CuseFan

True, you could still be named beneficiary. However, some plans automatically invalid an ex-spouse as named beneficiary upon divorce. Also, many pension plans only pay a survivor pension to the spouse of a deceased participant, which would preclude payment even if you were named as beneficiary. Step 1 - inquire/make a claim for benefits from the plan and that may be all that is needed. If denied, step 2 is the QDRO and I would be fully prepared to continue/complete that process (which is allowed even after participant dies). Qualified retirement plans have specific rules and provisions they must follow, including recognition of beneficiaries, payment of death benefits and complying with QDROs - you just need to work with the Plan's Administrator and go through the process to get your benefits. Good luck.

No. You do need to communicate to participant(s) the plan is terminating including a 15-day advance 204(h) notice unless issued before if plan was previously frozen. A letter works, or you can use the PBGC format Notice of Intent to Terminate just for ease. Then your 30-day (or more) distribution election period. That's basically it. Of course, make sure the plan document is up to date for current law.

Individually designed plans of any kind are no longer on any cycle - previously they were on 5-year cycle. Interim amendments are generally sufficient. Major design changes or a series of substantial amendments would ultimately require restatement, but absent a major law change that probably rarely happens.

Q1 - cannot undo SEP as far as I'm aware. Also remember you cannot have another (qualified) plan if using the IRS model Form 5305A-SEP. Q2 - yes, you could deduct $30K DB in 2019, and then $170K in 2020 if room for such under the rules. Be sure not to physically contribute more than $30K to DB during calendar 2019 and be sure that the 2019 total MRC is deposited by 9/15/2020. The $70K deposited between 1/1-9/15/2020 should be clearly labeled required contribution for 2019 deducted in 2020. Any SEP contribution must not exceed 6% of eligible pay in 2020, and if you're not sure what pay will be it's best just to stop funding the SEP or wait until after year end.

Eligibility computation period begins the date employee first performs an Hour of Service, regardless of the effective date of the Plan, so by 12/31/2015 both Joe and Sue completed a year of eligibility service. Did they lose that service due to break in service rules? Clearly not. Were they employed on their first entry date following completion of eligibility requirements? Yes, both employed on 1/1/2020. Plan provisions should be fairly clear on this as well as vesting.

I had a large client years ago where this happened occasionally. I think you have to stop the payroll withholding and let the loan default. Remember, there is no statutory requirement that loan payments be made via payroll withholding, that just happens to be this plan's (and many plans') program. Some plans - like those using the MyPlanLoan product - have moved loan administration out of the employer's/payroll's hands into a third party direct billing system managed by the TPA/RK. If the employee takes a loan and then fails to make the payments, the loan defaults and gets reported.

Technically, I think you can only increase NRA with respect to future contributions or future participants but cannot uniformly increase for everyone and all balances now even though the actual impact on participants and administration is nil. It would make practical sense that should be able to amend because of that, but would that argument hold up with IRS? Employer may want 65 to present that as an expectation to employees in its written materials, rather than age 60, which is this only possible reason I could think of for wanting to amend. In that case, amending for future contributions could accomplish that message. Unfortunately, as is often the case, I think it's a matter of form over substance - but maybe this Administration's kinder, gentler IRS would accept substance?

Probably so the rules are uniform across plan types, and also not all defined contribution plans are participants directed quarterly statement varieties.

Agree completely. Fiduciaries can obtain personal liability (E&O) coverage for their breaches and mistakes, to cover their personal liability to the plan, but that is different from ERISA plan bond that protects the plan from dishonesty among those who handle assets (but not the identity thieves who dupe them). Cybersecurity is a huge issue and scammers have been attacking retirement plan accounts because the oversight and diligence is typically not up to the level seen at banks and credit cards, and perpetrated frauds can often go undetected for a much longer time because many participants do not regularly look at their accounts. I know RKs, including our firm, are banding together and sharing best practices and other important information on attempted hacks to safeguard our industry and our clients' retirements. Personally, as someone who has been paranoid about security and identity theft for a while, I look at bank accounts, brokerage accounts, IRA, 401(k) almost every single day. My wife thinks it's to keep tabs on her spending - but I assure her it's not (well, maybe just a little).

Circling back to the being a good fiduciary question, if he is personally able to invest in what he is also investing plan assets in - say retail mutual funds for example, if institutional class or collectives are otherwise available - it could be a potential issue. So yes, absent any conflict of interest, what he invests in outside the plan is no issue but he needs to make sure plan investments are prudent and expenses reasonable.

Be aware of potential 415 control group - if person owns more than 50% but less than 80% of multiple companies, there is not a control group for 410(b) or 401(a)(4) purposes, but that person has aggregated 415 limits among all DC and DB plans sponsored by such entities. If X owns 51% of companies A, B & C, and a different unrelated individual owns the other 49% of each then there is no control group but X has one $56,000 DC 415 limit and one $225,000 DB 415 limit combined among any plans sponsored by A, B & C.

