested government agencies. You can amend later if needed as long as there are still assets in the plan's trust. Good luck!

I agree that he does not have to wait until after the close of the plan year to fund.

Agree with ESOP Guy and EBECathy. Must vest.

I am not sure how the facts play out here. If the contribution being made to the 403(b) is a non-elective/profit sharing contribution or match, it can be made to a 401(a) plan that exists to receive it for 2020. How about this sceario... Amend the employer contirbutin out of the terminating 403(b) for 2020. Set up a 401(a) plan in 2020 to accept the Employer contribution for 2020. Merge the 401(a) plan into the new plan or make the new 401(a) plan effective 1/1/2020 as to employer contributions. I admit to being somehat confused about these facts. Perhaps I am missing something. I don't thnk you can merge a 403(b) plan into a 401(a) plan. It would still considered distribution from the 403(b) plan. Hope tihs is helpful and doesn't stir the muddy water.

You don't want the DOL to get the perception that the client cannot be bothered with the final 5500 filing or even worse, the DOL perceives the clinet is disregarding the DOL. They will not go away until they have what they want. The folks in TEGE are a bunch of swethearts by comparison to the DOL.

Ray, I am a horrible typist too. I feel your pain.

I agree 100% with Luke Bailey. This individual is not a Qualified Individual. Spouse makes him or her a QI only if the spouse has tested positive for COVID-19 by a CDCP approved test.