Leaderboard

Yes, although the current balance would have to be rolled over with the loan, so this would require two separate distributions/rollovers if the same participant is getting another contribution. Check with the recordkeeper as well. Each participant would need to elect a rollover (including their account balance with the loan) individually.

It may help to break out the two entities involved as well. The corporation itself still exists; it simply has a new owner. The ESOP is not the plan sponsor; the corporation is. The corporation is created under state law, which as Peter notes generally requires that a corporation have at least one officer. (For example, one state I do work in specifies two different offices that must be filled, but they can be filled by the same person.) The corporation is still the entity employing employees, conducting business, etc. The corporation has a board of directors; the ESOP does not. Even after being sold to an ESOP, the corporation is under the control of the corporation's board of directors (who generally are appointed by the ESOP trustee in the trustee's capacity as the sole shareholder). The people you are looking for will be at this level. The ESOP is a retirement plan sponsored by the corporation. The ESOP is the corporation's sole shareholder. It has a trustee, administrator, etc., but generally would not have officers, employees, or a board of directors. From there, I think Peter's comment will help you figure out which individuals are officers for this particular issue.

That's a simple fix under EPCRS. Just move the excess amount (adjusted for earnings) to the suspense account. The employer can (must) then use those funds to offset the next employer contribution until the amount is exhausted.

As Bri mentions, it's pretty common to allow loan rollovers in this situation. It's simple in theory, but the logistics can be challenging (for example, rolling over the loans before the cure period expires, especially if the recordkeeper requires 45-60 days to terminate the plan and will not allow individual distributions before then; catching up any missed payments during the transition; re-amortizing if the seller's and buyer's payroll periods differ (every two weeks vs. twice a month); setting up loan repayment deductions with the buyer; etc.).

Sure - many plans allow loan balances to be rolled over, even if they become due and payable upon termination of employment upon a separation from service with the plan sponsor. (And yeah - definitely make sure the buyer and its plan are cool with accepting such a rollover and can arrange for a new payroll deduction agreement, etc.)

So? The rule under 1.401(m)-3(d)(2) doesn't say discretionary matching contributions. The overall rate of matching contributions does not increase as the amount of deferrals increases in this scenario.

The second-to-last sentence in 1.409A-3(b): "A plan may provide for payment upon the earliest or latest of more than one event or time, provided that each event or time is described in paragraphs (a)(1) through (6) of this section."

But the gist of this thread is that if participants actually rolled the money over, having been offered all options and waiving the annuity benefit, then it lost the MP flavor and is not subject to J&S. If the money was transferred and they didn't have to waive the annuity benefits (and get spousal waiver if applicable), then it was something other than a rollover. We generally did these as mergers.

The IRS Plan Fix-It Guide covers this topic: https://www.irs.gov/retirement-plans/401k-plan-fix-it-guide-eligible-employees-were-not-given-the-opportunity-to-make-an-elective-deferral-election-excluding-eligible-employees#:~:text=Generally%2C if you didn't,for the missed deferral opportunity.

The IRS might find that this is an abusive plan design relying on "short service employees" to satisfy testing. There is no regulation defining it so it would be up to the agent auditing your plan.

I really like the Corrections eSource; it is like a searchable, indexed, and hyperlinked version of EPCRS with examples. I almost always find it much faster to find what I'm looking for in the Corrections eSource, then follow the reference from there into RP 2021-30. Basically, they said that it's their opinion that the corrective contribution takes the place of the missed contribution and wouldn't be counted in 401(a)(4) testing.

And here’s another variation: 1. The plan’s sponsor decides that every individual annuity contract no longer is a plan investment alternative. 2. The plan’s administrator informs each affected participant that her annuity contract will be delivered as a direct rollover to the eligible retirement plan she specifies or, absent a proper direction (or if the other plan refuses the rollover), delivered to the participant (no later than 90 days after the annuity contract no longer is a plan investment alternative). This presumes each annuity contract already states provisions that meet I.R.C. § 403(b). 3. If done carefully, the result is that the individual holds the annuity contract, which is no longer the plan’s asset. 4. Even without a rollover, a distribution of the annuity contract does not count in the individual’s income. Rather, the individual has income when she takes a distribution from her annuity contract. The insurer might try some resistance. But there might be nothing the insurer can do to the employer if the employer never was a party to the individual annuity contracts. See Internal Revenue Code of 1986 [26 U.S.C.] § 401(a)(38) allowing qualified distributions of a lifetime income investment, or of a lifetime income investment in the form of a qualified plan distribution annuity contract 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 § 402(c)(8) http://uscode.house.gov/view.xhtml?req=(title:26%20section:402%20edition:prelim)%20OR%20(granuleid:USC-prelim-title26-section402)&f=treesort&edition=prelim&num=0&jumpTo=true § 403(b)(11)(D) allowing such a distribution without waiting for age 59½, severance, or hardship http://uscode.house.gov/view.xhtml?req=(title:26%20section:403%20edition:prelim)%20OR%20(granuleid:USC-prelim-title26-section403)&f=treesort&edition=prelim&num=0&jumpTo=true

You wouldn't necessarily even need a new plan for this. It is common to have more than one annuity carrier in the same plan, and to cut off new contributions to an annuity without requiring people to move the old money. Using just one plan avoids the need for two Forms 5500, etc.