I don't know how many Academy members frequent these message boards, but I would encourage all of you to seek out opinions related to the proposed changes before voting. The CCA and ASPPA have both put out information related to the changes. I am happy to post, if people haven't read anything about what is really going on.

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A current QACA safe harbor plan auto enrolls at 3% and escalates to 6%. Effective 1/1/2019 (it's a calendar year plan), the plan sponsor wants to amend the document to auto enroll new participants at 6% and increase to 10%. Is there a restriction on sweeping back and bringing all participants without a positive election to 6%? For participants who have already been escalated to 6%, is there a restriction that would not allow us to annually increase them to 10%? Will we end up with two different groups of QACA participants? I have reviewed the plan document and there is no mention of what happens when the default rate changes.

I have a client who wants to purchase a house to flip in his 401(k) plan. My first thought is NOOOOO. But I need something to back that up. Unfortunately, the advisor said yes.

I remember an expert saying that an owner-only plan with no non-key employees does not need 416 (top-heavy) provisions. The reason would be to set up a plan with a 5 year cliff vesting schedule to delay RMDs as long as possible. But I can't find any authority for this. Section 410(a)(10) and the 416 regs flatly state that all plans except those mentioned in Q&A T-38 must have such provisions. And the vesting language applies to all employer-derived benefits, not just those of non-key employees. We took over an owner-only DB plan recently; the prior firm used a 5 year cliff vesting schedule, and in plan's TH section it states that the TH vesting schedule is the plan's vesting schedule. As luck would have it, a 3-year cliff vesting schedule would have required 2016 and 2017 RMDs. Anyone know of any authority for using a non-top heavy vesting schedule in an plan with just a single key employee/owner participant?

A few clients are adding safe harbor to their existing 401(k) plans for 2019, and at the same time removing auto enrollment provisions. What do we do with the current default enrolled participants? Continue to provide an annual notice each year until they either elect in, elect out, or terminate? Or does eliminating the auto enrollment provisions mean their default deferrals should stop as of 1/1/19?

Employer wants to offer a MEC/skinny plan to get out of the "A" penalty, and make HSA contributions through a cafeteria plan to employees who get individual HDHP coverage on the exchange. [1] Does a skinny plan disqualify the individual from making HSA contributions (assume it's the minimum MEC to get out of the "A" penalty)? [2] If not, can the employer make HSA contributions through a cafeteria plan for employees who have HDHP coverage through the exchange? Would this violate any EPP rule (Notice 2013‑54 et al.) or other rule?

Participant is retired, had commenced his benefit and was in pay status, but then went missing and cannot be located, so his payments were suspended. Then a shared interest QDRO awarded a portion of his payment to an alternate payee. He's not currently being paid, but when he is located he will be paid back pay of his benefits that have been due. If his benefit were suspended by the plan for returning to work or something of that nature, then of course payments to an alternate payee would be suspended, too. But technically his benefit isn't suspended by the plan here. The plan just doesn't know where to send it. Should the plan pay the alternate payee or not? If not, then the alternate payee would get a lump sum of back pay representing her share, as well, once he is located but I don't see why the plan could not pay the alternate payee in the meantime, instead. What to do?

A plan went through a transition and there was some miscommunication about whether the plan or the recordkeeper would distribute the 404(a)(5) annual participant fee disclosures. As a result the notices went out 3 months late. I know failure to meet disclosure obligations could result in the plan administrator's breach of fiduciary duty, but there doesn't seem to be a way to remedy this through VCP. What can the client do besides document the issue and get the notices out ASAP?