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Plenty of lawyers in this field and on this board who specialize in ERISA law. Intellectual curiosity and insisting that many of the attorneys who specialize and practice in this area everyday might be wrong because an "obscure section of ERISA" that you don't know about that may prove you right are not even remotely similar. Your time is indeed wasted here because you refuse to accept where you are wrong and where your knowledge is limited.

Correct. You would need to add a separate amendment if you want to allow loans outside of the CARES Act loan since they are separate features.

Geez Louise guys. Can't we all be civil to each other? Sure many of us are going stir crazy and driving our spouses crazy. But it's time to be patient and compassionate. Do your best!

Who submitted the death certificate? Assuming it was the son, did he have to complete a form to request for the benefits? Did the form ask for the deceased's marital status? Did the son answer truthfully? Someone at the company should have reviewed the form and the death cert. If they had, they would have requested the spousal waiver and, since there wasn't one, stopped the payment process at that time. If that didn't happen and the documents were sent to Fidelity, then someone THERE should have caught it. IMO, Fidelity needs to pay the widow right away and recoup the money as best they can. Review the Plan Document as well as the Service Contract to determine who is ultimately responsible for "approving" the payment transaction.

Darn, CBZ. I forgot about everyone getting the GW. I did say MAY help, lol.

I think he meant "NHCEs" that's all. Ah, Mr. Rigby beat me to it...

Possibly helpful article here: https://www.wagnerlawgroup.com/resources/investment/pandemic-and-broker-dealer/recordkeepers-and-advisors-chances-are-your-business-continuity-plan-did-not-fully-address-this

No, the second sentence states HCEs but the context implies NHCEs. I'm asking for clarity. And, I don't care about "client veracity". A statement of "opportunity to defer" is NOT the same as "negative elections".

Some states are requiring insurers to be lenient in this regard; you might check with the state insurance commissioner. We're posting them as we find them, but we certainly don't have all of them. I know I've seen Ohio and Washington State; this article lists others but it's from 3/18: https://www.mercer.com/content/dam/mercer/attachments/global/law-and-policy/gl-2020-covid-19-spurs-irs-relief-for-hdhps-state-insurance-guidance.pdf Also, some insurers are acting voluntarily: https://www.ahip.org/health-insurance-providers-respond-to-coronavirus-covid-19/

What part of "They were married three years." leads you to discount the statement's validity or justifies your doubt as to the marriage's validity? Making up scenarios that directly contradict what appears to be simply facts presented by the OP is hardly helpful to this OP or to anyone who might read this thread in the future

There are plenty of intelligent responses, but we dont have all the facts we need for a complete answer. Like most threads, it's a give and take between the OP and the people who respond. Of course. No one is blaming Fidelity. We dont even know that Fidelity had their attorneys involved, it could an administrative mistake. Not really. Like many posts here, the OP doesn't necessarily know what facts to look for or what questions to ask to get those facts. Most of the back and forth in these threads is part of the process to get the facts. This thread has gotten more facts from OP. It has provided OP with direction to get more facts relevant to the situation, like what Fidelity's role was. It has informed OP that the wife needs to submit a claim, and probably needs legal representation from someone who specializes in this part of the law. I'm all for case law, statutes, and regs. But if we don't have the full picture, how can we provide OP sources that are relevant? Your conclusion from Kennedy seems to be that since a divorce decree waiving a benefit does not automatically void a beneficiary designation filed with the plan, a participants subsequent marriage shouldn't automatically void a beneficiary designation either. This is incorrect. The problem is that if the plan is exempt from the QJSA requirements (which OPs fact pattern suggests), the spouse is required to be 100% beneficiary unless he/she waives that benefit. The marriage supercedes the prior beneficiary designation. It is no longer valid. If the plan pays out a benefit based on the beneficiary designation that preceded the marriage, it is NOT acting according to the terms of the plan, which is a crucial element in Kennedy.

This is missing @Bird's point. The present case is not dealing with two competing ERISA provisions, the designation of the son as the beneficiary became invalid when the father remarried.

I disagree. I'm no lawyer but this didn't make sense to me so I reviewed the case...ok, I read a review of the case. I believe that drawing an inference from that case to this situation is not valid. The Kennedy case was one where an ex-spouse gave up her right to any pension benefits as part of a divorce settlement. But the participant did not change the beneficiary designation which named her as the primary beneficiary. Both she and the estate filed claims and the plan decided she was the beneficiary. I won't get into the legal reasoning but it went to the Supreme Court and they sided with the plan - she was the beneficiary because the beneficiary designation said she was, and a separate document waiving her rights had no impact. The first sentence of the (Trucker Huss) review said: "In a victory for plan sponsors and administrators, the Supreme Court ruled recently in Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, 129 S.Ct. 865 (2009), that retirement plans may rely on the plan terms and beneficiary designation forms in determining the proper recipient of survivor benefits." (My emphasis in bold.) Plan terms in the instant case say wife is beneficiary. No ifs and or buts; the designation signed by the participant before the marriage is simply invalid.

Federal law doesnt "allow" the wife to be the beneficiary, it requires her to be the sole beneficiary if the plan is going to be exempt from the QJSA requirements. If the participant was married for less than 1 year before his death, the plan is not required to recognize the marriage. What is Fidelity's role in this that they made the decision about who to pay out? Are they the Plan Administrator? The SPD will contain information about how to submit an appeal for a claim of benefits. If the widow believes she is entitled to benefits, she should start there.

