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First thing would be to RTFD to see what it says. there probably isn't any special language that helps, but it should be checked. But this one screams for consultation and advice under attorney-client privilege. IRS, DOL and/or participants could all cause trouble for this employer.

This is a classic example why the silly and artificial term "solo 401(k)" is so terrible. It is a marketing term not a legal term. This guy had a 401(k) plan as there is no such thing as a solo 401(k) plan in the law. However, by some marketer adding the "solo" in front of the term 401(k) it most likely gave this person the impression this was different than a regular 401(k) plan that has to cover employees.

Well SIMPLEs have a transition rule for employers that are on the ~100 ee bubble, so they might be fine with a SIMPLE in 2022. But if they want a 4k in 2022, it seems to me they can go ahead and establish it. The code doesn't say they can't adopt a qualified plan, it just says the SIMPLE is no longer a qualified salary reduction arrangement if ees benefit in a qualified plan. The best time to do this is as of 1/1 before any contributions are remitted to the SIMPLE for the calendar year, to avoid the whole issue of what to do with them, how to communicate it to ees and how to report on payroll, W-2, etc.

It is likely that the terms of the agreement does not require them to take action, other than resigning if they know that the plan has not been amended. I am assuming that this is a prototype, because of the "soloK reference". I wish I could provide helpful responses. But, engaging an ERISA attorney is the only solution I come up with. Good luck

Internal Revenue Code of 1986 (26 U.S.C.) § 401(b)(2) provides: If an employer adopts a stock bonus, pension, profit-sharing, or annuity plan after the close of a taxable year but before the time prescribed by law for filing the return of the employer for the taxable year (including extensions thereof), the employer may elect to treat the plan as having been adopted as of the last day of the taxable year. http://uscode.house.gov/view.xhtml?req=(title:26%20section:401%20edition:prelim)%20OR%20(granuleid:USC-prelim-title26-section401)&f=treesort&edition=prelim&num=0&jumpTo=true

From the Federal Register with regard to Reg's proposed in 2019: Income attributable to 403(b) elective deferrals ineligible for hardship distribution due to failure of the law to amend Sec 403(b)(11); QNEC's and QMAC's in a 403(b) custodial account are ineligible for hardship distribution. However, the FTW plan document for a 2021 restatement we worked with specifies: "Hardship NOTE: Safe Harbor Contributions, Qualified Non-Elective Contributions, Matching Contributions held in a custodial account, and Non-Elective Contributions held in a custodial account are not eligible for hardship withdrawals." Check your document very carefully.

Yes, it was $300 It was a mistake and I'm still employed. I spoke to the person in charge of executing the QDRO and they will transfer back the money and the company will pay out any gains lost due to the mistake. Thank you all! -V

Although it is not required, you could notify the PBGC that the sponsor is eligible for disaster relief before actually submitting the comprehensive premium filing; that could help avoid having them send a notice to the sponsor. See emphasized section below. https://www.pbgc.gov/prac/other-guidance/Disaster-Relief#notifying

No one is asking the obvious question - WTF would you do a solo owner-only 401(k) with a SHM?

I don't see how you possibly add enough revenue without going deep into 3(16) services. Certainly not enough for the potential risk you are taking on. Even less feasible for a smaller provider that isn't already staffed to keep up with the policy decisions, education, and training that comes with it.

Yes, SIMPLEs have to have a termination notice by 11/2 for the next year, so if someone has a SIMPLE they are apparently stuck with it, at least if they don't adopt a qualified plan for 2022. But if they do adopt a qualified plan, the SIMPLE is no longer valid, termination notice or not. Section 408(p)(2)(D) says: It DOESN'T say the employer cannot adopt a qualified plan, it just says the SIMPLE won't be a qualified salary reduction arrangement. So it may or may not be terminated if a timely notice wasn't given, but regardless, it is still invalidated for the year.

How much would it cost to give 100% vesting? Usually, not much. Take the high road, please.

