R Griffith

Any estimate on the Highly Paid Employees that will have to Roth Catch-up Required Employees? Current level is $145K

I have never filed 5500's for the client, always made them log onto the system and e-file directly. However, I have seen the signature page filings on EFast. Since the client is supposed to keep an ink signed copy of the 5500 in their files anyway, I don't see just keep collecting the signature 5500 page is bad. You at least then know they have signed copy in their files.

I think you meant to say "no quid pro quo" - I agree, there are pros and cons, but I don't think you are doing anything unethically by hiring a client - would agree, might not want to mention your connection for fear of something for nothing. When you have local clients, it is always interesting when you interact in the "real world".

In order to truly correct, earnings on earnings should be done. That is how I have always done corrections. The idea is to make the participant whole, so they should have earnings through the earnings deposit day.

For recordkeepers that have managed accounts, gender is a piece of information that is useful for the life expectancy to determine how long the assets need to be available in retirement. While not a perfect fit, gender is also nice to have when someone calls into the call center and the name of the account is Nancy, but the voice sounds like Fred - that is a "flag" to watch for possible fraud. I was also thinking about beneficiary forms, but that has more to do with the collection of Married or Single information.

I would look for a company that can get you multiple quotes - so, you only work with one but you have several options for the Plan Sponsor to choose from. Sorry, I don't remember any names, but I have used some different companies that would do that several years ago.

Not necessarily that request, but I have seen the request to have only certain groups have auto enrollment. I don't see an issue with it as long as the document supports.

@EmilyS Sorry for the late reply, it sometimes takes me a while to get through the message boards. I agree with everyone above, but to answer your original question, you might want to check out the Plan Sponsor Magazine's annual benchmarking data - you will more than likely have to pay for that (if you company doesn't participate). But they provide a general all plan sponsor benchmark report, and then some specific industry benchmark reports - that will probably provide you the best source of data for what you are looking for - at least in terms of how many plans offer SHM vs SHNE. Good Luck in your data gathering.

Only the earnings would be taxable, if the deduction was truly an After-tax Roth deduction from pay.

You may be correct, but there also could have been a default election. For example, if you didn't elect to stay in the traditional DB Plan you were automatically moved to the Cash Balance plan. So, there may be no election form and you are where you are. I agree with Paul, go ahead and ask, but be prepared that there might not be any records. Each organization has their own retention policies, and I don't believe there is any specified rules/regulations about retention in the rules of retirement plans (other than the necessary information to determine vesting and eligibility benefits). Good Luck.

@jsample - I believe the OP mentioned seasonal employee, and most people would agree that seasonal is a service exclusion. But you are correct, you can exclude classes of employees. The one that I have heard debated is Interns - is that a service exclusion or class exclusion? I could go either way in my arguments.

Not sure if this is much help, but I just listened to an old ASPPA webcast from Derrin Watson on Control Groups and ASG's. It was mostly about identifying them and why they are important to know about. However, it might not hurt to give Derrin a call or e-mail and see if he is willing to help discuss. Even though you are an ERISA Attorney, is doesn't hurt to get some expert advise from someone more experienced. Good luck - I am not sure about the correction method either.

You might want to check with PEO and see if you can opt out of their MEP and have the laundry employees participate in your plan. I administer a plan that has an adopting employer, that uses the PEO for payroll and other purposes, but opted out of the MEP and participates in the plan we administer.

Something also to consider, since you mentioned Plan Termination. Participants will be required to take distributions, generally I have seen with Stable Value funds if participants request a distribution they will receive full value. It is only in the case where the sponsor is directing the distribution (i.e. force-out) that the MVA comes into play. I would discuss with the Stable Value firm on what requirements they are enforcing the MVA. You may be able to get all participants to request distributions and not have any force-out of the Stable Value and then no MVA in play. Stable Value companies generally call this benefit responsive distributions.

