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At least, according to my old coffee Mug, April 20th is the official day. Makes a good excuse for a former 'links' contributor to finally post a meaningful message.

Hi, all -- IMO (and that of my colleagues here at FBLC): DC RMDs, as required by IRC 401(a)(9) are suspended for 2020. That's mandatory. The answer to your more specific question lies with what the plan document says. Let's pretend the plan says: "No distributions unless specifically requested by the participant except RMDs under 401(a)(9)." Under that provision, no distribution can be made to a participant without his/her request because there is no RMD. Let's pretend the plan says, "In absence of an alternate election, participants over age 70-1/2 must receive an annual distribution, the amount of which is their account balance as of the last year end, divided by the rate in the 401(a)(9) regs." In that case, distributions must continue, because the plan document so requires. The distribution will be an eligible rollover distribution, as it is not an RMD. If it is to a qualified individual, it will be a COVID-related distribution. Let's pretend the plan says, "No distributions except lump sums, except for RMDs." In that case, the participant can get a distribution if he/she requests, but it cannot just be the amount that would have been paid as an RMD; it must be a lump sum. ALL of these plan provisions are subject to amendment, and most of the amendments can be done in 2022. Hope this helps. Ilene

Employed or not, the plan fiduciaries remain fiduciaries until the plan is completely shut down. That said, they may not be willing to continue to function in that capacity post termination - but if the DOL get's involved, they could change their mind. I believe the audit is still required - along with other responsibilities in administering the plan, and then shutting it down (properly). How are distributions being handled? Even in those cases where we handle distributions without employer intervention (non-fiduciary outsourcing), we consider that authority to cease when the employer does, and suspend distributions. That usually triggers DOL intervention - and after a sufficient time (if the fiduciaries can't be found) the Abandoned Plan Program becomes the option, depending on who holds the assets, and then the 5500 issues become easier to resolve.

Scam is a perfect definition. There is NO SUCH DOL REQUIREMENT. We have had clients get calls from them; our clients are educated to know these kind of calls need to be reviewed with us. This group calls to "disturb" the client, to get the meeting, to convince them they are doing wrong things, and ultimately to get the assets under the control of the person who is buying the leads.

The MEWA acronym stands for Multiple Employer Welfare Arrangement. The hospital is not doing that in its capacity as an employer, so there's no MEWA issue. Also, I've never heard any suggestion that the practice constitutes the business of insurance. And there's nothing in COBRA that restricts who can pay the premiums.

Luke, The same language in KETRA has been interpreted as optional due to language in Notice 2005-92. Notice 2005-92 also included a safe harbor method for delayed repayments katrina_act_text.pdf not200592.113005.end.pdf

IRS Notice 2020-23: "For an Affected Taxpayer with respect to Specified Filing and Payment Obligations, the due date for filing Specified Forms and making Specified Payments is automatically postponed to July 15, 2020.... This relief is automatic ... The Secretary of the Treasury has also determined that any person performing a time-sensitive action listed in ... Revenue Procedure 2018-58 ... which is due to be performed on or after April 1, 2020, and before July 15, 2020 (Specified Time-Sensitive Action), is an Affected Taxpayer." Rev. Proc. 2018-58 -- See page 57

I think your description needs modification. A payment of $200 on an initial loan of $10,000 requires an interest rate of 7.677%. The outstanding loan is $6,153.57 not $6,000, on 3/31/2020. I think you only accumulate missed interest (not missed payments), which is $472.41, resulting in $6,625.98 as the amount to be amortized and a new payment of $215.35 from 3/31/2021 through 12/31/2023. Total payments are ($200 * 26) + ($215.35 * 34) = $12,521.90 versus the original $12,000. Therefore, the one year delay results in higher total payments of $521.90. Doing it your way results in an increase of about $3,000 rather than about $500. The one year delay costs a whole heck of a lot more. Anybody know what a bank would do? Anybody think what a bank would do matters? Doing it your way increases the outstanding principal on the reamortization date to be effectively higher by about 12 payments (roughly $200 * 12; about $2,400). That is, you are forcing the borrower to add roughly $2,400 in new principal, without any additional funds.

