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justanotheradmin, it can (and has), been done, but Kansas401(k) has a pretty good list of the problems here, to which I will add that theoretically the plan could be involved in a lawsuit regarding the investment, e.g. real estate development. Doing this, if the plan must, requires really good forms with indemnification provisions.

justanotheradmin: Here is a bit more ammo for your argument: 1. prohibited transactions can happen pretty easily with unregistered investments unless everyone has a really good handle on what they are doing (and they usually do not); 2. unregistered investments must have 100% ERISA bond coverage, not the 10% required with registered investments; 3. some LLC's can trigger UBIT (unrelated business income tax) in which case taxes are filed under the plan name but the investment owner(s) generally are held responsible for the taxes 4. illiquid investments like LLC's can cause issues down the road if there are not enough liquid assets for fees and RMD's

On a personal note, as a person who got back into the dating pool after being divorced for 10 years, I quickly found out that you can find marriage and divorce records online for almost any county in the United States, because people tend to "Fudge" the details about marital status . . . .

If the President is not paying any portion of the premiums, he or she is not participating in a cafeteria plan. Therefore, this arrangement, by itself, does not violate the cafeteria plan nondiscrimination tests. I recognize that this seems counterintuitive.

Pension Admin in Ohio, the plan’s administrator might want its lawyer’s advice about how much diligence the administrator ought to use in deciding whether to believe the participant’s statement. And the administrator might want its lawyer’s advice about how to clarify the record of its handling of the participant’s claim to follow ERISA § 503 [29 U.S.C. § 1133] and the plan’s claims procedures. The administrator also might evaluate the plan’s, its administrator’s, and the employer’s risks. Some of the potential claims against one or more of them might include the spouse’s claim for his or her survivor annuity, and the plan’s claim against its fiduciary for paying an amount the payee was not entitled to. Even if the participant is eager to get a distribution, his claim if the administrator denies the non-annuity distribution might be weak if the plan grants the administrator discretion in finding facts. And the participant might be reluctant to sue because it might expose him to counter-claims and cross-claims (if now he’s telling the truth about never having a spouse). Further, the employer that paid health benefits or a portion of health insurance premiums might want its lawyer’s advice to evaluate claims for what the worker and the not-spouse stole (if the other person was not the participant’s spouse). If a pension plan fiduciary’s reason for allowing a participant’s election without the spouse’s consent is that the consent “may not be obtained because there is no spouse”, that fact must be “established to the satisfaction of [the] plan representative[.]” ERISA § 205(c)(2)(B) [29 U.S.C. § 1055(c)(2)(B)]. The plan’s administrator, in deciding whether the fact is sufficiently “established” must act “with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent” person experienced in managing a similar defined-benefit pension plan would use. ERISA § 404(a)(1)(B) [29 U.S.C. § 1104(a)(1)(B)]. A cautious person might not take at his word a person who, if he’s telling the truth now, admits he was a fraudster and thief, and committed at least one Federal crime. 18 U.S.C. § 1027 (false statements). Likewise, the participant’s three inconsistent statements about his tax returns suggest a lack of honesty. But what steps to take turn on the particular facts and circumstances and the proper fiduciary’s decision-making. Unless the TPA is the plan’s administrator or claims administrator, the TPA might prefer to limit its involvement to furnishing to the administrator information the administrator does not yet know and otherwise steps not beyond the TPA’s contracted service.

Talk to your HR department. Fidelity works for your company. The company my lean hard on Fidelity to get it right but in the end the company not Fidelity is most likely the final decision maker. Fidelity is way more likely to listen to the people paying them.

I don't know, you have years of him representing himself as "married", and now he is saying he was never married. If I am the PA, I think I would want more information. He could just be lying again because he doesn't want to get spousal consent. Not sure what else you can ask him to do, but I would continue to reach out to PNHS and get her side of the story. Maybe you just pay him a J&S pending resolution? If he really was never married, and has signed that affidavit, you should inform him that you will be suing him and PNHS for fraud to recover years of excess medical coverage. Unfortunately, you probably can't hold his pension benefit as payment for the medical fraud, but I am sure those damages will be significant and he admitted he committed fraud. You need to talk to an attorney and file suit against both parties.

