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Can't say what the answer is without seeing the actual documents, but our solution is simple. Our "standard" loan policy says all vested sources are "lienable" (i.e. count for purposes of calculating the maximum amount available for a loan), but only "x, y, and z" (or whatever) are "loanable" (i.e. are the source of funds available to fund the loan (and may be limit it below the legal max loan available). The English language is so ... wierd ... just be crystal clear. And by the way, we'll take the plan on - away from our friends at Principal!

Mmm, we do it all the time (count the full vested balance in the 50% calc even if only allowing loans from deferrals).

Assuming the entity is eligible for a 403b plan, I'm not aware of any requirement to terminate the existing plan. It could be frozen, w/o termination.

It needs to be brought up to date. Whether that's a formal restatement or adopting the "termination package" that every document provider offers is dependent on the provider.

At least the AFN language specifically says you can skip ex-participants who've been fully paid out by the end of the notice year.

I concur, Bill - and further comment that in todays digital age, a lot of this is actually done on-line, via a service provider's website - which is NEVER checked by either the plan sponsor/fiduciaries or the (directed, ministerial - NON-FIDUCIARY) service provider (who shouldn't do so), until the claim is filed. It really is an "unseen by human eyes" scenario that is pretty common these days.

I assume the rest of this was that "they prepared the 1099s." Not surprising -AXA is an insurance company. For whatever reason, insurance companies tend to do WH and reporting, even if not a fully self-directed plan. Brokerage firms (generally) don't. If they didn't submit the WH, and I seriously doubt it, then you have to. You'll have to ask to be sure. Which raises the question...was the withholding submitted to the IRS? No offense, but if you don't know this, and don't know how to do it, maybe you should look to PenChecks or somebody like that to handle this going forward.

Not too clear on the situation from your description, but it sounds like she should have commenced in 2004 because actuarial increases to her benefit would cause such benefit to exceed the 415 limit of 100% of her high three-year average compensation (actuarial increases are often required after normal retirement age). Plans are required to commence benefits in such instance to avoid an impermissible forfeiture. The annuity option includes makeup of past annuity payments with interest, a correction the plan is required to make. I do not believe the makeup payments are eligible for rollover as they would be considered part of the annuity, but I would consider enlisting a qualified tax advisor for a definitive answer as the amount is likely substantial. I'm not sure a normal lump sum payment option would/should be possible as a correction, but this is an unusual situation. If the employee is retiring or is somehow allowed a new current "annuity starting date" (benefit commencement date, then maybe it's possible to get 17 years of annuity makeup and then a current lump sum of the present value of remaining annuity. Or is the lump sum being offered also retroactive to 2004? If so, that should be brought forward with interest. If a true lump sum in this fashion and no required minimum distributions (you say she is active) then that could be rolled over. Do not understand connection between workers comp rules from the 1980's and her retirement age.

Questions like these make me want to reverse it to, "Why would you *not* get an EIN???"

You cannot convert or restate a 401(k) plan as a 403(b) plan. Seriously re-consider keeping the 401(k) plan. It is legally permitted to terminate the 401(k) plan and start up a new 403(b) plan from scratch.

I'm with Bill, since I'm a coward at heart with regard to disclosures. Although there is no civil penalty for failure to provide, there are (last time I looked) possible criminal penalties for WILLFUL failure to provide. Although most would disagree, I think I'm too pretty to spend time in prison... All kidding aside, I think any potential for trouble isn't work the risk, for what would generally be a limited number of former participants in this situation. And putting myself in the Participant's shoes, it isn't IMPOSSIBLE (although quite unlikely, since participants neither read nor understand this stuff) that there might be something there that might bring into question something about the distribution. All that said, I'd have to say that the "risk" of not providing it is pretty small.

That’s an important caution. A plan’s administrator should not present a statement of the kind I describe unless the administrator’s uniform practice is not to look at beneficiary designations and the statement is factually true and not misleading.

