An employee is stating the recent legislation (Bipartison Budget Act of 2018) allows the participant to request a hardship for elementary and high school education expenses. Am I correct that we are still waiting for IRS guidance on the Bipartison Budget Act of 2018, it's not effective until 2019, and plan amendments would need to be put in place to make the applicable changes?

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Just met with a client. There are 4 companies 100% owned by one individual and his spouse. So this is clearly a controlled group. Since a Simple IRA can only be adopted by one employer (there is no way for a participating employer to sign on), I suppose the only answer here is for each of the 4 companies to set up their own Simple IRAs. I was told by an ERISA attorney at one time that a Simple plan is meant to be just that - simple. and so there is no such thing as a second participating employer. But separate Simples should work. We are a TPA firm and work with k plans. I assume some of the record keepers will handle SImple IRAs such as American Funds RKD, Hancock, etc? Comments? Thanks

Client allows ees to accrue up to 6 weeks of vacation, but then does not allow them to accrue any more. They do not want to allow people to get any cash in there paycheck for the unused vacation time, but want people to be able to make an election to "close out" their accrued vacation in exchange for a contribution to the Plan. Since 401(k) is CASH or deferred, and they have no option of cash, my conclusion is that they cannot count it as 401k. The only thing that gives me pause is I suppose they could just not work, and at that point would be getting the cash, but that does not seem to cut it. Could thye have an employer contribution to accomplish this? I don;t think there would be a good way to fit this into my plan document (standard prototype). Even though I have everyone in their group on this plan, something about this tells me that there should be more provisions around it. Has anyone seen anything like this before?

New 401(k) established 10/1/17 with a 1/1/17 effective date. Plan includes Safe Harbor 3% provisions as well as a discretionary ACP safe harbor contribution and a discretionary PSP contribution. Of course, two owners were able to defer the maximum $24,000 before year-end. The rest of the 6 staffers were able to accumulate about $2,000 each in deferrals before year end. Is it too aggressive to allocate a stacked ACP safe harbor match limited to 4% of pay using full-year compensation?

Are student trainees (18mos visas) and interns (12 mos visas) working in the US under a J-1 Visa (who are subject to Fed and State taxes but generally exempt from Medicare, Social Security and FUTA taxes; limited as to the work they can perform) considered "employees" for purposes of service credits and eligibility in a retirement plan? As I understand it, the J-1 Visa opportunities are temporary and are permitted with the understanding the training will then be taken back and applied in their home nation, intended to be a cultural experience. Client hired a J-1 Visa Student Intern/Trainee in May 2015. While "interning/training" with the Client, she applied for political asylum and was given a Employment Authorization Card late 2015/early 2016. She was then hired by the Client effective 2/6/2016. Each year she renews the Employment Authorization Card, continues working for the Client. QUESTION, is her Date of Hire for Eligibility determination (and service crediting purposes for Vesting) May 2015 (date started interning/training under J-1 Visa) or Feb 2016 (bc now has Employment Authorization Card the Client was able to offer and she accepted Position as an employee)? For what it is worth, 2016 and 2017 tax returns were filed as Resident Alien; 2015 was filed by her scholarship program and she does not know the basis of the filing. Thank you!

Can an employer require employees to take a certain election through a 125 plan? If it's a requirement, then isn't it not an election anymore? The employer with the union and the CBA can create the cafeteria menu, but can they force an employee through the cafeteria line? If the CBA states: " fringe benefit 1, fringe benefit 2, and fringe benefit 3 are the responsibility of the employee through the 125 plan". Employer states, there will be a mandatory wage deduction for benefit 1, because the union has "elected" option A on your behalf without any express authorization, doesn't this violate the principle of 125 plan choice? Thank you in advance for your thoughts.

A participant owns 50% of the company and recently retired. The participant wants to take a full distribution. Per the most recent annual report, the account balance is about 44% of the total plan assets. I'm concerned that a full distribution from the pooled account might affect the rest of the participants' account balances negatively. Any concerns or issues with allowing the distribution? Thanks in advance.

I have a situation where Husband owns 100% of one business and Wife owns 100% of an unrelated business. Husband's business maintains a 401(k) plan for it's employees. Wife is an employee of Husband's business. They have a pre-nuptial agreement regarding the ownership of their own businesses, so there are no "direct" ownership issues. We have told them the two businesses are related because they do not qualify for the exception under IRC 1563(e) because the Wife is an employee of Husband's company. She is also a participant in the 401(k) plan her Husband's company maintains...probably the reason she's an employee in the first plan, but that is besides the point. They have come back an said the conditions under 1563(e)(5)(B) are satisfied even though the Wife IS and employee of Husband's business since she "does not participate in the management" of the Husband's business. Their interpretation is that the "and" underlined below means both conditions must be satisfied (employee and participate in management) for the condition to be considered not met. 1563(e)(5)(B) The individual is not a director or employee and does not participate in the management of such corporation at any time during such taxable year; I do not see anything in the Code or Regulations that clarifies this point. I have always interpreted this section to mean that if a spouse is an employee or director, the spousal attribution exception does not apply. I would read the part about not participating in the management as a separate condition. None of the articles I can find on the subject address the "management" language in 1563(e)(5)(B). Seems contrary to the general intent of the rules around spousal attribution to say the spouse can be an employee and participate in the plan, but the spousal attribution rules can be ignored as long as the sponsor is willing to say the spouse doesn't participate in the management of the sponsor. Anyone have thoughts on this? Authority for either position?

Is it permissible to spin-off a portion of a safe harbor 401k plan to an identical safe harbor 401k plan for a calendar plan year after January 1st of the current year with an effective date of January 1st to avoid a plan audit for the 2018 plan year? Safe harbor mid-year amendment issues?