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Besides being stupid, which it is, and some of the things listed above, they are converting potential capital gain money (if they are NOT deemed to be in the real estate business) into ordinary income. PLUS, they will need to get an independent valuation of the property each year that would stand up to IRS scrutiny (the real estate broker estimate won't do; they need a proper appraisal - figure upwards of $8 - 10k just for that). It's unlikely that this will produce UBTI as they will not be in the business of real estate with just one home. But they will have the problem of debt financed property unless they pay cash for the house, which does mean a regular income tax return will have to be filed by the plan (expect another couple of thou in costs). If one of our clients insisted on this, we would walk away from the plan; but that's just us.

An employee who is on furlough (or laid off) is NOT terminated. The problem is that employers will sometimes say than an employee is "laid off" to avoid saying they are terminated. This is a problem and I often have to challenge employers on the issue. Some basic questions: is the job being held open pending the employee's return? Is the employee expected to come back (similar to a maternity leave)? Are you continuing benefits for the employee or have you provided COBRA benefits? etc.. It is a facts and circumstances determination and the words furlough, laid off, leave of absence, are too often used without really explaining what the situation is. Are they still employed? That is the question that has to be answered, and it isn't always straightforward.

They're here! https://benefitslink.com/newsletters/2018/2018_11_01_retirement_bulletin.html

Well.... it's OK to share both Q and A. Others might learn something.

Isn't this a question only the employer can answer? Are they saying this person is terminated or not? I don't see how a TPA can answer this kind of question. There are signs that can point one way or another but I would not claim they are full proof in determining if the person is terminated or not. But as a general rule they have to give COBRA notices to terminated employees. Have they given such notices or not? I am not sure how unemployment works but are these people reported as terminated for those purposes? Once again these are all something the employer needs to tell you and it isn't determined by pension law.

In the soda aisle with all the other carbonated and non-carbonated drinks.

Agreed. "How do I terminate my SIMPLE IRA plan? "Step 1: Notify your employees within a reasonable time before November 2 that you’ll discontinue the SIMPLE IRA plan effective the following January 1. "Step 2: Notify your SIMPLE IRA plan’s financial institution and payroll provider that you won’t be making SIMPLE IRA contributions for the next calendar year and that you want to terminate your contributions. "Step 3: You should keep records of your actions, but you don’t need to notify the IRS that you have terminated the SIMPLE IRA plan. "Example: Acme Company decided on November 18, 2014, to terminate its SIMPLE IRA plan as soon as possible. The earliest effective date for the termination is January 1, 2016. Acme must notify its employees before November 2, 2015, that it won’t sponsor a SIMPLE IRA plan for 2016." [Source: https://www.irs.gov/retirement-plans/terminating-a-simple-ira-plan]