KaJay

Thanks for all of your responses!

I am working with a church that is in the midst of an EPCRS correction. One of the areas they are working to correct is failure to offer participation in the plan to all eligible employees. Per the written plan document, part-time employees must be offered participation. They are looking at needing to provide a 1.5% corrective contribution on behalf of these PT employees. The question the church has proposed is, "what if an employee refuses the corrective contribution?". Because they were never offered an opportunity, these part time employees are not enrolled. If refusal is not an option, and an employee is unwilling to complete an enrollment form, can the church just provide the plan with the basic enrollment information (name, ssn, dob, etc.) so the plan could open an account for the individual to accept the contribution on the employee's behalf? If refusal is an option, could the church simply receive a signed statement from the employee in order to justify not making a "full correction"? TIA for your responses.

There are no employment contracts or offer letters, just a statement that "all employees are eligible to participate in the retirement plan" in a section of the personnel manual (1998) - of which I believe has just sat dusty on a shelf and not referred to since its creation 20+ years ago. The only other mention of eligibility is within the 2009 plan document.There have been no amendments between 1998 and 2009. Based on the responses from david rigby and QDROphile, it seems as though there may be a stronger argument to use the plan document's criteria for eligibility.

An employer's personnel manual (dated 1998) states all employees are eligible to participate in the 403(b) plan. The same employer's plan document (2009) provides a default eligibility for employees working at least 20 hours per week. For employees working for the employer 2009 and beyond, which document governs participation eligibility? TIA for your responses.

Ellie, I am aware that churches are not subject to UA, as mentioned in my first post of this thread. Churches are subject to the terms of their written plan document, however, and their document established participant eligibility at 20 hours per week.

Thank you for your response, Luke. I do think the employer operated the plan how it now wants the plan to operate, but if part-time employees were never informed of plan, are you saying that the employer could argue "that employees were informed of the way the plan operated" based on the offer letters?

The employee did not waive participation in the plan, for example, by signing an "opt out" notice voluntarily declining participation. The employee was never informed of her eligibility to participate. Perhaps, one may argue that agreeing to the terms of employment with "no benefits" is an opt out? One may also argue that a deferral only participation class is not a "benefit" because it does not include an employer contribution or match. I am looking forward to reading others' thoughts on this.

A non-electing 403(b)(9) church plan has an employer with several operational errors. The employer is currently working towards submitting a VCP application. It has been identified by one person in this organization that part-time employees working 20 hrs/week or more were never given the opportunity to participate via salary deferral. Now, the plan is not subject to the Universal Availability rule, BUT the overall plan document indicates default eligibility for deferral participation as 20 hrs/week UNLESS an employer overrides this eligibility with a statement on its Employer Adoption Agreement in which they can raise or lower the hour threshold. This employer did not indicate a threshold for eligibility on its Employer Adoption Agreement. However, one of the individuals believes because the employment offer to one or more part-time employees stated there would be "no benefits" with the part-time position(s), he believes that there was not an operational failure to follow the written plan document. Is he right? Is this a case of "facts and circumstances" in which the employer could justify not giving an opportunity to participate because the employment offer stated no benefits would be available? Thanks in advance for your responses. KJ

I am most familiar with 403(b) plans, but it sounds to me as though there was a failure to follow the written plan document. I believe the employer (generally) has until the end of the second year after the operational error first occurred to make a full correction, some grace with this if substantially corrected by end of correction period...which would be the end of 2019 if errors first occurred in 2017. Otherwise, they need to use VCP. https://www.irs.gov/retirement-plans/self-correction-program-scp-faqs

Ok. Is the language the steeple uses when contacting A important? Meaning, does the steeple need to tell A they are "freezing contributions to A as of mm/dd/yy" rather than they are "terminating the relationship with A as of mm/dd/yy"? The word "terminating" is creating the alarm regarding the successor rule so to speak...

