Pension RC

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  1. If a terminating plan has a short final plan year due to the completion of distributions, but files a 5558, is the extended due due what it would otherwise be if the plan wasn't terminating (9 1/2 months after the normal end of plan year), or is the extended due date based upon the end of the short plan year? Would you happen to have a citation? Thanks for any responses!
  2. I am working on the termination of a DB plan. There is one participant who is active and receiving a benefit. On the Form 500, would he be counted as an active or as a retiree? Thanks for any responses!
  3. A participant was paid an RMD in 2016, but she lost the check. Therefore, the check was cancelled and reissued in 2017. Should a 1099R be created for 2016 or 2017? What about if the payment was made through a third party distribution service? The plan wrote a check to the third party in 2016 and the third party sent the check to tyhe participant in 2016. In 2017, the third party cancelled their check and reissued. Does this situation have a different answer? Thanks for any responses!
  4. Is there are permanency issue with starting a plan 1/1/2016 with a 10%/year accrual and then freezing the plan effective 1/1/2017? Thanks for any responses!
  5. A 401(k) plan covers a doctor, age 71 and his wife (not yet 70 1/2). I recently sent required minimum distribution paperwork to the doctor. Today, his financial advisor called me and said, "Don't worry. We've already satisfied his 401(k) RMD by increasing the amount he took as an RMD from his IRA." I thought that the RMD has to come from 401(k) plan assets. Who is correct? Thanks for any responses!
  6. I generally don't deal with 403(b) plans, but I'm trying to help a friend (the ex-husband in the case below). A professor participates in the university's 403(b) plan. She is divorced and a QDRO awards her ex-husband 40% of the marital portion of the 403(b) benefit, which winds up being about $72,000. The ex-husband needs the funds, so, even if it's rolled over into his IRA, he will immediately have the funds distributed from his IRA. The participant has offered to pay him by check, but will charge him for doing so. 1) Can the participant charge for paying by check? 2) If the ex-husband is 56, will he need to have a) 20% withheld for federal b) applicable state withholding withheld, and c) the 10% penalty? Will this be true if he rolls it over and has it immediately distributed? Thanks for any responses!
  7. I am working on a terminating DB plan. The plan is vague when it comes to age to 417(e) purposes. From what I've read, it appears that, if a certain age methodology was used for calculating lump sums (such as years and months) while the plan was active, then changing it to anything else to pay termination lump sums would be a 411(d)6 violation. Would you agree? Is there an argument to the contrary? Thanks!!
  8. Is it possible for the termination liability in a cash balance plan to be lower than the sum of the individual hypothetical accounts? Thanks for any responses!
  9. We took over the administration of a profit sharing plan in 2011. A QDRO was written in 1987 awarding 50% of a participant's benefit to an alternate payee. In 1990, the participant was paid about $6,000, but the alternate payee received nothing. The participant subsequently passed away. Now the alternate payee is asking for her benefit. The plan sponsor claims that $6,000 was 100% of the benefit. We don't have sufficient document to prove whether $6,000 was 100% of the benefit or 50% of the benefit. In fact, we don't have any reports for the plan prior to 2003, so we can't really estimate what the participant's benefit was in 1990. She is threatening to get her attorney involved. Can anyone opine on what the outcome would be if she pursued this matter legally? Thanks for any responses!
  10. Takeover plan. Plan effective 12/1/1956. However, the 5500's have always listed the effective date as 5/1/1956. Should this be corrected going forward? Will correcting this cause the IRS to request that all of the past 5500's be amended? Thanks for any responses!
  11. We have a takeover plan. The prior administrator only prepared the Schedule SB, but the plan sponsor prepared the 5500-SF each year. for 2015, we prepared the 5500-SF. The plan sponsor makes one contribution, which is deposited shortly before the extended deadline. In past years, when the plan sponsor completed the form, they listed the prior year's receivable as the contribution, so the contributions on the 5500-SF didn't match the contributions on the Schedule SB. When we prepared the 2015 form, our trust accountant decided that, in order to bring up the 5500-SF to date, he counted the prior year's receivable and the current year's receivable. This way, when we prepare the 2016 form, the contribution on the 5500-SF will match the contribution on the SB. The 2015 form was filed and we explained what we did to the plan sponsor.. My contact at the plan sponsor just sent me an e-mail. She is very upset that we switched the methodology without asking her first. She is concerned that, one day, when she prepares the form, she'll switch back to the old method and list $0 contributions, which will look bad. It sounds to me that she is making a big deal out of nothing. Would you agree? Any responses would be appreciated!
  12. I am working on a plan that requires 1950 hours for a year of credited service. I thought that it couldn't exceed 1000 hours. Can it? Can someone point me to the right section of the IRC? Thanks for any responses!
  13. A DB Plan is terminating. Are the actives offered annuity forms if their lump sums don't exceed $5,000, or are they treated like terminated participants, who just get the lump sum option? Thanks for any responses!
  14. I'm involved in a PBGC plan termination. A terminated participant would like to receive a lump sum, which is allowed under the plan. However, the participant notices have been distributed and the Form 500 was recently submitted. The participant would like, if possible, not to have to wait until the end of the 60-day review period. My reading of the Form 500 instructions is that this is fine since it is a terminated participant. Am I reading this correctly? Thanks for any responses!
  15. Thanks for your responses! The specific question now is - why is it reported on the 1040 and not on 1065? Is it that reporting it on the 1065 will reduce the net schedule C income, which will, then, reduce the medicare tax?