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for Retirement Plan Consultants (Urbandale IA / Des Moines IA)View the full text of this job opportunity

When I do a recordkeeper selection, I design the timeline so there’s eight months from the decision to the turn date. (Even if all needed tasks can be done in one month, there’s value in helping people feel comfortable with a change.) Timelines vary with a plan’s size and complexity, and with an employer’s size and complexity. Timelines also can vary with the conversion-out and conversion-in recordkeepers’ motives and how much they differ or align, or overlap.

There is a difference between a "mapped" conversion and an "in kind" transfer. In a mapped conversion, the new record-keeper/custodian and the investment advisor find similar funds in new record-keeper/custodian's line up, and the value in each investment at liquidation is immediately invested in similar funds at new record-keeper, avoiding the "Uninvested Cash while we wait for the by participant breakdown from old recordkeeper" problem. Not sure even 12 weeks lead time is sufficient. There are SO many issues to work out....loan repayments and contributions withheld during black-out, educating participants and in-house HR/payroll/finance staff on new systems and websites, and updating automated processes. At least 6 months is ideal, and all service providers need to participate.

My understanding is that you can amend to exclude them prospectively and that the document probably requires a 30-day advance notice to do so, even though they are HCEs. But check IRS Notice 2016-16 to see if you agree.

Just the usual 25% limit.

Great, thank you! Is there any limit? Or they can go as high as they want to?

That's correct. The combined deduction limit doesn't apply if the DB plan is covered by PBGC. IRC 404(a)(7)(C)(iv)

for FuturePlan, by Ascensus (Woodcliff Lake NJ)View the full text of this job opportunity

I was just reading something and came across a note I had never seen before. Is it true that if the Plan is covered by the PBGC, the 6% limit on employer contributions into the Profit Sharing Plan doesn't apply? We always adhered to the 6% rule, even for PBGC Plans, but what I read seemed to imply that it wasn't the case. So I just wanted to make sure I was reading this right. Thanks in advance

for Ascensus (Remote / Dresher PA / Hybrid)View the full text of this job opportunity

Can you make an amendment to exclude HCEs from being eligible for a Safe Harbor plan (effective 1/1 and amended at least 30 days before beginning of the year)? These HCEs already met the plan's eligibility requirements. Thanks!

I have always filed using third party software, which produces an AckID for Form 5558 filings. I would still start with EFAST, but be prepared to have to go to the Office of the Chief Accountant.

Thank you all.

For some reason, efast does not give an ack id for extensions? Just a Message that successfully filed. Not sure why.

There have been several similar discussion threads, including when the interest/dividend payment was MUCH later than a few days. As I recall, at least one such discussion involved payment from a litigation settlement, months after the supposed close-out date. Before taking any action, a prudent PA/fiduciary might make sure there is no possibility of another payment.

As someone who's primary job is to process conversions (money only, not addressing plan provisions or payroll), I can tell you that an in-kind transfer is much more difficult than a liquidation and wire. To speak to the comments above, if the money is insurance company separate accounts or omnibus accounts, an in-kind transfer is not possible. You would really only be able to move from one custodian to another where the funds are invested at the plan level. Arranging for an in-kind transfer as of a specific date takes a lot of coordination and agreement between the custodians, recordkeepers and the funds themselves and all must agree to the same schedule, and there will be lots of paperwork involved. Do you have a copy of the conversion records that Guideline originally sent over? You may want to look at those records to see for yourself if they had the information necessary. For example, did the records include the full name, Social Security Number and amount by source and fund by participant that was transferred? Also, did Guideline provide a report by participant with a beginning balance for the year, contributions, distributions, earnings, fees, loan data, and transfer out, etc.? Did they provide any census data? Did you map over the funds, or did they invest as per new enrollment allocations (or QDIA)? Mapping adds another layer of complexity, especially if fund data was not provided at the participant level. There are some recordkeepers who use their own identifiers and don't provide Social Security Numbers, which can make the conversion process difficult. Also, receiving the data for the current year doesn't always happen. I often have to make several requests to get current year data or end up getting several files with pieces of data and have to try to rebuild the year with what data I did receive (which I prefer NOT to do). If you ever do a conversion again, I would ask for sample copies of the records that are going to be sent over and ask to be cc:d in any communications between the recordkeepers so you can see what information is and is not being provided and when. Ultimately, if you are the Plan Fiduciary, all responsibility lands on you, so being very involved it the conversion process would be advisable.

