metsfan026

I have a client who is looking to stop allowing loans as of 10/01/22 (any loans already taken will continue to be paid off). Is that an issue or can the "benefit" be taken away from a participant? Thanks everyone?

Thanks! Since we're using the contributions as receivable I'll also go ahead with the loan repayments as well.

Quick Question. Employer made the 12/31/21 loan repayments in early '22. Would these be included as a receivable to the Plan? We do take receivable contributions into account, so just wanted to make sure that loans were handled the same way and not on a cash basis. Thanks!

Good afternoon! Have a potential client that's looking to setup both a DC and DB Plan. No issue in that, but where they are looking to invest the money is asking for separate EIN # for each Plan. Is that normal? Just curious, as it's not something I've previously encountered. Thanks, and sorry for all the questions lately!

If a DC Plan wants to amend the Normal Retirement Age (i.e. for 55 to 65), is that an amendment that can be done mid-year or should it wait for the first of the year? The question is due to vesting, as the Plan states that they become 100% vested at Normal Retirement (which the previous TPA set at 55). The second question is, I know a change like this can't have a negative impact (like when you amend the vesting schedule). Does that mean that anyone who is currently employed must still become 100% vested once they reach 55, or can it impact anyone who has not yet reached NRA (if a current employee is 54 and they amend the NRA to 65, does that mean that participant has to wait until 65 or to work the necessary years). Thanks!

Good morning everyone. Just a quick question, our document software defaulted to add the following when we entered to exclude part-time employees: "Notwithstanding the foregoing, any Part-Time Employee who is excluded hereunder will nevertheless be considered an Eligible Employee if he or she is credited with at least 1,000 Hours of Service during any Eligibility Computation Period beginning on or after his or her Employment or Reemployment Commencement Date and is an Employee on the last day of such Eligibility Computation Period" Is there an issue with removing this language? They want to exclude all part-time employees, even if they ultimately work 1,000 hours in a year, and they definitely wouldn't have a testing issue. Thanks everyone!

I again apologize for all the questions, as I'm trying to learn and help out in my office. When we have a DC/DB combo plan, the 7.5% Gateway (I know it can be less than this, but generally is viewed as the "Safe Harbor" comes exclusively into the DC Plan correct? I just wanted to make sure. Thanks!

One of my clients got a letter about prohibited transactions and the opportunity to correct via the VFC program. This stems from the accountant marking on the Form 5500 that there were delinquent 401(k) contributions/loan repayments. We've gone through making everyone whole, with charging the employer interest on the late payments. My question is what's involved in responding to the VFC program? Is it simply a letter aknowledging the deficiency and outlining what has been done to: 1) Correct the past issue 2) Prove that steps have been taken to ensure it isn't repeated Or are there actual forms that need to be completed (similar to the VCP program)? This isn't something I've done before, so I wasn't sure. Thanks everyone!

Yea, I clearly misread that! Sorry, 8(f) it is! I agree, including them as part of the gain/loss isn't accurate. I've seen people do it as well

This is the definition of 8(f) on the 5500-SF: The amount to be reported for expenses involving administrative service providers (salaries, fees, and commissions) includes the total fees paid (or in the case of accrual basis plans, costs incurred during the plan year but not paid as of the end of the plan year) by the plan for, among others: 1. Salaries to employees of the plan; 2. Fees and expenses for accounting, actuarial, legal, investment management, investment advice, and securities brokerage services; 3. Contract administrator fees; and 4. Fees and expenses for individual plan trustees, including reimbursement for travel, seminars, and meeting expenses. Don't think it fits there, so I guess I'll go with the 8(g) as an other expense?

Good morning everyone! Just curious how everyone handles management fees on the investments and reporting it on the Form 5500. I've seen a few different things, most notably: Include them as part of the Investment Gain/Loss - Line 8(b) Include them as "Other Expense" - Line 8(g) I'm not sure if it matters either way, but just curious since I've seen different things in the past. Thanks everyone!

Where would you insert this into the document? Would it go into the Force Out of Small Balances or the timing of Forfeitures?

Thanks! Let me see if I can get the language inserted into our documents!

The document just says Forfwiture occurs at the earlier of distribution or 5 years Is there something we can add to modify that?

I have a client who doesn't want to provide statements for terminated participants who are 0% vested, but have not yet been out 5 years therefore the money in the account has not yet forfeited (it's all Profit Sharing money). Is there something in the regs that requires statements be sent to these participants? Can someone point me to it, if there is, so I can provide it to the client? Thanks in advance!

Yes, I had originally ran them from 09/15, but just re-did it from 12/31 and everyone has a negative rate of return as per the custodian.

Got it, thanks! What do you think of charging the client interest on the late payment though? Assuming everyone had a negative rate of return, is it not necessary?

What else should I be considering? Just want to make sure the client gets this rectified quickly and correctly.

Got it. Do you agree that we don't need to add interest to make the participants whole, since they have all seen the value of their accounts decrease?

It was a 2020 required contribution, so it had to be funded by September 15

They missed the 09/15/21 deadline for their required contribution. Going to be making it this week, plus any interest owed to make the participants whole.

Have a client that missed making their Safe Harbor Contribution. Going to make the payment now, plus lost interest. The question is what interest rate should be used? Where the money is invested calculates the actual rate of return, and from the due date to today most of the participants have actually lost money (even though the Plan lost during this time, I don't believe we can't avoid making interest). Therefore is it best to use the VFCP calculator to calculate interest? Thanks!

Good afternoon! I know people can have Life Insurance in a Defined Contribution Plan. Is it possible to have it in a Cash Balance Plan as well? I just wanted to confirm. Thanks in advance!

I have a client who is an S-Corp. They get a W2, but also took what the call $70k in "distributions" as bonuses that are not included in their W2 for the year. The question is, do those "distributions" count towards compensation during the year or is it excluded since it is not part of the W2?

I think they are trying to hang their hats on compensation being "W2 compensation". I agree, but I'm just trying to make sure!