Luke Bailey

Agree with Mike. They maintained it for 2016.

RestAssured, you certainly could, sort of. The plan would provide that beginning at 70.5 a participant was entitled to start receiving installments calculated as if they were RMDs. Details could get complicated in terms of both drafting and administering.

Agreed.

Depends. What you suggest, Mike, is more straightforward and easier to state, and possibly the only feasible way to do it with a preapproved document. If individually designed and large plan, classifying folks and then amending plan to give them higher vested percentages in line with what they would have if new rule walked back would be more forgiving administratively.

If plan allows after-tax as well as Roth, the SPD should state clearly that there is no advantage to doing after-tax until Roth bucket full, except for, in most plans, easier distribution rules for after-tax.

Mike, I think what BG5150 and I were suggesting is that you make your change to 250 hrs for everyone going forward, and then for anyone currently employed who would have higher vesting under that standard, if it walked back, just amend the plan to say they are 100% vested. You could even figure out what their vesting would be under the 250 hour standard for prior years, classify them by percentage, and amend the plan to provide for 40%, 60%, whatever their vested percentage would be, group by group.

I second BG5150's suggestion. Make sure you run through the applicable nondiscrimination rules in 1.401(a)(4)-5.

Austin 3515, 409A does not apply to 457(b) plans. See IRC sec. 409A(d)(2)(B). The 457(b) regs (see mainly 1.457(b)-7) don't have rules like the 409A rules that treat amendments in some circumstances as de facto elections, so you should generally be able to add distribution options such as those you describe. The distribution rules under 1.457(b)-7 are not as flexible, of course, as for qualified plan so you must carefully adhere to their requirements.

Bird, the business rationale is clear. Some millenials (and others, of course), even if responsible about money, find it hard to benefit from employer match because of weight of student loan debt. So employer figures, here is A over here, who doesn't defer and get match, but is in every other way (e.g., responsibility, quality of work, and my overall desire to keep him or her as an employee) equally worthy of getting tax-sheltered matching contributions as B, but A doesn't contribute because hasn't got sufficient funds left over after paying student loans. So my match doesn't incentivize A. Aha! I make matching contributions for A as if his or her student loan repayments were 401(k) deferrals. I think it's a great solution where it fits. Has some payroll complexity, of course.

bmore1147, I apologize. I thought (not very carefully, I confess) that you were using QNEC as shorthand for any nonelective contribution to K plan. The amounts in question would not have to be and would typically not be QNECs, but rather simply nonelective contributions that could be subject to vesting and the distribution restrictions applicable to nonelective contributions as opposed to QNECs. Glad you caught that.

chc93, yes, but not a lot.

For what it's worth I would have thought that the 5500 definition of participant applied, so eligible without account would get. But just guessing. Since they MIGHT contribute in future, they could have an interest in knowing how existing assets managed.

How is "participant retirement" defined in plan document?

Assuming a DC plan and the participant was never required to take RMDs, I would think that the prior distributions were not RMDs, in fact, and could be stopped, because the participant never actually had a required beginning date. Maybe there is a rule in 401(a)(9) I missed on this. If that's the case, I'm sure someone will point it out.

Your vesting cannot be retroactively reduced, but in the (seemingly very unlikely) case that the first provider was wrong and the second has corrected the records, that would not be a change.

Austin3515, perhaps it's not clear cut because there seems to be little employee interest in or DOL enforcement of the SAR rules.

Debbie A., I think the above gives you your answer re "seasonal" and the limits of 410(a) exclusions, but note that, at least in theory (your preapproved plan may or may not permit), you could exclude "lifeguards," or "lifeguards position A," or "lifeguards at pool B," or whatever, and that would be ok. Then an excluded lifeguard would be excluded regardless of his/her hours, even if it were the case that the excluded lifeguards' hours tended to collect demographically at under 1,000 hours.

It's certainly traditional and widespread, and we have all assumed it's legal. Similar policy choices are baked into social security as well, e.g. nonworking spouses get half of working spouse's soc sec while retired worker lives, then 100% after his/her death. Single and married worker paid same soc sec taxes, and so on. I doubt whether you could mount a case based on fed or state employment discrimination laws, since these are based on sex, age, disability, etc., and although some of those are related to family formation, the relationship is only close enough for sociology, not law. You could try a constitutional challenge, but don't see much of a basis as atheists marry, have kids, etc. Equal protection clause not applicable for private plans, although a state or local government worker might try that. But as david rigby noted, you are not directly harmed, so may not have standing. (Yes, I understand that you could argue that if the employer could not subsidize families, would spread the money around, not pocket it, and you would get some, but that is probably too speculative to give you standing.) While I admit it's close to paying someone more if they are married with nonworking spouse, and/or have children, which we would all find inappropriate, how finely do you want to chop this? Under ACA there are 5 age bands. How about 45? How about bringing back preexisting conditions? Underwriting for lifestyle choices? It's called insurance for a reason, after all. Final note: nlrln, what you describe is, in my experience, fairly rare these days. Most employers will require employees to pay family premiums, usually pre-tax through Section 125 plan.

1. Yes and 2. Yes. Since contributions will be based on student loan repayments, will not bear any sort of direct relationship to pay or other typical factors. Will need to general test.

401(k)athryn, you have received excellent advice above. As you can see, there is unlikely to be a clear answer and it is probably not your role to have to take the risk on this. Punt if you can.

Thanks, Below Ground. Appreciate it.

dmwe, you can make your own contributions as an individual to HSA. See IRC sec. 223(a) and Pub. 569, beginning on page 2. The amount you can contribute is reduced by whatever employer contributes under 106(d). See. IRC sec. 223(b)(4)(C).

Just elaborating a little on what spiritrider and QDROphile say above, but sure. The hardship distribution will be includible in your gross income (except to extent, if any, attributable to any Roth basis), and 10% premature distribution penalty may apply if you're under 59-1/2 (but see exception in Section 72(t)(2)(B) to extent total medical expenses exceed 10% of your AGI), but the money is otherwise yours once distributed and you could use it to fund an HSA contribution and get a deduction for that, assuming you are covered by a high deductible plan and the contribution is within applicable limits.

It seems clear that the IRS does not care which type of contribution you distribute. The LRMs specifically allow you to have Roth first or pre-tax first, as I recall. In theory you could have plan language that would give participant a choice, or, better, have plan language that says employer will adopt a policy, and then have the policy give the participant a choice, but in plans that we have advised where plan sponsor wanted to provide participant-by-participant choice, we have had pushback from bank or mutual fund company recordkeeping plan saying that it was not administrable (e.g., you would need to determine which participants had Roth and get them to make election by 3/15), so we have usually put "pre-tax first" in policy. It's tricky, because on the one hand you could assume most participants would rather get back the money they were taxed on, so that their personal income tax planning for year is not upset, but on the other hand someone who made decision to do part of deferrals as Roth probably viewed that portion of their deferral as having higher future value.

Bird, good point re DB plans. May be why they don't check.