Thank you for your responses. Here's a bit more clarification: The church (steeple) is currently participating in "Denomination A's 403(b)(9) plan" [non-electing]. The steeple has requested to terminate Denomination A's services and start a new 403(b)(9) with Denomination B [non-electing]. My assumption is that upon terminating A's 403(b)(9) plan, the steeple is prohibited from contributing to B's 403(b)(9) plan for 12 months post distribution. Is that right?

Q: Do the final regs around terminating a 403(b), in which the sponsoring employer must "Generally, stop contributions...to any other 403(b) plan during the period that begins on the termination date and ends 12 months after all benefits have been distributed from the terminated plan" apply to an employer terminating its relationship with a 403(b)(9) church plan?

An active employee participating in a 403(b)(9) church plan wants to defer his unused vacation time to the Plan. I know there is a provision (Rev. Rul. 2009-31) that allows for active employees to have their unused PTO contributed to a 401(k), but I did not find such a provision for 403(b)s. The only thing I could find in respect to unused PTO being contributed to a 403(b) is via a post-severance contribution (Pub. 4482). Does anyone know if a 403(b) plan could allow for an active employee to contribute (either via deferral or arrangement with employer for a non-elective contribution) unused vacation and sick pay to the 403(b) Plan?

Mike - when you refer to a letter informing the plan of an updated mailing address for the deceased, in order to change the address on record to the updated one, does this letter have to come from anyone in particular? Meaning, does the sender need to be an appointed executor/POA/etc.-- Or, can it just come from a family member?

@david rigby, that is typically how it has been handled in the past. What happens in regard to filing or not filing taxes, and who is authorized to receive a refund if due, etc., does not concern the RP. The concern is simply "is it lawful to just send the 1099-R to a family member that has not been appointed to be the administrator/executor of the estate". Thanks for your responses!

The 1099-R will simply report the money that the participant (now deceased) already received in the year of death - to be used when filing taxes I suppose for the deceased. When there is not an appointed executor, it is unclear where we can legally mail the final 1099-R (reporting distributions made to the participant). Again, this is not a 1099-R for a beneficiary.

Bird, there wasn't any money to give. She had a single life benefit that terminated upon death. No remaining benefits to distribute.

Background: Deceased participant (widow) with no inheritable benefits Deceased participant's account was terminated upon death There is not a will in place Nobody has been appointed as "executor" A final 1099-R has been prepared for the deceased participant Question: Who can receive the final 1099-R for the deceased participant? If there is no official executor, can the retirement plan simply mail the 1099-R to a family member of the deceased? TIA for your assistance.

Background A participant in a 403(b)(9) retirement plan has requested a distribution. · The participant is a US citizen · The participant lives in Peru. · The funds would be wired to a bank account in the US. · The retirement plan has his SSN on file sourced from both his enrollment app from years ago and his recent withdrawal request form. Questions: 1. Because his SSN is on file and he indicated on the withdrawal form he is a US Citizen, is there any need for the plan to require receipt of a W-9? 2. If the participant was requesting the funds be delivered outside the US, would there be a need for the W-9? TIA for your responses.

Thank you!

In a 403(b) plan, we have a participant that exceeded the 2018 402(g) limit by $84. Since the time of the deposit, he has had a loss of $3 on the $84. There is some confusion as to what we send back to him and what is reported on 1099-R. Do we issue a check for $81 and report $81 on the 1099-R? Do we send him $81 and report $84 on the 1099-R? Do we issue a check for $84 and report $84 on the 1099-R since that is the amount he exceeded the limit by? Or something else? TIA for your comments.

Thank you!

Background: A Canadian citizen, living in Canada, has elected to start an annuity from his US based 403(b). He has requested that the monthly payment be sent to his bank account in the US, rather than be mailed to his home address in Canada. Questions: 1) Can the 403(b) plan treat the payments as though they were sent to a US person because the bank is located in the US and consequently apply withholding as though he is a US person? 2) If the payments were being sent to a residential address in the US for the same individual, does that change how we apply withholding? 3) If the answer to one of the above is that we can apply withholding as though he is a US person (married w/3 allowances), do the distributions get reported on a 1099-R or a 1042-S? Thanks for your help!