Fidelity would have acted on a QDRO, rather than a divorce decree (since the latter is usually not structured to encompass the former). Your first step is to review the terms of the QDRO. If it does not conform with the intent in the divorce decree, you should investigate why? who did it? who reviewed it? etc. (Don't blame Fidelity until you determine what the relevant documents said.)

Yes, it is done all the time. Shouldn't be discriminatory in application.

Just my opinion: your good intentions (ie, let's find out what is actually true) may be more than you need to do or should do. It appears you doubt his statement so you want to "dig further". However his statement (in writing) is the documentation you need. If (later) it becomes apparent that he did lie, that documentation points the finger at him, not you. You do not need to police his (possible) lie(s).

I described it on the phone today that it is essentially like Brewster's Millions, where he had to spend the $30 Million to get $300 Million. Pretty much the same concept.

Something doesn;t feel quite right about jacking up a cash blance allocation 95% allocated to the owners in that 8 week window and applying it towards uncle sam forgiving a 6 or 7 figure loan. I just don;t think I could sleep at night taking such a position. Becuase things that seem to good to be true often turn out to be untrue, and because the PPP is already too good to be true (except of course it is) I have been advising to just fund what is customary for that business. If you always fund 10%, of pay, then fund 10% of the 8 weeks during the window. If you just do 3% Safe Harbor Nonelective, for several years running, then funding 10% during the 8 week window just feels a bit too aggressive for my blood. But I always tell my clients "if someone is adviing you an employer contribution is eligible, then I will run the calculation." Of all the things I am responsible for, determining eligiblity for a ppp loan forgiveness just is not one of them.

Hmm. I'm not aware of anything in Rev. Proc. 2011-44 or Rev. Proc. 2011-4 that says a plan cannot be merely in proposed form, and PLRs typically are sought for proposed transactions rather than a done deal ... and yet the point of Rev. Proc. 2011-44 was to add a requirement that "interested persons" be notified of the ruling request, such as plan participants, of which there would be none in a proposed plan situation... Hmm. Certainly the IRS continues to issue church plan rulings, such as this one from January -- https://www.irs.gov/pub/irs-wd/202001008.pdf Does anybody happen to follow these church plan PLRs regularly, who has seen one that addresses a plan that is proposed rather than already-adopted? Maybe you could make a phone call to Laura Warshawsky, who is the author of the above-cited recent PLR.

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

What does "processing" mean? Assuming the form is complete, why would you not mail it?

As a pension plan, a money purchase plan would still be subject to the age 59.5 in-service distribution rules.

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 can pretty much guess and I don't think the results in this case argue for a limit of less than $100,000. Guess 1: Tax reporting will show $101,000 as a taxable distribution. Guess 2: If Pat elects tax will be owed on the entire amount spread over three years, reduced of course by amounts rolled over as per the rollover provisions. Pat's fund shares is a red herring. Most people who take a distribution in this fashion will spend a good chunk of it on living expenses in the near future. Pat's assets are expected to dissapate.

This is my understanding. I believe in 2009 plans could still choose to continue paying on the same schedule, but it wouldn't technically be an RMD.

I will keep beating this horse until it gives. Look at Notice 2005-92. It's not CARES Act guidance, but interprets the exact same statutory language in Section 103 of KETRA. Footnote 3, on page 14, reads: The Department of Labor has advised the Department of the Treasury and the Service that it will not treat any person as having violated the provisions of Title I of the Employee Retirement Income Security Act (ERISA), including the adequate security and reasonably equivalent basis requirements in ERISA section 408(b)(1) and 29 CFR 2550.408b-1, solely because the person made a plan loan to a qualified individual in compliance with KETRA section 103, Code § 72(p), and the provisions of this notice. I can't imagine the DOL now reversing course and asserting an ERISA violation based on a lack of adequate security, especially where doing so would render the statute's explicit loan increase illegal for anyone with a vested balance below $100,000.

Is the ability to pay out RMDs a plan decision, but the taxation not? For example, the plan sponsor decides that RMDs will be paid out as usual, but the distribution itself is not taxed in the same manner as an RMD (for example 20% withholding would apply, eligible for rollover, etc).

Our interpretation is that all RMDs are waived for 2020 and it is not optional.