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It is entirely a matter of interpreting the plan document language.

Sure. The IRA contributions will just be (most likely) either partially or all nondeductible. But that's their issue, not the TPA's issue.

It matters. But if they deferred the comp, you really don't have an option to not make the contribution. You need to correct now by making the deposit, calculating and contributing lost earnings, paying the associated excise taxes, filing VFCP, and possibly amending prior year Form 5500s. As Bill said above, it is really not different from an employee deferring from W-2 comp without the contribution being made to the plan.

If they made the election, then the issue is the deposit and it should be corrected immediately. I don't see this as being different than a w-2 employee making an election and it not being deposited.

Having been in this situation many times I believe that none of the IRA should be deductible.

I would do 2 true-ups.

I'm not sure if I'd want my employer to know I'm being kicked out of my house or that I'm being treated by the community psychiatric hospital. People do talk even though they shouldn't. (This is not to say that the OP is in any of these situations)

Your analysis is intelligent and not inconsistent with any authority known to me. As with some other Roth phenomena, the "fairness" in any particular situation is questionable, explained only by some practical considerations. One of those considerations is the ease and clarity of accounting. It is very simple to have a rule that a Roth IRA clock is set at the opening of the Roth account (requiring a deposit), without regard for the character of incoming funds, such as the aging in a Roth 401(k). To look at the incoming funds would be more complicated. A Roth IRA transfer incident to divorce, at least when the transferee does not already have a Roth IRA, requires a new Roth IRA in the name of the transferee, requiring the 5-year clock to start on the new IRA. Another way to approach it (apparently not taken by the law), would be to "split" the IRA and maintain the character of the funds (already matured 5 years) in the "spun-off" account. The IRA owner would still have to qualify by age for tax free distribution. Under the circumstances, this would seem more appropriate (especially when both parties are older than 59 1/2 and the divided Roth IRA is older than 5 years). But a general rule that examines the maturity of the incoming funds rather than the age of the recipient account wold be much more complex and require more record keeping. Thank you for your efforts to determine the mandated outcome and share.

In the context of a DB plan, there is no PBGC coverage unless the church requests it AND elects for the plan to be subject to ERISA. So absent that election, not only are there no meaningful minimum funding requirements, there is no PBGC backstop. Participants uneasy about that combination could motivate a church to elect ERISA coverage. That rationale isn’t there for DC plans, but as QDROphile says, participants might still be happier if they knew that ERISA-level fiduciary principles applied there.

I think Mojo's explanation is clear, but building on it let me try to simplify among the three approaches in his first paragraph: * If you want super simple and are not worried about the participant's ability to start paying as of 1/1/2021, go with his first alternative. * If you enjoy middle school math for the heck of it and want to drive the participant crazy, go with #2. * If you want to give the participant a break on repayment and still keep it pretty simple, go with #3.

I've checked my sources and can find nothing definitive. But TR 1.408-8(A-5)(a) and IRC section 401(a)(9)(A)] make clear that when a spouse is named sole beneficiary on deceased spouse IRA and makes the election to roll over the IRA into his/her own, the funds are intermingled and so fall under the rules effecting the surviving spouse. It would seem logical that an IRA or ERISA plan directed by the divorce decree to the spouse, that once the assets are in the divorced spouse's IRA, they will fall under rules affecting that spouse meaning the divorcee's holding period receiving the rollover would apply. Similarly, the 5 year holding period on the Roth component of a 401(k) Roth will reset to whatever the holding period is on the Roth IRA it is rolled into, not the holding period of the 401(k)-Roth.

If your employer lets you go, you don't HAVE to pay back a loan. Any outstanding amount will become taxable income to you. The hardship withdrawal is also taxable income to you.

Assuming your Plan allows for Hardship, the answer is - it depends. The Plan Administrator under ERISA, named in the Plan documents and listed in your SPD will need to review and approve your hardship withdrawal, including any supporting documentation they require to substantiate the withdrawal. In most smaller plans, the Plan Administrator is often your Employer. If the Hardship is for medical reasons, HIPPA rules will generally limit the amount you need to disclose. You want to start with your benefits department to ask the right questions. This also being 2020, if your request in anyway remotely related to COVID-19 you might want to ask them if the Plan is allowing "CARES Act distributions for COVID-19" and if so what is their self certification process which would eliminate the need for much of the documentation that might be required for an ordinary hardship withdrawal request.

Yes the amount being deducted in 2019 goes against the overall 25% limit for 2019.

Because the participants are cynical about throwing themselves at the ineptitude (or worse) of the church governance? You might be surprised at the ignorance of the concept of "fiduciary responsibility" in churches. ERISA at least provides a framework for reference.