We just discovered that one of our employees has been stealing money from the company for quite some time. We fired him as soon as we discovered the theft, and we are working with the police and our attorney to determine what recourse we have. The employee has enough in his 401(k) account with us to cover most of what he stole, but he has submitted a request to take a distribution from the plan.
It seems like 401(k) plans require a lot of different notices and disclosures be provided to participants each year. We have safe harbor and default investment notices at the end of the year, fee disclosure notices and participant statements each quarter, and the summary annual report (SAR) when we file our Form 5500—and those are just the ones I can think of off the top of my head.
A participant in our 401(k) plan recently took a hardship distribution. We know we are supposed to suspend his deferrals for six months following the distribution, but we are not entirely clear on how strict that timing is and what happens at the end of the six months.
One of our employees who was a participant in our 401(k) plan recently passed away. He never submitted a beneficiary designation form; however, since he was married, we understand that his spouse is automatically his beneficiary. According to his spouse, there are enough other assets such that she does not want to accept the death benefit from the 401(k) plan and prefers, instead, that the benefit pass to her brother-in-law (her deceased husband’s brother).
Every couple of years, our 401(k) plan fails the ADP/ACP test by a small margin. Since we don’t always fail the test, gathering our year-end census information to send to our TPA sometimes isn’t as high a priority as some of the other projects necessary to close out the year.
Choosing a third-party administrator to manage your company's document design, compliance or government reporting services should be based on careful due diligence, rather than on the price of fees, DWC Managing Partner Keith Clark wrote in an article on choosing a TPA published on the Benefit News website.
"If I am hiring an attorney or any professional service firm," Clark wrote, "I want to hire the provider who best meets my service criteria. My buying questions will be focused on their experience and service model. If I like the answer, I will then ask about their fees."
Due to a glitch in our payroll system, one of the participants in our 401(k) plan contributed more than the IRS limit last year. It came to light while she was preparing her individual income tax return, and she is now asking us to return the excess amount to her?
My company sponsors a 401(k) plan. With everything that has been in the news about retirement plan fiduciaries and some of the lawsuits against them, we are trying to decide whether or not we should get fiduciary liability insurance for ourselves. Then I looked at our Form 5500 and it shows that we already have plan-related insurance.
One of our employees recently asked about changing his primary beneficiary on his 401(k) account. The beneficiary form says the participant must obtain the consent of his spouse in order to make the change, but when I called the company that manages our plan for us, I was told that spousal consent rules do no apply to our plan. Now, I am really confused.
Our business is considering setting up a 401(k) plan for our employees. We know that it can include both employee contributions and company contributions, but we keep hearing about all sorts of other contributions. There are profit-sharing contributions, matching contributions, qualified nonelective contributions, and Roth contributions.
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