You can also amend the plan to allow for ECAR (Employer Contributions as Roth) and you don't need to do the in-plan conversion. Either way, you get to the same place. The only difference is that the client will have a taxable event in the ECAR or In-Plan Conversion versus the After-tax contribution to Roth.

I always thought this would be a great topic for a training session - we use participant all the time in our industry, but depending on the various situations it is defined differently. With the new 5500 rules, it is not as segregated, but there are still some subtle differences depending on the situation.

Thanks for pointing to the Secure 2.0 rule of excluding 401a9a - However, I don't necessarily agree with your first statement. With apologies to ASPPA - the below is from the EOB: 3.a. All amounts distributed during year are ineligible for rollover until minimum distribution is satisfied. Any distributions in a year in which the participant is required to receive a minimum distribution (i.e., a distribution calendar year) are treated first as satisfying the required minimum distribution for that year and, thus, are ineligible for rollover until the required distribution for such year is satisfied. See Treas. Reg. §1.402(c)-2, Q&A-7. This is true for distributions made in the first distribution calendar year, even though such distributions are not required to be paid until the RBD. Section 1.408-8, Q&A-4 of the 2002 Regulations and §1.408-8(b)(3) of the 2022 Prop. Regulations provide that the same rule applies to distributions made from IRAs within a distribution calendar year. While the above is focusing on Rollovers, I think the statement still applies that any distribution must first satisfy the RMD. So, the first taxable distribution could be taxed at 10% and doesn't have to be taxed at 20%. Once your RMD is satisfied, then all future partial distributions would be eligible for rollover.

Long time listener - first time caller... Not my issue, but a question came up in the office. Participant has Pre-tax and Roth 401k dollars. In 2024 the participant is turning 73 and wants to wait until 2025 for 1st time RMD. However, participant requests a source level distribution of only Roth 401k. Secure 2.0 states Roth 401k is not part of RMD. Regular RMD rules state first distribution from your 401k needs to be your RMD, if applicable. However, if you are only taking a Roth 401k distribution, would you need to take an RMD from your pre-tax money? Prior to 2024, I would agree that any distribution would be subject to RMD first. However, now that Roth 401k is not required to be part of the RMD, why would you need to take a pre-tax RMD first? Any guidance would be appreciated - maybe this is something that needs to be clarified or corrected?

I would look up Kelly Coffing at Milliman for information.

And the contribution does not have to be made before the testing can occur. You can test the contributions, and then fund them later. I am thinking they want the contributions posted before they do the testing - that is not required.

Is this regarding RMD's? It is my understanding that it is more beneficial for the participant to switch to the 2022 IRS Tables. There is no reason to continue with the old tables.

Don't forget the confusion that after age 63, the catch-up goes back the regular amount - so again the education for the participants. Especially, when they complain they can't do the higher amounts they were doing.

The firm I am at currently, does not charge fees for fund changes. However, the firm I was at previously, charged between $250 and $500 for fund changes. This was mostly as a disincentive to advisors that wanted to do changes every quarter or even more often. Sometimes it worked and sometimes it didn't (since the advisor does not normally pay the fee).

Per the IRS 1099R instructions: G—Direct rollover and direct payment. Use Code G for a direct rollover from a qualified plan, a section 403(b) plan, or a governmental section 457(b) plan to an eligible retirement plan (another qualified plan, a section 403(b) plan, a governmental section 457(b) plan, or an IRA). See Direct Rollovers, earlier. Also, use Code G for a direct payment from an IRA to an accepting employer plan, and for IRRs that are direct rollovers. Note. Do not use Code G for a direct rollover from a designated Roth account to a Roth IRA. Use Code H.

I would not predict another extension, as it seems the "world" is getting back to normal. Return to office is happening for many. I don't imagine it is difficult to find a notary to do an in-person at this time. However, you never know what the government will do. I didn't think the airplane mask mandate would be extended, which it was, before it was removed by the courts.