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About jpdrews

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  1. Well I know our industry loves acronyms and that's now one of my favorites. So am I initiated into the club?
  2. Can I get permission to reuse "RTFD"?
  3. Thank you both very much for the discussion. I did not see anything concerning verbal communication in the plan doc. We've advised them to speak with ERISA counsel. Seems like a grey area to say the least!
  4. In December of 2015, the CEO of a plan sponsor told employees in a conference call that for 2016 the company would begin matching on a monthly basis and discontinue matching on an annual basis. The CEO also communicated what the match formula would be for the year. As part of this change the plan doc was amended to allocate matching on a payroll by payroll basis. The plan doc has the match as discretionary. The plan doc also states that all employer contributions must be deposited by the IRS tax deadline plus extensions. For the first 3 months of 2016 the match was allocated per payroll but remitted to recordkeeper monthly. But then the company began submitting employer contributions 2-3 months after the payrolls for which they were allocated. It seems remitting ER contributions 2-3 months after the payrolls may not violate the timing requirement established by the plan doc. However, could the CEO's verbal communication of a "monthly match" supersede the plan doc and obligate them to remit ER match monthly? Thanks for any thoughts.
  5. Thanks everyone for the additional input. After more discussion with the participant, she confirmed she was confused by the direction on completing forms provided by the new ER plan recordkeeper. ESOP Guy you're point re the 1099's is probably true. I figure since the IRS would be receiving only one form 1099-R showing a rollover (assuming the transaction was voided and redone as rollover) they would never know what transpired. Given the size of the plan they'd also have to really get into the weeds on an audit to figure out what happened. My concern has simply been I don't feel comfortable having the old ER plan ttee involve themselves since it now appears to be an error in communication/instruction on the side of the participant and new ER plan recordkeeper.
  6. My understanding is amount of IRA protection varies by state. For instance I believe TX is unlimited...similar to 401k...but CA is an amount necessary to support the welfare of debtor and relatives in retirement. Don;t quote me on it, but I think that amount is generally considered to be somewhere around $1M if not a little more.
  7. Yes the old employer plan withheld taxes. Old ER plan recordkeeper said they could go get the taxes back from the IRS should the ttee decide they wanted to redo the distribution request as a rollover. Since 1099's havent been sent, recordkeeper is saying they would void the first direct distribution check, recall the taxes from the IRS, issue a new rollover check payable to new ER plan, and issue 1099 in 2017 showing as rollover instead of direct distribution.
  8. Thank you jpod. I think we'll have trustee hold firm with the original distribution. Best.
  9. Thank you everyone for the input. After further dialogue with the participant it sounds like they misunderstood directions they received from the new employer plan recordkeeper. Sounds like she's been struggling to get the check back from the new employer plan recordkeeper. As QDROphile states...not the old ER plan's concern. But Trustee was just wondering if they could do the participant the favor of reissuing as rollover since it seems clear she wanted a rollover from the start.
  10. I contend the error was the participants. The participant is claiming they were told by my office to complete the form as a direct distribution. We have notes in our system from the call, but they are incomplete. Given the number of transactions my staff handles I don't think she would be told to complete the form as a direct distribution, but I guess anything's possible. Not sure if that info helps.
  11. A participant requested a direct distribution. Thinking she was executing a rollover, she forwarded the check to her new employer's plan. After back and forth with the new employer plan to deposit the check, she's calling the old employer plan stating she wanted a rollover in the first place. According to the participant, the new employer plan has taken so long to act and return the original distribution check, the 60 day rollover window is about to expire. The recordkeeper is willing to void the direct distribution and issue a new distribution as a rollover. To do this, they want a letter from the trustee of the old employer plan stating this was an "error at the participant level and please correct the distribution as a rollover". I'm the advisor to the old employer's plan. My question, is the trustee of the old employer plan putting themselves or the old employer plan at risk with the IRS to write a letter requesting the distribution be redone as a rollover? Thank you for any thoughts
  12. A client has terminated their 403b plan and paid out all assets. The final 5500 has been filed as well. In reviewing the filings I noticed that an ACP failure from two years ago was not corrected properly...specifically the ACP excess was refunded, but the client never made the one-to-one QNEC contribution required for late ACP failure corrections under EPCRS self-correction procedures. Questions: 1) I believe the client is past the "cure period" for SCP under EPCRS. Given they started the correction during the cure period, but did not completed, would they be allowed to make the required one-to-one QNEC correction or do they need to go under VCP? 2) Can they even do the QNEC to a terminated plan where all assets have been paid out? Also, the client would technically be in a new plan year had it remained open...not sure if that matters. Thanks!
  13. Thank you for pointing that out. Best!
  14. In the middle of terminating an ERISA 403b plan when it came to light the client did not file the 5500 for 2013. The client submitted the late 5500 through DFVCP and paid the $750. Now the client has decided to petition the DOL to have the fine waived claiming they "attempted" to file the 5500 on time, but the TPA's 5500 filing website did not process their original filing attempt. Question: would the client still be OK to proceed with termination while contesting the late filing penalty or do they need to leave the plan open until this is resolved? Thanks!
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