It needs to be distributed to everyone with a balance whether or not still employed and to everyone eligible whether or not they have a balance.

I do the withholding and deposits for most of my clients. Those funds go to an omnibus account for my firm, and at no time do they go through the employer. The taxes are paid to EFTPS by my firm as a reporting agent on behalf of the plan. For IRS purposes, the plan made the deposit, not my firm. In cases where you outsource the payment and reporting to a third party, you basically transferring the benefit to the third party for payment. It comes from them, not from you (the plan). If Ameriprise paid benefits and deposited withheld taxes using its own name and EIN, they would do the 1099-R and 945. If they did the deposit as a reporting agent (on behalf of the plan), the plan is still the payor. There should be no situation where YOU issue a 1099 or 945 using in Ameriprise's name and EIN. The client needs to find out what services they have engaged Ameriprise to perform, period.

By moving all IRAs into a qualified plan, an individual can then do another variant of a back door Roth IRA contribution, even if not otherwise eligible to contribute to a Roth and is above the income threshold for a deductible IRA. Make a regular non-deductible IRA contribution and then immediately convert it to Roth. No recovery ratio calc since there are no other IRAs and the basis equals the amount converted.

There may be other complications I'm not thinking of off-hand, but could you spin-off the 401(k) portion into a separate plan, then terminate the 401(k) plan? The ESOP would not be a successor plan. I've done the opposite - added a new 401(k) to an existing ESOP by creating a new KSOP then merging the ESOP into it - and received a DL with the IRS treating the KSOP as a new plan. (This was after the elimination of the DL cycle, so the plan had to be new to get an initial DL.) Seems like the OP would be the same transaction in reverse, i.e., "un-merging" the two components into separate plans.

A 5500EZ must be filed for a one-man plan with over $250K in assets. Moving IRA money into the plan would make the plan hit that mark earlier. That may or may not be a big deal depending on diligence and oversight.

yes, this can be done. Many people do this to be able to borrow from the funds. It also may help with pricing of an investment since it will add more assets to the account.

It will depend on when your plan is effective. If they made it effective in 2020, you can make contributions for 2020. Your TPA or CPA should calculate the amount available for 2020. No more than 10,000 should be classified as deferrals since you made the election in that amount. You can make additional contributions that are considered employer contributions if your income allows for it. For 2021 you can update your 2021 deferral election any time up to the last day of the year. You will still have until your tax filing deadline for 2021 to make your employer deposits to the plan.

Based on what you are saying I don't see any reason why the split wouldn't happen per the terms of the QDRO. Maybe one of the QDRO experts will add if they agree or still see more issues.

In the unlikely event that you had no self-employment income in 2020 your election would mean nothing and can be ignored. In the alternative, what is the effective date of the plan? If it is 1/1/2021 or later, again, your election would mean nothing and can be ignored. In the alternative, if the plan was effective some date in 2020, but the document allows for a separate effective date just for salary deferrals and that date is 1/1/2021 or later, again, your election would mean nothing and can be ignored. Does one of these three scenarios fit your facts?

Just a heads up. Within the last two hours I received emails from two different TPA firms with a link to a Share file document. I do not deal with either of the TPA firms so not sure of the source of the emails: Bush Retirement Plan Services and BDS Consulting Group Has anyone else received odd emails.

Yes, exact same and I assumed it was spam or worse. Thanks for mentioning it.

You switched tenses; is this (after-tax) something that actually happened? Come again? I don't know what a true up for deferrals means. Anyway, aside from my nit-picking above, I agree with the prior posts, which essentially say this boils down to a mistake by the payroll company. I suppose there are plans out there that somehow limit deferrals on comp above $285K, but I've never seen them and am not sure what that language looks like or why someone would take pains to do something so stupid. I don't think it is too late to fix it and it should be fixed. I think we need to organize a Reddit mob to teach these idiot payroll companies a lesson.