kshawbenefits

That's what I thought. I think the answer to my question is in -3(c)(6). The client wants to exclude the division entirely while retaining SH status for the parent company plan. My conclusion is that it's a no go for retaining SH status; have to determine if they can pass testing while excluding the division. Thank you for your help!

Now I am sort of answering my own question, but after looking at the regs cited above, wouldn't I actually be looking to Reg. §1.401(k)-3(c)(6)(i) to answer the question of whether the employees of a specific division can be excluded from a safe harbor plan?

I am assuming that you mean the SH 3% contribution, not the match.

The group that would be excluded would be excluded for all purposes including deferrals.

Can a safe harbor plan exclude the employees of one member of a controlled group? Can the plan be separated into SH and non-SH?

Thanks everyone for your thoughts!

Should an investment committee have a special process for adding a target-date fund to a 401k lineup, and possibly using it as the QDIA? A client is being told that it should take the extra step of having its investment committee interview the managers of the target-date funds under consideration. I haven't heard this before. Any thoughts appreciated. Thanks.

Does anyone have any updates on this topic? Have the FSA limits been announced officially?

I am assuming that when you say "elect" you mean that the plan documents include statements that they will comply/be subject to 401(a)(13), 411 and 414(p)? Is there some other formal election? I am not aware of any.

Client is a religious organization with both 401(a) and 403(b) plans. Participant terminated employment and requested distribution- the distribution was delayed because of an incorrect address. During the delay period (i.e. after the distribution would have otherwise been made but before it actually was), the plan administrator received a consent order for a pending divorce. Neither the sponsor nor the administrator (which is a MAJOR provider) seems to have any written QDRO procedures for the plans. Just a practice where the administrator generally receives a DRO and the plan administrator approves it. Any thoughts on whether the plans are satisfying 414(p)(6)(B)? Or whether the distribution should still be made? Given the financial situation laid out in the consent order, there is a chance that the spouse would get the full benefit available under one or both of the plans.

I have a similar situation to these facts- prototype plan; mistake made in PPA restatement; the system-generated participant communications (including safe harbor notices since 2016) picked up the error. For those who have successfully argued in VCP that a retroactive amendment is appropriate, what types of information have you included to show the plan sponsor's intent? Prior plan provisions? I am struggling with how to prove the negative (i.e., that the plan sponsor did NOT intend to revise the plan). Thanks!

The error was in both the Plan document AND the SPD, so I don't think we have good facts, but the client wants to try. I am reading Section 10.08(c) of the EPCRS procedures in Rev Proc 2016-51 to mean that we could revise the filing if the IRS rejects our original correction proposal, but any thoughts would be appreciated.

An error was made in a plan document, which resulted in the omission of a year of service requirement for matching contributions. Client is asking to submit VCP filing asking IRS to approve a retroactive amendment, or to approve the calculations for making up the missed contributions. Can you submit alternative correction methods in one VCP filing for the same error? Essentially, "if not this, then that"? Thanks.

401_noob, I am not sure that I would interpret the guidance in 2016-16 the way that it is described in the technical update. I think it is an aggressive interpretation. Thoughts?

The more I look at the issue the more that I think that it is referring to crediting and not eligibility.

Agreed- I would prefer that the client wait but we are looking at all options.

Thanks. I saw that example. My concern is that the example refers to entry dates specifically. Even though the amendment in Example 7 would make an employee wait longer to get into the plan by reducing the number of entry dates, it is not the same as adding a year of service requirement....

I guess the question is whether the IRS is referring to narrowing the class/number of employees who are currently eligible vs. those who may be eligible in the future. If it is the former, then I agree you could not amend the plan to add the year of service requirement. But, if it is the latter, then I think we can add it prospectively for new hires.

Client has a safe harbor plan that currently states that employee is eligible for safe harbor match as of the entry date following completion of first hour of service. Under Section III.D.2. of Notice 2016-16, can you amend the plan PROSPECTIVELY mid-year to require NEW employees to complete a year of service before becoming eligible for the safe harbor match? I believe that the guidance allows it, but I am curious as to whether anyone has done this. If yes, does client need to provide a new safe notice to existing participants? Thanks!

Under Section III.D.2. of Notice 2016-16, do you also agree that it is permissible to amend the plan mid-year to prospectively require new employees to complete a year of service to receive the SHM?

A client's employee is going through a divorce, and HSA assets were divided. The former spouse set up a new HSA to receive her share of the funds and to make future contributions. The employee is being told by the bank that holds his HSA has said that they will only issue a check to the former spouse directly, and not to the institution where she has set up her new HSA. Does anyone have any specific guidance on this issue? Thanks in advance.