I've never heard of this program, but the answer is easy. Since deferrals, by definition, HAVE TO BE deferrals, there is no way he can ever write a personal check for any deferral. Whether he is even eligible is a separate question, and I would tend to doubt it. Sounds alot like a temp employee from an agency for that first 90 day period.

We had a sponsor receive one of these calls a few months back, and the caller was kind enough to leave a voicemail which the sponsor forwarded to us. I don't know if I'd use the word "scam" since I'm sure they're providing a real service (albeit one of questionable value) but it definitely feels like a sleazy pitch. They're intentionally being vague about what fiduciaries are required to do with respect to reviewing their plan, and suggesting that their service would meet these requirements if performed regularly -- the caller in our case stated that this review is required to be performed every 6-12 months for all plans. I'm not familiar with the group and for all I know they do great work. But the message we heard didn't make a good impression on the sponsor or on us.

Hmmm. I need to get some popcorn for this thread!

Unless I'm missing it @Peter Gulia is actually mixing his apples and oranges in the hypo. If it's a participant directed plan, and Pat takes 100% of his balance as loan, the only thing left in the plan for Pat is his loan receivable of $100,000 plus interest. There is nothing to decrease in value due to market swings. If the loan is a PLAN investment, it is a whole other animal. If you let a participant borrow 100% (let's say $100,000) and participant is laid off/defaults with a market loss that that now values his account at $75,000, the plan has a loss of $25,000 on that investment after participants account balance is used to offset. If loans are plan investments, I would heavily favor CRDs over CRLs in this economy. Let them take their balance out and pay taxes or repay over the next 3 years rather than an iffy plan investment in participants ability to repay the loan.

I know Mike describes the fund shares as a red herring but Pete (or Mike) can you elaborate on how the fund shares might factor in at the time of default and reporting of the default amount, etc.? If Pat took 100% of Pat's account balance as a loan, what fund balance would there be to have dropped down to 75% of original value as of the time of the loan? Does that suggest the plan keeps Pat's individual account invested in the funds held at the time the loan was made and the money loaned to Pat was made available from some source other than liquidating Pat's actual investments in the funds to make the loan?

You might want to tone down your rhetoric. This is a professional forum by professionals primarily for professionals. They are gracious enough to occasionally try and help the members of the public deal with issues. You are new member who has registered and only posted in this one thread. Usually when someone visits someone else's house they conduct themselves with manners and respect. Maybe the employer is at fault, but it has been like pulling teeth to get straight answers. Yet you have failed to demonstrate that you understand just how much responsibility you and your wife share in for this disaster. It is mind boggling how your wife can not know for five years that her deferrals have no been deducted from her paycheck. It is mind boggling that you can not know what your joint investment portfolios are doing over five years. You never checked to see that contributions were deposited and what the earnings were over time. Your conduct in this thread is not likely to inspire professionals to take time out of their busy days to receive abuse in return for their attempts to help.

You can go to your employer or to an attorney or to the DOL at this point and ask for help. But I don't have a lot of sympathy for someone that goes 5 years and doesn't look at a paycheck or question a w-2 or ask to see a statement or doesn't go online. It's incomprehensible to me to go that long.

How do you not notice for 5 years that no 401(k) deductions are coming out of your pay check? And how do you not ask for a statement for the 401(k) account you thought you signed up for? There are IRS fixes for failure to implement a deferral election but you probably have to show that you did turn in a valid enrollment form that your employer failed to implement. That said the fact that you are just now bringing this up 5 years later will likely not work in your favor.

you can definitely do both. Ther is no connection between the two limitations at all. Remember the loan is not a withdrawal anyway.

Agreed an amendment would be needed assuming the loan program does not already so provide, but wouldn't the timing of this amendment be covered by the deferred amendment date in CARES? Also, it appears that a qualified individual can take both a $100K in-service distribution and a $100K loan?

I have thought about how commercial real estate might be in trouble as people realize the technology is almost all the way there for an efficient home office.