All Activity

How confident are you that W was or became the beneficiary of H’s IRA? How confident are you that W did not take § 401(a)(9)-required distributions from other IRAs? (For IRAs, a minimum may be taken from any of the holder’s or beneficiary’s IRAs; it need not be taken from a particular IRA.) If W failed to take one or more years’ § 401(a)(9)-required distributions, does W’s personal representative want to file Form 5329 [https://www.irs.gov/pub/irs-pdf/f5329.pdf] and pay each additional tax? For which years, if any, does W’s personal representative have authority to file that tax return? Might “moved into an ‘estate account’” be a colloquial description of something that happened in the IRA custodian’s records but without creating a non-IRA account?

A few questions questions regarding SECURE Act amendments: 1. My understanding is that 401(k) plan documents have until December 31, 2026 to be amended for any secured act provisions, even if operationally implemented earlier (e,g, Roth catch-up elections implemented in 2025). Is this correct? 2. Are plan amendments required for: a. The annual paper statement requirement of Secure 2.0 Sec 338 - my inclination is that you wouldn't have to unless there were something in the plan document that suggested something to the contrary. b. The disclosures for eligible unenrolled participants requirements of Secure 2.0 Sec. 320 - again, my inclination is that you wouldn't have to unless there were something in the plan document that suggested something to the contrary. Thanks!

I have a similar question but a slight twist on the question. Plan is terminating 12/31/2025, distributions are expected to be paid and plan liquidated April/May of 2026. The participant turns 73 during 2026, in fact August 2026. RBD would be 4/1/2027 if the plan was still ongoing and the ppt has not retired (he is an HCE). At the time of plan distributions he is not yet 73. He is planning to elect a lump sum rollover. I am thinking because he has not reached his Age 73 birthday he is not subject to an RMD. Any thoughts?

"Bueller? Bueller? Bueller?"

Our firm might be able to help. I will send you a PM.

We have a small group of DB plans and work with an excellent actuary. Our plans are generally small but for one with several hundred participants. The sponsor wishes to start a new DB plan but would like it to look like their 401(k) - online access to see balance, process distributions online, etc. Does anyone know if Ascensus has such a product. I did a search on them and was directed to their subsidiary Future Plan. Thank you for any comments.

Lou S., thank you for mentioning professional-conduct standards. About the “alphabet soup” associations’ codes, does any call a member to do something beyond a duty to provide correct advice? If a client receives and considers the professional’s advice but decides to do what the professional believes is contrary to law, does the professional have any further responsibility?

We're going through this now, the employer Plan Sponsor has a change of mind after signing the Plan Documents, no Trust Account established, no funding. It is our interpretation that a Plan is established based on our reading of guidance that we can find from the PGGC addressing Title IV, "A plan is covered … upon the date of establishment or the effective date, whichever is later. Thus, your plan is covered on the date of establishment, which is normally the date on which the plan documents are executed.” Although this applies to PBGC coverage we feel this is a good interpretation of when a Plan is established. Additionally, ERISA Section 402(a)(1) requires a plan be established and maintained under a written document. In this case since we do have a written Plan Document there is a Plan and therefore needs to be formally terminated. This may be an ultra-conservative view and would appreciate if anyone else has a different view.

I would have been in jr high (what middle school was called in the '70s for you Gen Z) when Visicalc had its day. I seem to recall the name when you bring it up but I don't think I used it ever.

If you set the limitation year as the calendar year I believe it can be the full 12 months. After checking further I think Belgarath was correct that the short tax corporate tax year requires the compensation limit to be prorated.

If a trust account was never opened, was the plan really established? Don't have time to research that right now so just a thought.

I think something like that would be needed. I recently found this link - https://urldefense.com/v3/__https://benefitslink.com/boards/topic/72157-safe-harbor-match-by-payroll-failing-compensation-ratio-test/__;!!O7V3aRRsHkZJLA!HU1b-UbtqsiBwMV50RTj3ZVUp2Qzo8Jb7LMrk2U7QQaNCHmGmVzIjxPK5iRUGuIkXJeC3kyiI4pngwkT1lmAeRO6cFwi$

Can you allocate additional benefits anyway so that if you at least test on 415 pay everyone could come out equivalent?

They'll be allocated those zero dollars and LIKE it. (Zero value versus "null" value, if you've ever had a Crystal report come out crappy.)

for Compass (Remote / Stratham NH / Hybrid)View the full text of this job opportunity

Thank you!

We are helping a takeover client with a DFVCP filing. The EFAST site only goes back to 2009 filings which makes sense. When going to the DFVCP payment web site, it lists Forms 5500 going back to 2004 as "late filings found in EFAST at this time." Question is how are pre 2009 Forms showing up on the DFVCP site as being on the EFAST site, but they are not actually displayed on the EFAST site. Maybe the client filed electronically, but it is not displayed on the EFAST site? In any case how do we amend those pre-2009 Forms and submit under DFVCP? Hope someone has experience with this. Thank you!

The advantage is it is done and they can open a trust account and fund right away. The disadvantage is as David D says, the client can no longer change their mind once they sign the document.

