"A terminating plan has 5-6 participants who had forfeited their checks. The money was moved into the forfeitures account, which was used to pay an invoice. Because we are working with the DOL and the forfeited checks need to be re-issued, and considering the fact that the balance in the forfeiture is less by $100, can we re-issue on a pro-rata basis? Will this needs to be reported on the 1099-R?"

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"One plan is moving to the 'retail' and making the current record keeper as the custodian and not the record keeper. The accounts can be used to hold 401k assets on the 'retail' side of where the plan is record kept. In order to open these types of accounts, the Plan Sponsors must sign a new Retail Adoption Agreement and a new Retail Service Agreement. In order to do this the plan must terminate.

Will this be even considered to be a plan termination? My understanding is that upon a plan termination, the participants have the right to choose their distribution options, i.e., their accounts cannot simply be moved over to retail side. Can participants just be rolled over (Active or Terminated) into the retail account?"

"I have a plan that sometimes runs into participants' paychecks being lower than the amount of their desired 401k deductions. So, for example, the check is $50.00 but they have $75.00 as their deferral election. Are they supposed to then withhold the other $25.00 in a future check?"

"Plan was created in August 2022 with a 1/1/21 effective date so they could do a PS contribution for '21. Was there supposed to be a 5500 filed? If so, how do you go about it? Plan wasn't in existence until August, well after the extensions were due. Is there a special 5500 rule for plan that are retroactively adopted?"

"If a section 401(k), section 403(b), or governmental section 457(b) plan’s sponsor or administrator removes from the plan’s investment alternatives a lifetime-income investment (which might include an annuity contract with guaranteed-lifetime-withdrawal-benefit provisions), an exception from the usual restrictions against a distribution before severance-from-employment or age 59½ allows a limited distribution to remove from the plan the annuity contracts. This could include delivering to a participant a qualified plan distribution annuity contract. See Internal Revenue Code sections 401(a)(38), 401(k)(2)(B)(i)(VI), 403(b)(11)(D), 457(d)(1)(A)(iv).

Has anyone done this? Did you have a good experience, or a bad time? Did the insurance company cooperate? What difficulties did you encounter? What cautions and pointers would you suggest to someone now planning a project? (Please don't misunderstand my query as suggesting any view for or against any insurance or investment product. Rather, I seek help about how a practitioner might guide a plan sponsor that has already decided to remove lifetime-income investments.)"

"Is there a maximum percent of eligible pay that a not-for-profit employer-sponsor has to stay below? In the for-profit world, they have to stay below 25% to keep the contribution deductible, but there's no deduction issue for a non-profit. Whether or not a not-for-profit should be spending 30% of payroll on a plan contribution is another question altogether, but if they had the cash, is there anything stopping it?"

"I have a plan that has a start date of 1/1/2022 with an effective date for deferrals of 11/1/2022, with an eligibility requirement of 6 months. If someone has been at the company for a year but has an 'effective date' into the plan of 11/1/2022, does that mean they will have to work another 6 months before they are eligible to defer, or, because they have been at the company for a year, they are eligible on the effective date?

I have the same question for vesting. The company has a vesting schedule of 1 year, with a plan start date of 1/1/2022 and effective date of 11/1/2022. If an employee was hired on 1/1/2022 will they have to wait another 1 year to fully vest after the effective date?"

"I have a one-person EZ that all the assets are in a brokerage account with an advisor. Somehow, with the changing of jobs and the relationship between us (the TPA) and them, this was missed. I explained that the VCP is the most straighforward way to do this, but they want to roll the dice. So my questions are: what is the downside? Isn't there a max $500 penalty either way? What should the letter look like? Addressed to the DOL or IRS, signed by the employer? A basic statement saying her two professional contacts missed the filing?"