There was no yes or no question. It was an either/or to some degree. To expand on my answer: I don't think that an greater compliance measures need to be taken just because this was an HCE. I would certainly take steps to enhance the procedures to make sure this doesn't happen again.

There is no severance from employment if the new employer assumes the old employer's plan. See 1.401(k)-1(d)(2): (2) Rules applicable to distributions upon severance from employment. An employee has a severance from employment when the employee ceases to be an employee of the employer maintaining the plan. An employee does not have a severance from employment if, in connection with a change of employment, the employee's new employer maintains such plan with respect to the employee. For example, a new employer maintains a plan with respect to an employee by continuing or assuming sponsorship of the plan or by accepting a transfer of plan assets and liabilities (within the meaning of section 414(l)) with respect to the employee.

They can't pay someone W-2 wages UNLESS he is an employee providing services. Otherwise, it is a dividend to a stockholder and it is NOT deductible to the corp. I would suggest they are giving the WRONG ANSWER. They should be saying something like "he consults to the company all year long for which he is paid the $27k", and they say that is over 1000 hours a year. They need to stop saying they are violating the law by paying W-2 style income to a non-employee!!!!

Agreed; the answer is always "get a bond". However, it is disclosed on the 5500 and that's not a good thing to not have when it is legally required. It may be legally required, but it is also STUPID. Most of my clients are pretty smart, and if they are going to steal money from the plan, they are probably going to steal more than 10%!!!!

Yes. Yes. Yes. This exact scenario happens all the time. Be aware that if a SH contribution is due to the former owner(s), the new sponsor is now required to pay it - I have had that come up where the new owner did not anticipate having to make large SH contributions to the two former owner's accounts because they paid themselves well for the part of the year that they owned the business / were employees. And the prospective plan sponsor might want to review the plan first and make sure everything is in good order before taking it on. Sometimes the business attorney helping with the asset purchase does that.

A merger is an action taken by the employer(s) to combine two plans into one. It's a continuation of the plans under one roof...no options for anything, including rollovers, are needed or permitted. Good Q.

No option to take distributions becuase the new entity assumed sponsorship of the plan. Curiously, why did they adopt a new plan also? Once they took over the old plan, why did they feel the need for another?

Option 1: If the company is a partnership, make mom a partner. Option 2: Get legally married to mom. Option 3: Get a bond. I will let you decide which of these you like the best

No reason for the contribution to be in before the return is filed. Lots of clients file their return earlier than the due date (or after due date but before extended date) but don't put the money in until after the return is filed and that's just fine. We just remind them how important it is to get the money in by their due date (whichever one is applicable) or they are going to have to file amended returns AND have other problems as well (plus re-do fees from us for having to redo the annual valuation).

Your first statement is incorrect; you have different rules for different types of entities now. For calendar year entities: S Corp return due 3/15; extension takes it to 9/15 (which is same as the old rules). C Corp return now due 4/15; extension takes it to 10/15 (which is a change that makes both dates one month later). As you can see, the first due dates and the extension date are DIFFERENT for S Corps and C corps. And for comparison, sole props are the same as C Corps (4/15 and 10/15); Partnerships are the same as S Corps (3/15 and 9/15). On your third bullet, you are not clear as to what is the fiscal year of the entity nor what kind of entity; that is necessary to answer your question. Assuming plan and entity have the same fiscal year, if the corp is a S corp, the contribution is due 2 1/2 months after year end (8/15) or extended to 2/15 (new rules, not old rules). If a C corp, the contribution is due 3 1/2 months after year end (9/15) or extended to 3/15 (new rules). We don't really care anymore about the old rules now do we? For your question about when did this change, did you consider goggling "when did due date for tax return for C corp change"? You might find this: Tax provisions included in the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, P.L. 114-41 modify the due dates for several common tax returns and certain information returns (W-2 and 1099-Misc). The act set new due dates for partnership and C corporation returns as well as for FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), and several other IRS information returns. The changes are effective for taxable years starting after December 31, 2015 (2016 tax returns filed in 2017). Here's a chart you can refer to: https://www.aicpa.org/interestareas/tax/resources/compliance/downloadabledocuments/due-dates-summary-chart.pdf

Contributions must be made no later than the sponsor's tax filing deadline (including extensions) in order to be deductible for that tax year. Contributions made no later than 30 days after the tax deadline (including extensions) can be considered annual additions for the plan year. So you can have a situation where, say your tax deadline is March 15, 2019, you make a contribution on March 20, 2019, and count it as an annual addition for the 2019 plan year, but deduct it on your 2020 tax return and apply it against the 2020 deduction limit, which is in turn based on plan year 2020 participant compensation. The safest (and simplest) method, and what I generally tell my clients, is always to have the contributions in before the tax deadline, or better yet before the tax return is filed. If the tax year is different from the plan year, then it gets more complicated.

For a 12/31 pye S Corp 3/15 extended to 9/15 not changing. C Corp 3/15 extended to 9/15. Change not until 2025/2026. I have a chart. If you want me to email it to you message me your email - I can do it on Monday!