"There is a small 401(k) Plan for a company where several employees provided false SSN in order to collect paychecks, etc. The company did not verify and as some time had passed, the employees that provided false SSN were able to get into the Plan. The company made contributions on their behalf. The Plan itself deems "non-resident aliens" are ineligible from entering the Plan. It was found out that said employees were in fact not of legal status to be in the United States. (Still receiving further details.) Would the employees just receive their contributions to the Plan, their contributions with the employer's contribution, and what would they be entitled to? I am seeing some cases where employees that fraudulently self-identified because of immigration/legal status had to go through Civil Claims."

"I am looking at a takeover CB Plan. The Plan Doc provides for 2.0% ICR for HCEs and 5.0% ICR for NHCEs. I vaguely recall that idea was floating around 5 or 6 years ago but was informally criticized by IRS on account of creating different BRFs and thus failing that test. Does anyone have any recent information on such design and any source of additional background info to research in more depth?"

"Early in 2022 person requested in-service distribution. Distribution was processed before we as TPA even received 2021 Compensation, and person's compensation for pre-2021 was not even close to HCE Threshhold Amount. Data for 2021 was received shortly after processing distribution and turns out person's 2021 compensation is over the Threshhold, making this person HCE for 2022. ADP Testing for 2022 results in the need to payout Excess Contribution. Problem is that the in-service basically zeroed out the person's deferral account, so there is nothing left under the Plan to payout the Excess. Monies for the in-service were rolled into an IRA. We notified the IRA of the Excess in February 2023, but the IRA did not get back to us until now. They gave us a form to pay out the Excess as an Excess Contribution, but now they say they can't do that for some undeclared reason. The IRA wants to pay money back to the Plan which would then pay out the Excess now. Of course, the IRA was subject a investment loss, so the amount won't even cover the Excess. A bigger concern is that the Excess was around $5K, so if paid back to the trust and then paid out now, there will be an excise penalty tax of around $500. The question is what is the best way to deal with this Excess Contribution?"

"Hi Someone I work with where I provided a combo plan proposal forwarded the following they received from the 401k recordkeeper (no name will be mentioned). Background, brand new plan, effective 1/1/2023, signed 3/31/2023 with the following: 401k deferral and NESH (3%), eligibility - age 21 and 6 months service with entry 1st day of the month after completion of 6 months - no hour requirement PS, eligibility - age 21 and 1 year service (1000 hours service required) with entry 1st day of month after completion of 12 months Additionally, as special provision, all employed on or before 1/1/2023 enter the plan without regards to the above eligibility This is what they received from the recordkeeper as forwarded by the client: "I received the feedback below from Compliance: This is a Safe Harbor plan, so we cannot make this plan more restrictive by adding 1000 hours service requirement for PS in the middle of the plan year.* Please let us know if you want to make these changes effective 1/1/2024" What am I missing here? Thanks"

"Corp A sponsors Plan A. Corporation B, while partially owned by Corp. A, is not part of a Controlled Group/Affiliated Service Group. Corp. B is a participating employer in Corp A's plan, so it is a Multiple Employer Plan. Corp B. is buying out the ownership that Corp A currently has in Corp B, and is withdrawing from the Corp A plan. Suppose Corp B does NOT want to maintain a plan. Is there any alternative to Corp A invoking the involuntary spinoff provisions (establishing a new plan in Corp B's name, which Corp B can then terminate)? I'm confused as to the alternatives in terms of the accounts of the Corp B employees who have been participating. They haven't terminated employment with Corp B. I feel like I'm missing something obvious."

"We have a plan that we took over as part of a business acquisition some years ago; it is profit sharing only with pooled/trustee directed investment accounts. They went from SF reporting to full 5500 with Schedule H and an audit in the year we took over. They have 4 different investment accounts, 3 are with mutual funds and ETFs with 15 to 20 positions, and 1 with 100+ individual securities (fortunately not a lot of trading in that account). We never really charged enough for the more detailed trust accounting required to prepare the Schedule H, but then in 2022 they moved money (not just cash but fund transfers in kind) and it became a full blown nightmare. We're charging them extra, and are bumping the fees going forward, and getting static. I explained the nuances (if you can call it that) of plan trust accounting, and it didn't really sink in. Then I made the (big) mistake of saying "well why don't you ask your investment people if they can provide reports specific to plan trust accounting" and now I'm spending more time explaining to them what we need (gains and losses from the beginning of the year) and basically having to prove that what they can provide doesn't work. Setting aside the business decision-making issues, if you are still with me... ...how common would you say it is to have a 100+ life plan that is not on a platform? Any anecdotal comments like "we have a bunch of these" or "we wouldn't touch this with a 10 foot pole" are appreciated. This is mostly to satisfy my curiosity. We run a small shop and don't know how others approach things. I know if we had 100 plans like this we wouldn't make any money."

"Hello All - I'm sure this is a very easy question but I need clarification for my elderly brain. [Calendar Basic 401(k) safe harbor match plan. - 1 YOS, age21, quarterly entry.] Large portion of client's work force is seasonal (work, term, rehire) so of course we are tracking them for LTPT eligibility. Here is my question: Employee works over 500 hours in 2021. Terms in 2021. Rehired in 2022 and works over 500. This person has 2 years of eligibility credits toward LTPT service, correct? Different employee works over 500 in 2021, terms, rehires in 2022 but not over 500. This person's LTPT service counting can start over since the consecutive PY cycle is broken, is that right? I'm getting myself confused on those who term as well as the whole "consecutive" idea. Thanks in advance for any comments."