Topic Archive: Plan Compliance

Who are Leased Employees & Are They Eligible for my 401(k) Plan?

DWC | 04/16/19

Facts

I own a small manufacturing company that specializes in office supplies, and I sponsor a 401(k) plan for my employees. One of my former employees, Tim Halpert, worked full-time with me for the past several years but recently left to work for a staffing agency called Prestige Worldwide.  Tim was a great employee for many years, and Prestige has offered me the opportunity to have him continue to provide services for me through the staffing agency. Prestige Worldwide also offered the services of another employee, Toby Blenderson, who would work on a part-time basis for about six months.

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What is the PBGC & Does it Cover our Cash Balance Plan?

DWC | 04/9/19

Facts

Our company is thinking of setting up a cash balance plan.  In our research about what that entails, we keep running into information about the PBGC and paying premiums.

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What is the Form 8955-SSA and What Does It Do?

DWC | 04/2/19

Facts

Our company has been very fortunate to have low turnover over the years.  Those that have left either were not eligible for our 401(k) plan, or they had very small balances and had their accounts forced out when they terminated.  We recently did have one longer-term employee leave us.  She was an active participant in our plan and has a sizeable balance that is well above our plan’s mandatory distribution threshold.  Our TPA said that we now have to file some new form – an 8955-SSA, I think – that has something to do with this former employee.

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How (and for How Long) Can I Extend the Deadline to File our Form 5500?

DWC | 03/26/19

Facts

We’ve had our retirement plan for a couple of years now and feel that we are finally getting the hang of the various deadlines for our plan.  There is just one deadline that I always have trouble remembering: the extended deadline for filing our Form 5500 with the DOL.  I’ve heard that if we extend our corporate taxes, it is the due date of our tax return.  I’ve also read that we can file an extension of the Form 5500 by filing a Form 5558 which will extend the filing deadline to two and a half months after the original filing deadline.  Obviously, these are two separate dates.  I just want to make sure that I am doing everything timely.

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What Common Compliance Issues Should We Be Watching For?

DWC | 03/19/19

Facts

Our company sponsors a 401(k) plan, and we want to make sure we do everything correctly.  We have a great staff and have put processes in place to help ensure we operate the plan in a compliant manner.  With all the moving parts, however, there is still a concern that we might miss something.

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Pension Pontifications | Q1 2019

DWC | 03/14/19

All of us here at DWC thrive on the really geeky stuff, and some of the best discussions start with our pontifications about how different topics impact our clients and our industry.  We decided to bring the best of those conversations to you, still with a touch of geekiness but also distilled into easily digested, bite-sized pieces.

This is our busiest time of the year as we prepare our Annual ERISA Compliance Reviews for calendar year plans.  It is a great time to connect with our clients and their investment advisors to discuss the past year and look forward to what lies ahead. - As originally published in our Q1 2019 newsletter. Didn't get it? Sign up here.

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We Failed the ADP Test! What Did We Do Wrong and How Do We Fix It?

DWC | 02/26/19

Facts

Our TPA just sent us our annual compliance report, and it says we failed testing! This is the first year we’ve failed anything, and now we’re being told that we need to take money out of the plan in order to remedy the failure. I don’t understand why this is happening.

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Can Higher Than Normal Turnover Affect my 401(k) Plan? | Part 3 of 3: The Results

DWC | 02/19/19

Facts

In last week’s QOTW, you provided some tools we could use to identify which participants were affected by our decision to close one of our locations, and to calculate our actual turnover rate for purposes of  determining whether a partial plan termination has occurred.

We’ve performed the review, and our minimum turnover rate will exceed 20%. Depending on which employees accept our relocation offer, we may have even more folks who terminate during this time frame.

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Can Higher Than Normal Turnover Affect my 401(k) Plan? | Part 2 of 3: Doing the Math

DWC | 02/12/19

Facts

Last week, we asked whether the turnover we are expecting as a result of closing a facility would have any impact on our 401(k) plan, and you mentioned a partial plan termination.  We have some follow-up questions.  As a quick recap, we are in the process of closing one of our manufacturing facilities.  Some of those working at that location have turned down our relocation offer and will lose their jobs as a result.  From last week’s QOTW, I know there is potential for a partial plan termination and that I will need to perform a review to make a final determination.

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Can Higher Than Normal Turnover Affect my 401(k) Plan? | Part 1 of 3: Overview

DWC | 02/5/19

Facts

Our company designs and manufactures boats.  Due to some advancements in technology, we will be closing one of our older facilities.  While we offered those workers the option to relocate to one of our other facilities, many have elected not to do so and will be terminating employment.  That group comprises roughly 20% of our total workforce.

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The views expressed in this blog are those of the authors and do not necessarily represent the views of any other person or organization. All content is provided for informational purposes only and is not intended to be tax or legal advice.