2015 Year End Processing Deadlines

As 2015 comes to a close, our administration department would like to thank you for your continued partnership and remind you of the important deadlines for processing your payroll contributions and distributions.

Here are a few important dates to keep in mind to ensure your last payroll files of 2015 are processed in time to reflect on the December 31, 2015 valuation. Please have electronic information to us by December 24, 2015. The dollars for these contributions must be received at the investment company prior to December 29, 2015. If we ACH the money for your account, we need to receive your file by Noon Central Time on December 24, 2015.

When submitting your final payroll file of 2015, please take note of the pay period end date. It’s very possible it could reflect a January 2016 date, as not all pay schedules will end on 12/31/2015. If you notice a 2016 end date but would like your contributions processed in 2015, please feel free to contact us prior to submitting the file and we will be more than happy to modify that date to ensure your file is processed in the correct plan year.

Bonus payroll files are just as important and require the same amount of attention as a regular payroll. Please contact us so we can open additional pay schedules and assist you in getting these files uploaded & processed in a timely manner.

We have reached that time of year that you may hear the phrase ‘due to end of the year cut offs’ on rare occasion (or every time you ask a question) regarding your distribution or loan. 

Because we are given deadlines or cut off dates for services, we must pass some of those cut offs on to our valued customers.  During this busy time of year it would be easy to wait until the last minute, or think I will do that later, but don’t forget to submit your distribution and loan requests at your earliest convenience. 

Your dedicated Distribution Transaction Support Associates – here at Alliance Benefit Group will continue to process through the end of the year into the New Year but to ensure the distribution is reported in the 2015 calendar year ‘due to end of the year cut offs’ the following deadline for the receipt of any distribution or loan form is December 22, 2015. In addition, all applicable contributions and loan payments need to have been received and processed before these can be processed. Distribution forms and loan applications received after December 22, 2015 may not be processed until 2015.

Here are some other helpful tips to safeguard meeting the deadline or cutoff date: 

o   Send forms in soon

o   Use email, fax, or web/paperless submission (if available/plan allows) for quicker results

o   Make sure forms are complete, fill in every blank and have all signatures in place

o   Forms should be legible

o   Include detailed delivery instructions

Required Minimum Distributions (RMD)—RMD distributions also must be processed by December 22, 2015 unless it is the first one in which the required beginning date will be April 1, 2016.

·       RMD letters were mailed out to only those required to take an RMD for 2016. We’ve asked each Plan Sponsor to review a report to verify we have accurate ownership and plan status information in order to accurately determine who is required to take a distribution. For most plans, a participant is required to take an RMD if they have attained age 70 ½ and are a 5% owner or are an in-active (terminated) participant. Please contact your dedicated service team right away if you have any questions on who is required to take this distribution or if you would like confirmation that all required distributions have been processed for your plan.

·       We will send another report in January to capture any additional participants that became in-active (terminated) in 2015 and will be required to take their RMD by April 1, 2016.

·       Please note that the participant will incur a 50% excise tax on the required distribution if the distribution is not processed by the applicable deadline. Accurate information is extremely important in order to identify those required to take a distribution for 2015. 

·       In order to ensure that an RMD is not missed for future years, Alliance Benefit Group will also set up an annual recurring Required Minimum Distribution that will occur each year until the account balance is at zero.

·       Participants may call our Participant Call center at 1-800-495-4015 to make changes to the timing of this distribution or the taxes withheld at any time.

As this year ends, we think about all we are grateful for. Our relationship with you is one thing we treasure. Thank you for the opportunity to serve you. We wish you a happy holiday season and much success in the New Year.

Involuntary Distributions – What are they?

Retirement plans have options in place to distribute balances of some terminated participants if the participant does not provide an affirmative distribution election. These are referred to as involuntary distributions, force-outs, or mandatory distributions. Why are there involuntary distributions? How can you administer this? How can ABG take the worry away?

Why have involuntary distributions?

Involuntary distributions help to clear out small balances of participants who will no longer participate in the plan. More importantly, this helps with lowering participant count and may allow your retirement plan to remain under the threshold required for an audit. Clearing out balances defined below as soon as possible ensures participants aren’t carried over into future years.Your plan’s adoption agreement may state if a terminated participant’s vested balance is less than $1,000 it will be distributed as a lump sum via a check to the participant’s home address. It may also state that if the terminated participant’s vested balance is greater than $1,000 but less than $5,000 it will be rolled into an IRA established by the plan administrator on the participant’s behalf.

How can the plan sponsor administer this?

When a participant terminates, a sponsor can provide a termination form or instructions how to request a distribution through the ABG participant website https://www.abgncs.com. On ABG’s termination form, there is a handout called Special Tax Notice Regarding Plan Payments. The tax notice explains taxation, rollover and withholding rules and needs to be given to participants no less than 30 days and no more than 180 days before a distribution is made. This allows participants time to submit a distribution request. Your plan may have a defined amount of time that must elapse before the plan sponsor can direct an involuntary distribution. For many plans, this timeframe is between 30 to 60 days. If the participant hasn’t directed their own distribution by this time, the plan sponsor may contact their ABG administration team for instruction how to distribute the balance.