The correct way to do it is as David D suggests. Resolutions and amendments to terminate the plan and file a first and final $0 5500-EZ. How fmsinc describes it is likely what most people do. Just pretend like the plan never existed. No one ever elected to defer, the sponsor never funded plan. It's not the correct course of action but the odds of the IRS auditing a solo-k that never put any money into and presumable never took any tax deductions is probably quite small. But if you are a member of one of the alphabet soup organization you are problem subject to one or more code of ethics standards. The penalty for plan disqualification wouldn't be anything since there is no money so no disallowance of deduction or tax on trust income since there is none, but there is potential penalty of $250/day up to $150,000 should the IRS decide to press the issue. I'm not sure they would but they could.

The DoL - EBSA keeps track of 163,000 defined benefit and defined contribution plans. Your client never did anything to consumate the deal between a Plan Sponsor and a Participant or an Alternate Payee. I bet your guy cannot even find the plan documents after the fire. If I set up a C Corportation and never issue stock, open a bank account, apply for an EIN or do any business at all, then I am the tree that fell in the forest and there was nobody there to hear it, so and it didn't make a sound. If my fiancee and I obtain a marriage license from the clerk but never marry, do I sill have to pay her alimony? The client should have a meeting of the Board. Void, vacate, annul, rescind, abrogate, invalidate and declare the Plan Documents null and void nunc pro tunc (now for then). Pax vobiscum

for Pentegra (Remote)View the full text of this job opportunity

5500 EZ's must always be filed in the year the plan is terminated and distributed, so you would be filing both a first return and a final return in one filing

Hmmmmm..... The DOL Online calculator is only used for determining earnings on untimely payment of deferrals to the plan trust that violate the DOL rules on when contributions must be made to the ERISA-governed plan. It can be used for full VFCP and must be used if self-corrected under VFCP. Right or wrong, many employers will correct the untimely payment of deferrals to the plan trust, calculating earnings using the DOL Online calculator, and not file anything under VFCP (but still file a 5330 paying the excise tax). We advise clients to do the self-correction notice or file the VFCP if self-correction is not available. Note though there is no requirement to file through VFCP (the "V" stands for "voluntary"). However, even if not using VFCP, plan sponsors still need to correct the late deposits with earnings and file the Form 5330 to pay applicable excise taxes (though they don’t need to file under VFCP). But like you state, without a VFCP filing, the plan has no authority permitting the use of the DOL Online Calculator to determine the lost earnings. Therefore, earnings should be calculated through an alternative method. Also, like you state, most practitioners advise using the IRS earnings method from EPCRS instead. That said, we have also assisted clients with DOL audits where they self-corrected using the DOL Online Calculator without filing under the VFCP and the DOL did not, after some discussions, have an issue with the corrections (even though there was no VFCP filing). We do NOT recommend using this alternative. At the onset, your post assumes there is an operational failure under the plan. We have found that most of the time there is no operational failure for untimely payment of deferrals to a plan trust because most of the plans we work on do not have any language in the plan stating when the contribution is due (other than they must be paid to the plan by the deadline required for the contributions to be deductible). If a plan does not contain the DOL timing rule or an equivalent, there is no operational failure (i.e., there is a DOL failure but not an IRS failure). If there is no operational failure, then no earnings are required for EPCRS. Assuming your plan has an operational failure, then the DOL Online Calculator might be able to be used for EPCRS corrections but only in certain circumstances. Under EPCRS the options for calculating earnings for late contributions are in order of priority (1) apply the actual earnings. This may be impractical or impossible, so EPCRS permits reasonable estimates which leads to .. (2) use the ROR for the best-performing fund in the plan. The IRS permits this because everybody wins using ROR… except perhaps the plan sponsor--using the highest ROR for the entire period (not separately for each plan year) of failure could prove to be very costly… so it may be more reasonable to…. (3) use the weighted average ROR for the plan as a whole. As reasonable estimates go, the plan’s ROR can be a justifiable approach. In other cases, if you must, you come full circle to ….lastly (4) use the DOL’s Online Calculator. EPCRS will allow the use of the DOL’s Online Calculator if the probable difference between the actual earnings and the DOL Online Calculator earnings is insignificant, and the administrative cost of the actual calculation would significantly exceed the probable difference. This sounds counterintuitive since being able to determine that there is an insignificant difference implies that actual earnings can be calculated. Yet EPCRS allows the use of the DOL Calculator, acknowledging that paying the service provider for a precise computation could outweigh the benefit of a small difference. This could happen when a) plans have self-directed brokerage accounts; b) 403(b) plans having participants with separate individual accounts; c) documents/info is unavailable, e.g., plan sponsor is bankrupt or out of business, natural disasters; and/or d) there are changes in service providers, which can all render it impossible to compute actual returns or even ascertain the best-performing fund. If you get to this point, the plan may use the DOL’s Online Calculator. In every other case which is usually the norm, the plan should use one of the other alternatives for determining earnings.

I believe the issue here is the limitation year. You cannot have a limitation year that precedes the date of incorporation, so that first year would be pro rated.

for Ascensus (Remote)View the full text of this job opportunity