About a § 403(b)(7) custodial account: The agency’s rule distinguishes between amounts attributable to elective deferrals and those that are not. Compare 26 C.F.R.§ 1.403(b)-6(c) with -6(d). https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/section-1.403(b)-6 Further, -(d)(2) provides: “[A] hardship distribution is limited to the aggregate dollar amount of the participant's section 403(b) elective deferrals under the contract (and may not include any income thereon), reduced by the aggregate dollar amount of the distributions previously made to the participant from the contract.” Different rules could apply regarding a § 403(b) annuity contract or a § 403(b)(9) retirement income account.

The short answer is Yes, you can sign the 5500 if you are named as the Plan Administrator in the plan document. With that being said though, you should consult with your ERISA attorney, make sure that your service agreement is clear on the duties you have taken on, and make sure that you have systems (and insurance) in place to deal with your 3(16) responsibilities. You may also want to review IRS form 8822-B.

Without looking up the details of the PTE, my recollection is that you take the amount you would have paid as the excise tax, but pay it to the plan instead. You also have to provide a notice to participants explaining what happened. There are limits on it; you are only allowed to use it for PTs below a certain dollar amount, and you can't use it if you've done it within the last X years. But in my experience, it's the notice requirement that drives people away from using this. Most employers would rather send the IRS a check for a few bucks than have to tell their employees they messed up the 401(k) plan.

This then would be a "disclaimer of opinion", not a valid reason for the auditor to withhold or not sign the reports. From the instructions for Form 5500, Schedule H, Line 3a(3), "Check if a disclaimer of opinion was issued. A disclaimer of opinion is issued when the IQPA is unable to obtain sufficient appropriate audit evidence on which to base the opinion, and the IQPA concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive." This is why this category originally existed, when the auditor couldn't timely, or ever, obtain all the materials it thought was needed, or prove that there was actual wrong-doing and to what effect it impacted the participants. The limited-scope use of this category has become the default, and most audits are physically performed by junior associates who may not have any experience otherwise. Obviously the reports would be full of warnings and whatever notes the auditors wish to include, and management may also include a rebuttal letter of explanation to the audit report if they so desired. But it is not an excuse not to issue the report, if they are reluctant to do so for reasons not supported by SAS 136, fire them for breach, and hire someone who understands the situation and is willing to work with what you have available.

What Mike is driving at is that it depends. If the 10-15 employees at the main office are all NHCEs, then excluding everyone else isn't an issue. So, we can't assume things without the info and you shouldn't either.

Well the Subs are part of a controlled group with the Main Office since the main office owns 100%. Your plan can cover just the Parent Main Office and exclude the subs, it then becomes a question of whether or not that passes testing with all the employees of the subs excluded. I have no idea what the demographics look like but I'd guess that testing would likely be problematic.

Beating this to death... Adjust your thinking as follows: I have a participant with an RMD, say $10,000 He wants to take more than that, say a total of $15,000 The extra $5,000 is not an RMD (Required Minimum Distribution). It is just a regular distribution, and as others have noted, it may or may not be permitted. It is eligible for rollover and thus subject to 20% WH.

Maybe. The 3(16) Administrator may be engaged for only some of the general Plan Administrator duties, as long as they are spelled out. We had a 3(16) product where we would do SOME of the 3(16) duties and not be responsible for the others. We added plan language that "OUR FIRM will be considered a 3(16) Plan Administrator as outlined in attached 'NAME OF ADDENDUM'." In the Addendum, it outlined the the items we were responsible for such as signing the 5500; approving distributions, loans and hardships; and a few other things. It was noted that our firm was ONLY responsible for the items on the list and the Plan Sponsor, acting as Plan Administrator would be responsible for other duties of PA (or delegating those duties to another 3(16) administrator) such as distributing required notices, tracking eligibility, etc.

Plans are not required to permit this. Check the plan document and make sure terminated participants are allowed to request amounts in excess of the RMD but less than their full account balance.

"Plan administrator" means the ERISA 3(16) plan administrator. That entails a lot more than just signing the 5500. If you want to know more, is just so happens that Ilene Ferenczy is doing a free webcast in less than a couple of hours from now on this very topic. You can register at http://www.erisapedia.com/webcasts