Employee is/is not benefiting based on plan terms - if 1000 hours is required for an accrual, then not benefiting. Even with the holdout rule (which you can't 11g in) at 9/1/19 they come in retro to 9/1/18 and you still have a 2018 issue. So this RH is not a statutory exclusion and so your NHCE coverage is 50%. You say there are 4 HCEs with 1 excluded - but is that a statutory exclusion, a plan exclusion or otherwise just not benefiting? Because if statutory exclusion (including term <500 hours not benefiting) then your HCE coverage is 100%, not 75%. If your coverage is 67% then you can see if plan passes coverage using average benefits, possibly aggregate with a DC plan if plausible, or 11g an accrual to the rehire.

So, if one-time irrevocable election - not a salary deferral, but an "employer" contribution so still counts toward 415 limit. This is also the case if such contribution is a condition of employment. I have a client that requires all employees upon becoming eligible must, as a condition of continued employment, contribute 5% of pay to the plan and such amount is not considered a salary deferral for plan purposes (not sure about payroll tax purposes). Otherwise, salary deferral and all the baggage that goes with it.

I would do a missing participant-type search on the spouse first. As noted above, it is a statutory benefit for the spouse, and if spouse later appears looking for a survivor benefit, it is likely the plan gets sued for such not the participant.

Companies B & C are domestic subsidiaries of foreign parent A and in a control group. B is not profitable and sponsors an under funded frozen defined benefit plan for its employees. Can sponsorship of this plan be transferred from B to profitable company C such that C can make (tax deductible) contributions toward funding benefits for B's employees? If they were unrelated, I think clearly the answer is no (exclusive benefit rule), but OK for a control group, yes? First thought is why would C be allowed to make contributions for another company's benefit but as part of the control group, if B goes under then C is also on the hook with PBGC for under funding, so why shouldn't C be allowed to fund. If B did fail, or was sold (asset sale) with plan staying behind, C could pick up sponsorship, right, so why not now? Should B remain as a participating affiliated employer, since it still exists and its employees are the participants? I would think so. I also think language should be clear that all contributions from affiliated employers are available to fund benefits for participants employed by any and all participating affiliated employers.

Mike is spot on, and how the participant might think that is unfair is beyond me. The payment option can only be changed if plan terms permit and grant a new annuity starting date.

I'm not an ESOP aficionado (there is an ESOP Guy who regularly contributes in this forum) but I know you do not need to offer shares at distribution and limit share ownership to employees only if corporate bylaws provide for such.

Clearly the design is to allow Pharmacists and Managers into a plan early while keeping everyone else out for a year. Unless a P or an M is hired in as an owner, they would not be HCE for their first year of employment, so why not have one plan where that subset of defined employees (still NHCE at the time) is allowed immediate entry? If you have to aggregate for coverage and NDT, because the Ps and Ms are HCEs, isn't there then a BRF problem? Fishy is an understatement.

Yes, you must protect required provisions with respect to transferred benefits/accounts. Depending on your AA, or more likely the basic document, maybe that is an automatic w/o the need for additional language. If not, there is often a protected benefits addendum on a typical AA or you just use the other provisions addendum to either itemize your protected provisions or (probably not the best practice) state those prior plan protected provisions are incorporated by reference. Any way you slice it, you're probably outside adoption w/o modification unless the protected provisions are also available options in your AA, but don't apply to prospective accruals.

Interesting in that you mention cash in a sinking fund to cover repurchase LIABILITY. So if the company is expecting to shell out half a million dollars, for example, to buy back the shares of upcoming retirees, yes, that cash may be an asset but it is offset by the expected repurchase liability. As EG noted, it's up to the valuation firm to sort out, but the presence of an asset does not necessarily translate into ownership equity.

Also remember the IRS recently reiterated its position that the timing of a participant's negotiation of a check does not impact the timing of its tax treatment. So for IRS purposes you have a 2019 taxable distribution. I find it hard to believe then, that the uncashed/delayed cashed check is still a plan asset in 2019. If it was lost, returned as undeliverable, etc. such that the participant never received it, then that may be a different story and the DOL position is likely you still have assets. Any participants who think delaying their check cashing into next year will also delay tax liability should be reminded/educated otherwise.

A retro amendment to allow early entry is permitted, not required. The plan may contain language already regarding the treatment of an employee mistakenly included, but I think a return of deferral contributions plus income and forfeiture of any employer contributions is perfectly acceptable.

I don't think they can do that, and the employee cannot even voluntarily waive the contributions. Hopefully not everything is finalized - what should have been done is have the total settlement include and subsequent payment be offset by the 2019 contributions. Maybe the settlement agreement has some offset language already. Or maybe the employee (and/or lawyer) was very knowledgeable and agreed to the settlement knowing contributions would have to be made regardless. Just highlights the fact that all the employment related issues should have been/need to be thoroughly examined and discussed with qualified counsel for each (not necessarily legal counsel) before agreements are finalized.

It is not employees - it is active participants.

Mike, what if first year of (new DB) plan has an accrued contribution >$250,000, or say $200,000 but there is existing DCP with $200,000 - do you not file because the DBP has zero assets in its first year on a cash basis and then begin filing in year 2?