metsfan026

Question regarding the termination of a Cash Balance Plan. Obviously, like most plans, the assets are down in '22 so now that they are looking to terminate the Plan they are roughly $20k short of the balances earned to date. That said, the only participants are the owner and his wife. Is it necessary for them to make a contribution in order to bring the balance up to the earned balances? Or can they simply distribute the money that's in the plan? Thanks everyone!

It was Hurricane Ian, but she was just visiting at the time. It's not where she lives, so I assume that means she's not covered as a hardship?

Are there any special rules in terms of hardship distributions and the impact of a hurricane? The participant is looking to use the money to fix her car, due to damage from a hurricane. However, by the letter of the law, this wouldn't qualify as a hardship. Before we just rejected the request, I wanted to be sure there wasn't a special exception out there.

That's what I thought, but as expected the client is balking at that. Thanks!

We have a plan that terminated and distributed all of the assets. Unfortunately a residual dividend came in, despite the money having been liquidated into cash. It's a small amount, so what's the best way to handle this without having to cut everyone a $0.50 check? Can the plan sponsor issue an invoice to the Plan for mailing, etc. and pay it that way?

We have a new client that just realized that a '21 Matching contribution was missed for a few participants. The question is do they need to also add interest for the late contributions? I believe that since the market is down, that no interest was needed since the participants have actually benefited from not being invested in the market. I just wanted to confirm that the stance was accurate. Thanks!

Are distributions from a 457 Plan processed through payroll? That's what someone is telling me, I just wanted to be sure

It is a self-insured plan. So, based on this, pre-authorization would not be required correct?

I'm not someone who processes claims, but we help administer a few plans. The TPA denied the following services, saying that they needed to be pre-authorized. My question is, with the The Newborns' and Mothers' Health Protection Act of 1996, I know that says that pre-authorization is not needed for the 48 or 96 hour hospital stay in regards to having a baby but do these services also fall under the no need to pre-authorize: Thanks in advance!

I believe I know the answer, but I wanted to confirm: For a Profit Sharing Plan for the RMD to be taken in 2022, we obviously use the 12/31/21 Balance. If a receivable is made in '22 for the 2021 Plan Year is that included in the balance used for the calculation? Thanks in advance!

I just wanted to make sure that I was reading the regulations correctly. If someone participates in both a 401(k) and a 457 plan, they can max out their contributions in each ($20,500 + $6,500 catchup) if their compensation allows it, correct? I know with a 401(k) and a 403(b) the $20,500 is total between all plans, but I believe I read that 457 is completely separate so you can max out in both simultaneously (for a total of $54k). Just wanted to make sure I was correct

Nope, it's a 1-person plan. He does own a stake in another company, but him and his partner own around 50% of it so there's no Control Group issue. Assets are only around $45k, so that works. Thank you!

Thanks! Since it's an EZ and he's under $250k in assets, there is no Form 5500-EZ requirement for now correct? I just wanted to make sure I had that correct as well

We have a consultant who came to us who wanted to start a 401(k). Technically he doesn't have a company, it's just him getting 1099 income for consulting. Can someone under that circumstance start a solo 401(k) Plan and file it under their SSN? For some reason they don't want to do a SEP (haven't gotten a straight answer as to why). Thanks!

Quick question regarding the PBGC payment. I know it's due by 10/17/22 this year, my question is: 1) Does it have to be received by the PBGC by that date or 2) Does it have to be postmarked that date Thanks! Have a few that waited till the last minute, so have to let them know if they have to overnight the check or just get it in the miail

Taking over a C-Corp with two employees: 1) Owner of about 95% of company 2) Employee with about 5% ownership in the company There is no relationship between the two. The previous TPA had been filing the Form 5500 as an EZ. Would this qualify for that, however? Unless that type of ownership would classify them as a "partner", I don't see it but I just wanted to confirm. Was planning to switch it to an SF, but wanted to confirm. Thanks everyone!

Thanks! I'm trying to determine if it is actually a controlled group currently: Company A - 100% owner Company B - 50% owner currently. He's recently divorced and his now ex-wife still owns 50% of the company Is there any attribution with his ex-wife, or since he doesn't own 80% of both companies?

If a client failed to divulge that they own multiple companies (they are unrelated, but he is the 100% owner of all of the corporations) and it's not discovered that it should've been a controlled group. What are the ramifications? Is there any back correction that is needed?

So just to confirm, with that selected there's no true-up, correct? Just want to make sure there are no mistakes.

Ugh, painful! So if the document says it is funded on a payroll-by-payroll basis (which it does), we can just move on. Thanks!

Good morning! Just want to make sure there's no issues with another Plan we are taking over: 1) They fund their Safe Harbor Match on a payroll-by-payroll basis. If someone opts to start contributing in the middle of the year, can they simply match from that point forward (calculated on a payroll basis) or do they have to do the calculation on the full years salary and true the participant up? 2) The prior TPA allowed them to include commission compensation for the sales staff, but exclude it for everyone else. Is that something people have seen before, where the definition of compensation is different, based on the class of employee? Thanks in advance everyone!

In general, is there an issue with correcting the test by refunding one participant enough to get it to pass?

Have a potential new client that just came to me with a failed ADP Test. However, the previous TPA did not make any type of correction to the test. Now we are left trying to figure out how to proceed: 1) Is this correctable via the VCP program? 2) In order to correct the testing, can we refund one participant enough in order to pass the testing? 3) What liabilities, if any, are there to the company? 4) What penalties could the Plan face?

Perfect, so there's a limit on the highest but we can go lower. So if it's 3.75% interest rate, that's not going to be an issue?

Generally we use 5% when setting the interest rate for Cash Balance Plans, but we have a prospective client that is looking to have it at 4%. The question is, is there an acceptable rate to use as per the IRS? I tried to do a search, but couldn't find an answer. Thanks!