CuseFan

So to piggyback Bird - you don't need a separate statement showing all the brokerage account information but do need to communicate those necessary annual items that might otherwise have been on a statement.

Loans are part of the participant's account balance, (usually) just a directed investment, so I don't know how that can be "on the fence" in terms of statement presentation. However, if they get an annual statement on just their loan from some source, you're probably covered. You mention brokerage statements for those fully vested - so you give statements off your system for those not vested but then stop once they're vested? That seems odd. Also, does the obligation to tell someone they're fully vested go away after you tell them once? I don't know, but just throwing that out there as well. As you note, lifetime income disclosures will likely change that landscape regardless.

Correct, not an issue to exclude HCEs prospectively. But if this person was in the plan for one year and created a failure, how did you deal with that? Or did you pass on average benefits but the plan sponsor would prefer not to incur the expense of having to run that test each year?

My position is that we inform the client (on the record for CYA purposes) of the reasonable compensation requirement and that it is up to the client, hopefully with formal input from their accountant and/or legal counsel, to determine reasonableness. If it flies (with or without subsequent scrutiny) then great, and if it doesn't you have the "I warned you/I told you so" in your defense - not that a legal defense is needed. And YES - that is always sound advice!

His TPA is wrong.

I see that. Will be interesting to see how far he gets.

When did compensation and contributions cease? I think that would be the relevant end date for testing.

Not getting in the middle of all you American Leaguers as I'm an NL guy, but when I first saw the new name I instantly thought of the Guardian Angels. I mentioned them to a colleague in his 30's (I'm late 50's) and provided their website and, no surprise, he never heard of them. To my surprise, they're still around. Anyway, instead of the typical baseball cap, the new Cleveland Guardians can wear red berets. Wondering who else remembers Curtis Sliwa & company from the 80's? Among the younger generation the name Guardians more likely conjures up images of Guardians of the Galaxy - maybe their new mascot can be Groot!

The impetus is on the participant to keep the Plan Administrator informed of whereabouts. DOL "aggression" is targeted at missing participants when benefits become due and payable, basically NRA and/or RBD. If a plan had optional early retirement at age 55, it wouldn't have to find and communicate with all TVPs upon attainment of age 55. I'm sorry I do not have a suggestion for dealing with what has already occurred other than "too bad, so sad, now you know why you should make sure we have your updated address." For future reference I can tell you that our window amendments now always have as an eligibility requirement that a participant must have an updated/correct address on file with the Plan Administrator and the PA is not responsible for missing participants/bad addresses - basically a CYA provision.

Plans can and often do exclude non-resident aliens with no US-source income, and those are permitted statutory exclusions (like union, under age 21, etc.). Plans are not required to do so. Could a plan exclude non-US citizens regardless of resident status and US-source income? Yes, but such would not be statutory and would be included in the denominator for your coverage testing. If this population is small relative to the employer that is not likely to be an issue. If the plan sponsor wanted to include such employee(s) in the plan then that is permissible but then they have to deal with the complexities for distributions if any employee is then out of the country when paid. I do not know the IRA allowances/prohibitions in similar instances.

What about using 83 hours in December 2020 for a special 1/1/2021 entry and then going to 12-month 1,000 hour rule thereafter? That might limit (most of) your early entries to full timers. Or 167 in Nov/Dec? Or 250 in 4Q2020? You get the picture.

You can pay an AP immediately if the terms of the plan allow (e.g., an option in the FTW VSP is ability to QDRO in lump sum in any amount at any time - i.e., no limitations, unless you have 436 or top-25 HCE restrictions). IMHO, if the QDRO says AP gets X% of account balance then AP gets X% regardless of the assets and independent of any benefit/account balance the AP has accrued under the plan as a participant. AP may or may not be able to get this distributed immediately, depending on terms of the plan and funded status. AP as participant cannot get her individual account balance/accrued benefit unless employment terminated or otherwise eligible.

Since first year, is there ability (and support in plan document) to pull out excess employer contribution that is not deductible, either on mistake of fact (insufficient compensation) or on the failed contingency that it is deductible? Not sure if/how this works if tax return has already been filed with the excessive deductions.

You cannot exclude solely based on "scheduled to work...." and must include PT et al if and when any such employee completes 1000 hours in an eligibility computation period.

Similar to an article on Mitt Romney years back, again putting Roth IRAs back in the news and framing (again) as an abusive tax loophole for the rich. If they didn't want rich people to shield billions from taxes via Roth, they should have put an accumulation cap and brought back the excise tax on excess accumulations.

Any solution that utilizes a qualified plan to direct additional amounts into Roth that would otherwise not be available through Roth IRA or 401(k) can be referred to as a "back-door" Roth. However, use of after-tax voluntary contributions typically works in only two situations: owner or HCE only plans where nondiscrimination testing is not needed or very large corporate plans with generous matching contributions that can satisfy ACP testing.

and if no filings are made, what are the ramifications? the plan sponsor no longer exists so there is no responsible party to go after. not filings 5500's does not DQ the plan and taint the distribution paid to last man standing. I would just walk away and let it go.

So first, I would not use "eligible" in any of the above descriptions because you're excluding these employees from being classified as eligible employees. All are permissible classifications but the second two need some clarification - the $75,000 needs a defined time frame (look-back year?) and further defined - is it $75,000 in compensation, and is it gross, plan, commission income or base pay? Why are you concerned with BRF? You need to satisfy coverage for whatever plans/portions of plans you want this exclusion, and if you can satisfy coverage for that then BRF won't be a problem.

Coverage & Nondiscrimination Test. I interpret consistency from year to year as all years in general but don't know if you must lock it in forever. If you changed methodology to B after using A for say 5 years and then continued with B for a number of years, that might be OK. I don't know how IRS would even monitor as I don't recall them ever asking for the NDT over multiple years. Consistency among all participants and all aggregated plans is required regardless.

From the C&NDT answer book: Apparently either method is valid. It is the position of the IRS that a plan may use attained age (as of last birthday) or age nearest the testing date for purposes of the general test, as long as it is applied in a consistent manner from year to year. If nearest age is used, the equivalent benefit accrual rate (EBAR) for participants born in the first half of the plan year is reduced by one year's worth of interest when compared to using age last.

You are correct - seek and ye shall find!

They can be excluded if they do not benefit by reason of being terminated and having less than 500 hours. If they benefit, or there is not a last day and hours requirement then that exclusion does not apply is my understanding.

Agree with CBZ - reallocate means within the DBP, and you need to first revert to be able to then transfer to a QRP.

CCA also sponsored a webinar in September 2020 on COVID and Retirement Plans. One slide estimated a 25% increase in 2020 mortality (deaths) but then estimated the surviving population would experience 25% lower future mortality as a result of improved health behaviors - survival of the fittest in a sense. However, as we know, this is all unevenly distributed across geography, race, socio-economics and unfortunately with vaccines, politically, so how it truly impacts future mortality for the country and retirement plans in total remains to be seen. Another slide had the following, indicating any COVID impact on lump sum rates would be realized until 2024: Mortality Improvement Scales •MP-2020 scale will include population mortality data through 2018 •COVID experience would first affect scales in 2022 •According to recent process, scales developed in 2022 would affect 417(e) lump sums in 2024 Hope you found this both interesting and helpful.

You could continue looking at hire date anniversaries for the subsequent eligibility computation period, there is no requirement to shift to the plan year.