Blog | Ray Mazurowski
Ray Mazurowski
Becoming a Plan Participant and Earning a Contribution
Posted by Ray Mazurowski
Did you know becoming a participant and earning a contribution are two separate events? An employee could become a participant and not earn a contribution. Plan eligibility and contribution requirements are different aspects of your plan document.
What are Deemed Distributions?
You may have terminated participants in your qualified retirement plan who are zero percent vested in their account balance. How long do you need to keep them in the plan as plan participants? The plan document should have language which clarifies when to forfeit a non-vested account balance for a terminated participant. The most common forfeiture language that we see states that a forfeiture of non-vested balances occurs after the earlier of five consecutive one-year breaks-in-service or distribution of the vested account balance to the terminated participant. A break-in-service is usually defined as a plan year in which a participant worked less than 501 hours of service.
The Importance of a Beneficiary Form
When you are hired by a new company, one of your initial tasks may include completing various beneficiary forms for the company’s benefit plans. Most people, including myself, will fill it out and not think about my initial election anymore. Some people may overlook this and not fill one out at all. So, you may be asking yourself, what is the big deal?
The Importance of the ESOP Timeline
It’s the start of a brand new Plan Year and my Blue Ridge Administrator is asking me to participate in an annual welcome call to discuss the timeline. Didn’t we just do this last year? Why does my Administrator keep pressing this matter? What is the importance? The answer to these questions is YES, the timeline is a very important tool in ensuring a successful administration process.
What exactly is the Summary Annual Report and what do I do with it?
The Summary Annual Report (SAR) is a summary of the IRS Form 5500 that must be distributed to all plan participants. You’ll typically receive a copy of the SAR with your plan Participant Statements. Compliance is mandatory, and penalties for willful noncompliance can include fines in excess of $100,000, imprisonment up to 10 years, or both.
Topics: Form 5500, DOL, Summary Annual Report