Leaderboard

Bill's explanation is better but one would hope that there is a TFD, at least not that one is provided to me.

Or Read The Fantastic Document. Bill's mind is in the gutter!!! 😆

Last day of the seventh month, to be exact. So if payout was any time during the month of May, for example, the final EZ filing is due by 12/31 absent filing an extension (which would also be due by 12/31). And a final EZ filing is due even if the plan never exceeded $250,000 and never filed an EZ before.

Great, thanks.

There is no clear guidance regarding this that I know of. I think the answer is "yes". I base this on the fact the rules tell you when to start. The plan document tells you when to start. They don't ever tell you when to stop. I THINK the ERISA Answer Book opines with a "yes" also. To be clear I have never found a cite one way or another so I can imagine a reasonable case for "no" but that is not the one I favor. So far most of my clients have gone with my "yes" when I layout the two possibilities and the reasons for each answer.

Nice to know the spreadsheet still works. 🙂 Happy Veteran's Day. God bless those who served and keep those protected who serve today.

It is 7 months after the assets are all distributed from the plan.

Bill your time for consulting on this, it will be a lot more than $54!

Just to clarify, what gets confusing is that for 403(b) plans, it’s as though the individual is the employer. That’s where the related employer issue pointed above becomes relevant. For example, a Dr. who is in a hospital’s 403(b) and 401(a) plan can double up. If the Dr is in the hospital’s 403(b) and also in a 401(a) plan sponsored by a clinic that he or she controls, then it’s one 415 limit. For 401(a) plans, it’s one limit when there are multiple plans if the plan sponsors are related - controlled group or affiliated service group. There are separate limits if they are unrelated. Again, what’s unique about 403(b)s is that the individual, not the employer, is deemed to be the plan sponsor. That’s why you have to see what other plans are being sponsored by entities that are related to the individual, whereas for 401(a) plans, aggregation is based on employers that are related. If an individual is in two different 403(b) plans there is aggregation because there’s one sponsor - the individual.

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

If this is an ASG and treated as one plan with one ADP test (or safe harbor exemption) then yes, 3% SH must be made for all eligible employees every year.

Insurers can and do write QJSA contracts for missing participants - terminating DBPs are faced with that a lot - but those are pieces of larger contracts. I think you'd have a very hard time finding an insurer to write one contract, but I don't know that. Yes, I think turning over to PBGC would be the best alternative and, if this were a DBP in the same situation, would likely be the only viable alternative. In the DBP space, the PBGC views an unresponsive participant as a missing participant, but I don't know if they make the same leap for DC plans.

Wouldn't the partner's earned income need to be adjusted for 414s testing? See Treas. Reg. 1.414(s)-1(g)

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

C.B. Zeller’s point is in 26 C.F.R. § 1.415(f)-1(a)(2)&(3). And see 26 C.F.R. § 1.415(f)-1(f) for some wrinkles about § 403(b) contracts. For example, a § 415(c) limit counts annual additions to a § 403(b) contract and annual additions under a § 401(a) plan of an unaffiliated business the individual controls (more than 50%). An example is a physician who is an employee of a charitable hospital and is the shareholder of her separate professional corporation for another medical practice. Or a professor who is a university’s employee and is the member or proprietor of her consulting business. https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR686e4ad80b3ad70/section-1.415(f)-1

The 415 limit is separate for each unrelated employer.

I would not advise a client to do this. From the PTE: IBM stock ≠ cash. When I get questions from clients about in-kind transactions (typically contributions), upon questioning I find that the motivation is a mistaken belief that they can avoid reporting a gain on the asset. When I tell them even if permitted, it is treated as a taxable sale and the gain will be taxed, they lose interest. Refer him to legal counsel.

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

If you are still employed then this was likely an error which you should discuss with both your employer and the plan service provider to have rectified (i.e., repaid to the plan). You didn't mention any 20% tax w/h attributed to your balance, which further makes this look like a mistake. David's comment above only applies if you no longer work for the plan sponsor.

Sponsor's discretionary decision and then the acts necessary to execute that decision are separate issues - like deciding to terminate a plan (discretionary action, costs associated therewith not payable from trust) and then doing all the required actions to complete the termination which are payable from the trust. Is adopting a new provider's preapproved plan absolutely NECESSARY? No, but otherwise they have an unsupported IDP w/o a D-letter. So can you very readily argue that it is fiduciary prudency to adopt new document and a necessary action to fulfill fiduciary duty? I think that is clearly the case and see no problem paying such fee from the trust.

I thought it was settlor expenses that could not be paid by the trust. Settlor expenses being starting and terminating the plan, in my perhaps too-short hand. I don't think anyone would seriously question this as a plan expense.

If you can treat it as a required C3 restatement, there's no question. If it's just because the ER wants to do so, it's less clear. But if the ER makes the case that it's in the participants best interest, I would think so.

You may or may not. The partners will just be 100% in the 414(s) test. Just run the test. Can't be too hard.

Is the "remainder" less than $5K? Some plans include a provision that automatically distributes a balance below that threshold.

You can only roll over a payment that is an eligble rollover distribution. Generally, annuity payments are not eligible rollover distributions. As Cusefan advises, you need to look at exactly what the distribution options are, and it does not look good from the texts you sent. It is part of unfortunate plan document practices that plans include language that simply reflect certain legal requirements, whther or not the language/requirements are actually relelvant to that particular plan and the way it is designed. The language in your QDRO also matters relating to when you can start benefits even if the participant choses not to start. Look in the order to see if it mentions ability to start your benefits at the participant's "earliest retirement age". Frankly, if it is not there, and there is not a specific reason for it not to be there, I think it is malpractice on the part of the lawyer who drafted the provisions of the QDRO.

Unless the plan includes lump sum as a distribution option, the Plan Administrator is not permitted to pay your benefits in that form. The direct rollover provisions you cite are generic statutory provisions and do not mean that the plan has a lump sum option. The plan section describing optional forms of payment will disclose whether or not lump sum is an option. Sorry for your predicament, but unfortunately the rules (if being followed) cannot be bent to accommodate you.