How can ABG take the worry away?

Involuntary distributions can be simplified if you opt to use a full-service IRA rollover provider. ABG has partnered with Retirement Clearinghouse to provide our plans with a worry-free service! When your ABG administration team receives termination dates, either through our Data Validation Center for contributions or via phone call or email, ABG provides Retirement Clearinghouse with a list of terminated participants every 2 weeks. Retirement Clearinghouse handles mailing distribution forms to all terminated participants and ABG tracks the number of days elapsed. After 60 days, ABG will distribute the vested balances of the terminated participants as either a check or to an IRA established by Retirement Clearinghouse if the balance meets the rollover amount threshold. This service adds no cost to your plan and takes the worry away from involuntary distributions.

There are two options available to work with your plan’s design:  $0 to $5,000 rollovers or $1,000 to $5,000 rollovers. If your plan document states all involuntary distributions are rolled into an IRA, ABG will direct all of the vested balances from $0 to $5,000 to Retirement Clearinghouse. The $1,000 to $5,000 option means that vested balances less than $1,000 will be distributed as a lump sum check to participants and vested balances between $1,000 and $5,000 are rolled into IRAs created by Retirement Clearinghouse.

Do you have up-to-date addresses for participants who terminated years ago? If you don’t, this is not a problem for Retirement Clearinghouse. They have resources to track down missing participants if you do not have a recent address. A great feature of the $0 to $5,000 option is that if your plan has outstanding distribution checks due to bad addresses, we can reissue the funds to Retirement Clearinghouse. They can help out with these old cash items and get them off your plate.

Ask your ABG administration team how you can administer your plan’s involuntary distributions and request more information about Retirement Clearinghouse. Thanks and have a great day!

Todd Eyler, QKA

Account Manager – Retirement

Proposed Changes to Exempt Status

The DOL released proposed changes to the Exempt Status wage test recently. The current regulations state an employee must pass the Salary and Duties tests to be considered an exempt employee. The salary basis test today requires the base salary of an employee to be at least $23,600. The proposed changes for the salary basis test are to raise that amount to $50,440. That is a 113% increase that will more than likely be effective 1-1-2016.

Other proposed changes include increasing the HCE salary levels, determining if non-discretionary bonuses should be included in calculating the standard salary, and provisional changes to the Executive, Administrative and Professional workers classifications. The increase to the salary test also will include annual automatic increases based on the Consumer Price Index.

If you would like to read more about this, visit the proposed rule-making site for the DOL here.

The DOL is accepting comments through September 4, 2015, all employers are encouraged to share their opinions about these proposed changes here.

Important Date:

August 1, 2015  - Minnesota increased minimum wage to $9.00 for large employers and $7.25 for small employers.   

Need a guide to each state? Find it here 

Contact Us:

If you have questions regarding the information provided in this post, you can contact us at 800-880-4015, or email us at info@abg-mn.com.

ACA Reporting Requirements for Control Groups

Control Groups & 2016 Reporting Requirements We’ve heard so much recently about the ACA, ObamaCare, Heath Care Reform, or whatever you choose to call it. Today, this law states that if you are an employer that is fully insured and have under 50 FTE’s, you don’t need to file. If you are self-insured, you have to file regardless of your FTE count. But did you know that if you are a member of a control group, you could be required to file forms 1094 and 1095 in 2016? No? Let us break it down for you. In the eyes of the IRS, a control group is considered a single employer. So, if you are a member of a control group (classified below) and collectively have 50 or more FTE's, you will be required to file these forms without facing a penalty from the IRS. In most cases, if you are a control group, you are probably aware of it. But are you set up and prepared to file your forms 1094/1095? If you answered no, contact us today to learn what ABGNCS can offer. If you answered yes but still want our help, we are here for you to take the worry away.  CONTROL GROUP DEFINED A control group, as classified under §414(c) of the IRS Code, exists when any two or more entities are connected through ownership. There are three types of control groups: 1) Parent-subsidiary, 2) Brother-sister, and 3) a combination of the above. A parent-subsidiary controlled group exists when one or more chains of corporations are  connected through stock ownership with a common parent corporation. In addition, 80% of  the stock of each corporation is owned by one or more corporations of the group, and the  parent corporation must own 80% of at least one other corporation. A brother-sister controlled group is a group of two or more corporations, in which five or fewer common owners (a common owner must be an individual, a trust, or an estate) own, directly or indirectly, a controlling interest of each group and have “effective control” (generally more than 50% of stock). A combined group consists of three or more organizations that are organized as follows: Each organization is a member of either a parent-subsidiary or brother-sister group; At least one corporation is the common parent of a parent-subsidiary, and; Is also a member of a brother-sister group. CONTACT US To learn more about how ABGNCS can support you in your reporting requirements, contact us at 800-880-4015, or email us at info@abg-mn.com.