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Found 5 results

  1. 401k Safe Harbor Profit Sharing Plan with 1 Year of Service (12 mos 1000 hrs) wait, dual entry. Owner's wife started assisting owner Jan 2020 with business. When Covid hit in March 2020 her services increased significantly and remain so to current (1000+ in each year). Spouse was not paid in 2020 or 2021 but was paid W2 wages in December 2022 and permitted to contribute 401k as an eligible Participant in the Plan. It is not clear to me if there were financial reasons the business did not pay the spouse in 2020 and 2021, and not sure if that necessarily matters. Question: Though her prior services went unpaid, is the Plan permitted to count her prior years' hours of service for eligibility purposes? I have read through many articles that debate the fine nuances of this and a reference from an ASPPA conference Q&A from more than 10 years ago. I am hoping someone may know of something more recent. (if so, she would have been eligible 7/1/2021 with $0 415 compensation, no contribution due) The Plan defines Hour of Service as: "Hour of Service" means (a) each hour for which an Employee is directly or indirectly compensated or entitled to compensation by the Employer for the performance of duties during the applicable computation period (these hours will be credited to the Employee for the computation period in which the duties are performed); (b) each hour for which an Employee is directly or indirectly compensated or entitled to Compensation by the Employer (irrespective of whether the employment relationship has terminated) for reasons other than performance of duties (such as vacation, holidays, sickness, incapacity (including disability), jury duty, lay-off, military duty or leave of absence) during the applicable computation period (these hours will be calculated and credited pursuant to Department of Labor regulation ยง2530.200b-2 which is incorporated herein by reference); (c) each hour for which back pay is awarded or agreed to by the Employer without regard to mitigation of damages (these hours will be credited to the Employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement or payment is made). The same Hours of Service shall not be credited both under (a) or (b), as the case may be, and under (c). To note, the State exempts the spouse from minimum wage requirements. Thank you.
  2. A vested terminated participant has been taking RMDs the last few years from the qualified DC plan using the ULT table (the one that assumes a 10-year younger spouse). Suppose this year we are told that, all along, their spouse (and designated beneficiary) is actually 20 years younger than they are. Does that mean the joint table (with its larger divisor factors) is required to be used for determining the RMD? If so, was 20% mandatory withholding missed on the non-RMD portion of the amount distributed for the prior years because those amounts could have been rolled over?
  3. Does the primary beneficiary requirement that a spouse must be named unless spousal consent is provided also apply to "common law marriage" or common law spouse? The particular participant resides in CA as does the Plan. Thank you
  4. A U.S. 401(k) participant is married to someone who resides in India. Originally when she filled out the 401(k) beneficiary form she left the money to someone else. Once she was told that she had to get spousal consent to leave him off, she filed a new beneficiary form with the same beneficiary designating herself as single. What are the ramifications of this to the plan sponsor?
  5. I apologize, I don't have as much familiarity with DB plans as I do with DC plans, so if there is another thread that answers my questions, or website, or reference material somewhere, please point me in that direction. Plan Information Traditional DB plan, does not allow distribution prior to NRA, nor does it appear to allow for single lump sums( don't ask me why, its a convoluted individually designed document, I had nothing to do with it, it came to me that way). Normal benefit is regular single life, with 50% JS for married participants. Plan has several participants that need RMD - they can't locate them, or in some instances the participants won't respond. I suspect for some of the participants, if they received their RMD check in the mail, they would just cash it. The question is - the plan does not know the participant's marital status - on what basis do they calculate the annuity, and thus the RMD amount? And before you tell me to check the document, it appears to be silent. As I said it is individually drafted and not a typical one at that. We are getting less than clear answers from the actuaries and financial institution. The actuary isn't willing to calculate any sort of RMD without knowing marital status and Date of birth. The financial institution isn't willing to process any sort of RMD without participant consent, which I think is actually a separate issue that we are addressing, but certainly doesn't help matters. If it was a 401(k) plan and I didn't know the spouse date of birth (or even if there was one) I would just calculate and have the plan payout based solely on the participant's DOB. But the actuary doesn't want to calculate the RMD based on a single life annuity without actually knowing, so I'm a bit at a loss. Surely someone else has figured out a way to handle this?
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