My company reached out to me letting me know they failed discrimination testing and, as a result, had to give me additional profit sharing contributions. That makes sense, but they also said I am required to fund it out of pocket. Normally, it would be up to the company to fund this, but I'm a partner at my company. They've already funded it, but they are requesting a reimbursement. Is this correct? Am I required to fund this?

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The ERISA Handbook tells me that I need to combine the match under both the safe harbor formula (basic formula; 100% of first 3%, 50% of next 2%) and the discretionary match to see if it meets the ACP safe harbor requirements. I don't understand why. If someone defers 5% and a plan does the basic safe harbor match formula but also wants to do a 100% of the first 4% discretionary match, would ACP testing need to be done or does it meet the ACP Safe Harbor Requirements? Do I apply the 6% rule (matching contributions may not be made with respect to elective deferrals in excess of 6% of comp) independently to the discretionary match, or do I need to combine the safe harbor and the discretionary together and then apply the 6% rule?

A governmental employer has a 401k plan. Has anyone successfully used EPCRS to ask the IRS to allow a conversion from a 401k to a 401(a) Plan? I am hopeful that the IRS won't disqualify the plan and will work with us to get the plan type corrected. I plan to submit an anonymous VCP application asking IRS to allow a retroactive amendment to change the plan type from 401k to 401(a). Anybody have another idea?

I have 4 companies -- A, B, C, and D. Companies A, B, and C are a controlled group, and companies C and D are a controlled group. Companies A and C are not a controlled group and don't qualify to be an affiliated service group. Which of them do I test together? I'm thinking that I need to test A, B, and C together, AND then test C and D together, but that could be redundant for C. Am I missing something?

The discussions of us taking over this ERISA 403b plan were going well, until the sponsor mentioned that it "purges" employee records every couple of years. The sponsor currently uses a low-cost (and low-service, but you didn't need me to say that part, did you?) recordkeeper who never questioned any lack of data or plugged data. There has been no TPA involved (the sponsor did its own employer calculation and the sponsor's auditor did the Form 5500s). After I regained consciousness, I started listing for the sponsor all the potential problems: RMDs, no ability to deal with missing/lost participants, proper coding of 1099-Rs, etc. It's one thing if it's a smaller plan and you can get your hands around all the participants -- maybe they know that there is no one who is 70 years old, and maybe they can track down all the terminated employees with balances. But it's a different story when it's maybe 100 or 125 people in this situation, and the whole HR department is new in the past 6 months. I've asked them to take a second look around for information, but let's say they really don't have dates of birth for those who separated from service more than three or four years ago. Possibly a bunch of the addresses are no longer valid and no one has followed up on them... or are "c/o the plan sponsor." On a scale of "very" to "run away," how much are they in trouble? Any suggestions on how to get this plan back on the straight and narrow without it costing a fortune?

Based on a real life situation, but thankfully not actually me or my family. Family business, many family members participate in the same 401(k). Suppose my mother dies. I am the SOLE beneficiary of her 401(k) account. I receive RMDs each year from her account. I die prior to the account being entirely distributed. My wife is my SOLE beneficiary. Does my wife assume the role of the beneficiary who receives the remaining RMD of my mother's account, in addition to the RMD of my account? In other words, does my wife automatically become the beneficiary of my mother's remaining account? Or, does my mother's remaining account become part of my estate and pass to my estate beneficiaries (which may or may not be solely my wife) rather than directly to my wife via the plan? My mother already had begun receiving RMDs before she died. So after she died, my subsequent RMDs, from her account in the plan as to which I was the beneficiary, were calculated using my life expectancy, reduced by one [1] each year. So I believe that the RMD, payable to me IN the year of her death, is a "normal" RMD, and the balance is then payable in a lump sum. I'm still wrestling as to whether that lump sum is payable to the beneficiary of MY plan benefits, or is it payable to my estate since it doesn't represent "my" plan benefit. I'm not really finding anything directly on point in the RMD regulations.

We are the TPA and we calculate the match for the client on a per pay basis. Their pay period ending date was 5/22 but the pay date was 5/29. The next pay period ending date is 6/5 with a pay date of 6/12. A participant met match eligibility on 5/24 and is an immediate entry. The client is thinking the person should not get a match until the 6/12 pay date because the pay on 5/29 is for time worked prior to her entry date. Our system processes based on the pay date and as 5/29 is the first pay after her effective eligibility date, we are thinking the participant is entitled to the match. Should use the pay period end date or should we use the actual pay date?