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Too the extent that the benefits go "directly" from the plan to the children, there are no assets that are probateable. Keep in mind that plan benefits are not "assets" of the participant until distributed (legal title to the assets are held by the Trustee) and consequently upon death, the account is not part of the decedent's estate - and the probate court has nothing to do with them (of course, unless the plan provides that the benefits go to the "estate.")

Boy, am I on a different planet from either of you. If you look long and hard you will find that there are already existing rules that tie the 52/53 week plan year to, essentially, the calendar year that it just makes sense to use. So, there will be one 5500 for each calendar year (showing the beginning of the "plan year" as 1/1 and the end as 12/31). Then the actual period over which the assets and transactions are determined is from the beginning of the 52/53 week year to the end of the 52/53 week year. Simple, huh?

The old loan plan has to allow a rollout of a loan (usually after amendment at termination to allow a loan to be rolled out for a business event, like a merger, or sale) and the new plan has to allow a roll-in of loans (also typically for a business event). The former employee of one plan becomes an employee in the new company immediately (even if not allowed to participate in the new 401(k) plan) and the loan can be transferred almost immediately from trustee to trustee even before employee's first contribution to the new plan. Once the loan is moved over loan payments can resume via payroll even if not contributing normally. I think that if the two 401(k) plans will eventually merge then new payroll keeper can withhold and submit loan payments to the old 401(k) which it assumes control of if such old 401(k) is not terminated at closing. That's a high level view, I admit.

Participant submitted the paperwork for a Coronavirus Related Distribution on December 24, 2020. The assets were transferred out of the participant account and plan trust account on December 26th. They were transferred to a paying agent. The paying agent didn’t send out the distribution until January 4, 2021. The paying agent is refusing to treat this as a coronavirus related distribution because the check wasn’t sent until January 4, 2021. (Past the 12/31 CRD deadline.) They will be issuing a 2021 1099 distribution for the full $100,000. Thus the participant will have to incur immediate tax consequences and penalty for taking this money out. Has anyone else had any issues like this? We are trying to build a case that because the money left the participant account and the plan’s trust account on December 26th that this should be credited as a 2020 Coronavirus Related Distribution and the paying agent should treat it as such.

If the loan is offset, there is no asset to roll to the new plan. If the new plan directly accepts the loan note as a rollover to the new plan, that is different. The QPLO rules allow you extra time to come up with the cash needed to rollover the outstanding balance of the loan, I don't see anything that would lead me to believe you could roll the actual loan note to a new plan by the extended tax filing deadline if it was offset or defaulted and if defaulted instead of offset I don't think you can roll it over at all. That is if the loan has code 1L, 2L or 7L it is ineligible for rollover. If it has code 1, 2, or 7 it falls under the 60 day rollover rule. If it has 1M, 2M or 7M it qualifies for the October 15th (or next business day of weekend or holiday) of the year following offset timeline for paying off as rollover. If it has code G it was directly rolled from one plan to another. I think that covers the various scenarios.

I don't think so. Offset, by definition, means the loan has been extinguished by reducing the account to pay it off. "Q&A-9 defines a plan loan offset amount, in general, as a distribution that occurs when, under the terms governing a plan loan, the participant's accrued benefit is reduced (offset) in order to repay the loan." While a participant may rollover cash in the amount of the loan offset, I don't see how a loan itself may be rolled over once it is offset - it no longer exists. Having said that, if the paperwork/key entries have not actually been made to literally process the offset, I could possibly see tweaking the loan policy to make the actual offset date June 30 (if that is within the outer bounds of what is allowed) and do a direct rollover of the loan.

Agree, need to make sure this provision has been adequately communicated.

I agree with Mike. Many plans that offer highly subsidized early retirement benefits only offer them to those participants who go directly from active to retired status. IOW, in order to receive the subsidy, you must be eligible to retire at the time you separate from service. If you terminate prior to being eligible to receive a retirement benefit, often a different set of early retirement reductions would apply. You might want to re-check the document to make sure the unreduced early applies to all terminated participants. Either way, you do not need to provide an early retirement subsidy to a participant who didn't make a timely request. I guess that assumes they received an SPD and the benefit was clearly defined in the SPD, IOW, if they were never notified the benefit exists, the DOL may take an interest.

Yea its a mess for sure, especially since we can probably expect the loan delay to be optional even if you adopt CVLs.

How do you get to the conclusion that a payment due 1/15/21 can be deferred for a year? The Act says "subsequent repayments" shall be adjusted for the accrued interest. Not adjust for further deferral....

Except the Act specifically says only payments due in 2020 can be deferred. How do you justify deferring next January's (and February's...) payments until April 2021?

Someone besides me? I wold love to see it if anyone knows where it is? Do you think mine is ok?

I don't think you get an extra year to pay off the loan. The CARES Act Section 2202(b)(2)(C) states "In determining the 5-year period and the term of the loan under subpar (B) and (C) of Section 72(p)(2), the period descried in subpar (A) of this paragraph shall be disregarded." I read this to mean the one year delay is disregarded in determining the maximum permissible term of the loan. I think this means the participant still has to pay off the loan within 5 years of the loan's original date. This is the same treatment accorded loan payment suspension during a leave of absence.