A deferred compensation plan allows a company's directors to elect to defer a portion of their director fees. The deferred amounts are distributed upon the earlier of a 409A change of control or a director's separation from service. At the time of an election to defer, the director can elect to receive payments upon a separation from service either in a lump sum or in annual installments. The plan provides that if installments are elected, the number of annual installments will equal the number of full calendar years the director was a participant in the plan, up to 10 installments. So, for example, if a director has a separation from service after 6 years in the plan, he or she will receive 6 annual installments, and if the director has a separation from service after 12 years in the plan, he or she will receive 10 annual installments. This seems like a violation of the toggle rule because it provides for different times and forms of payment for the same 409A payment event, and I don't believe that any of the exceptions apply, but I'd love to entertain an argument that it's permissible.

Your conclusion is correct. You referenced: Vested balance = $25,000 Existing loan = $25,000 50% vested balance limit 50% * $25,000 = $12,500 Maximum total loan amount allowed across all loans $12,500 - $25,000 = ($12,500) ($12,500) is less than 0. Not eligible for any additional loans. All loans cannot exceed the Maximum statutory limit, which is the lesser of 50% of the vested account balance or $50,000

Oops, no more than half . . . . , or just half.

On Santo Gold’s hypo, isn’t the account balance after the first loan is made still $50,000—that is, $25,000 participant loan receivable + $25,000 other investments? But wouldn’t ERISA § 408(b)(1) and Internal Revenue Code § 72(p)(2)(A) limit the amount for a second loan? Consider 29 C.F.R. § 2550.408b-1(f)(2)(i) https://www.ecfr.gov/current/title-29/section-2550.408b-1. Consider 26 C.F.R. § 1.72(p)-1/Q&A-20 https://www.ecfr.gov/current/title-26/section-1.72(p)-1. Even before applying the tax Code limits, ERISA § 408(b)(1) limits the outstanding balance of all loans to the participant to more than half the participant’s vested account (measured after the origination of each loan). On Santo Gold’s hypo, if the participant when applying for a second loan has not yet repaid anything on the first loan, isn’t the second loan $0?

Your math and logic is all wrong. Read the IRS examples: https://links.us1.defend.egress.com/Warning?crId=6984f4a2c933bcd338c721dd&Domain=oneblueridge.com&Threat=eNpzrShJLcpLzAEADmkDRA%3D%3D&Lang=en&Base64Url=eNrLKCkpKLbS1y9JTcwt1svNTC7KL85PK9FLzs_Vz01NLdE3MrE0s7AwMbe0tDA3M7IvsA21zEsvrfIrzM4M8CrLyvIMzQYALWcXFw%3D%3D&@OriginalLink=teams.microsoft.com

The participant can take a second loan, but there is something wrong if in the above example, they are limited to $25,000 with one loan, but can get $37,500 with 2 loans (or more $$$ with > 2 loans). Is the maximum second loan calculation: [[50% * $25,000 (vested balance)] - $25,000 (current loan balance] = -$12,500. Since this is less than $0, then no second loan is available?

Yes, a participant can generally take multiple 401(k) loans if allowed by the plan; however, care should be taken to ensure that all loans combined do not exceed IRS limits.

for The Pension Source (Remote / Stuart FL / NY / TX / Hybrid)View the full text of this job opportunity

This is too simple, but here goes: Participant has a $50,000 vested 401k account balance. They take a maximum loan of $25,000 and have no other loans at the time A few days later, they realize they need more $$$ and wish to take a second loan (plan allows for this). Lets say the account balance is static and in a few days, the vested account balance is now $25,000 (after the initial loan) and no loan repayments have been made yet. Can the participant take a second loan for $12,500 (50% of $25,000)? I'm sure the answer is "No", but the above makes sense in a weird way. Any comments are appreciated.