Leaderboard

ASPPA has apparently been in touch with IRS to find a resolution -- see this November 7 article Their suggestion, pending further advice from IRS, is a(nother) response with a reference to the September 1 issue of IRS Employee Plans News. They also provide a contact at ASPPA who may be able to help.

If it's eligible for rollover, it's subject to the 20% mandatory withholding.

Agree. The RMD for the year of death is calculated as if the participant lived through to the end of the year. But it must be taken by the beneficiary ( 1099-R in beneficiary's TIN). The deadline is 12/31/2023- however, the excuse tax is automatically waived if it is taken by the beneficiary's tax filing due date, plus extensions.

Lou S, I think the beneficiary is entitled to everything in the account at time of death. All the 401(a)(9) regs say is that you still need to make the year of death RMD. But it goes to the beneficiary.

Eaglepi, say you work for a company. For a week's work, they owe you $1,000 and they run that through payroll. Withhold federal income and FICA, so you actually receive in cash, say, $700 and change. But the full $1,000 goes on your W-2. It's the same thing with 401(k). And just as with wages, you credit whatever they withheld against the calculated tax on your 1040 when you file.

Fundamentally, (or should I say SIMPLy stated), an employer with a SIMPLE IRA cannot have any other retirement plan. https://www.irs.gov/retirement-plans/plan-sponsor/simple-ira-plan

I believe the DOL equivalency options are all pretty generous for the employee 10 hours per day 45 hours per week 95 hours semi-monthy 190 hours monthly. So per diem - 51 days would would put them over 500.

And if they don't track hours, there is typically a provision in the plan to allocate hours to those people via an equivalency.

oops! Yes, 2023. Thank you!

To be precise, such "non-applicability" contains a pre-requisite. For example, IRC 411 (minimum vesting standards), see subsection (e)(1) for the governmental plan exemption. However, please keep reading: subsection (e)(2) includes the statement, "...if such plan meets the vesting requirements resulting from the application of sections 401(a)(4) and 401(a)(7) as in effect on September 1, 1974." Thus, ERISA exemption is conditioned on meeting pre-ERISA requirements. There are several other similar IRC sections.

Happy to help. The entire BenefitsLink news archive is searchable -- that's where I found it.

None that I am aware of. Also, I know in PA, plan documents are not even required so some municipalities just operate from ordinances. Plus, a lot of the ERISA rules do not apply to governmental plans, so be careful when trying to pound the round peg into the square hole.

Thank you, Lois. I changed my search and the article populated for me. I tried to update my post but couldn't find it (haha).

To to make sense of this, one must know the terms of the QDRO. One can infer some things by your statement that both the participant and the alternate payee were offered elections, but inference is not a good basis for understanding, and certainly not assurance. You could ask the current administrator now to state your husband's benefit. If you get the same answer: "Total Monthly Benefit $2,857.28; Benefit to Spouse After Your Death $1,857.23" and you are identified as the spouse, that should be it unless there is some mention of the effect of a QDRO on the benefit. If there is no mention of the QDRO, that would be consistent with the inference described in the preceding paragraph, that the former spouse's benefit under the QDRO is a separate interest that was dealt with separately at the the time of the benefit election and has no connection with your husband now. You cannot rely on anything in this message.

If the Plan was in a packaged vendor program, it's possible the Trustee can get the final payout amount from that custodian, assuming they haven't been swallowed by some other company in the interim. It would probably have to be the Trustee that was on record with that custodian and you'd likely need at least the contract number and the participant's SSN. If the client issued their own checks from the trust, we'll best of luck. But yes the letter saying Plan was terminated in XXXX and all benefits have been paid. We show no record of benefit due to you from the XYZ Plan. That usually makes former participants disappear.

I won't go into the could have should have scenarios as it wasn't your client at the time. What we have often done is have the Plan Administrator write a letter to the claimant saying that the letter from Social Security indicates that you may have a benefit due from the plan, not that you do indeed have a benefit due from the plan. Our records indicate that the plan had been terminated (add year) and all remaining benefits due were paid out at termination with no further benefits due. If you did not receive your benefit at that time, you likely elected to receive it earlier or it may have been involuntarily paid as mandated by the plan if it was a small account balance. We have no record of you having a current account in the plan and ask you to review our historical bank, IRA, brokerage and other financial records for your payment. Sometimes this is enough to jog their memory or otherwise make them go away satisfied that they did some time ago get their money. If not, then things can get tedious, trying to secure prior bank records, old 5500's and the like to figure out when the person might have been paid and chasing down the proof it was paid. Good luck, these are not fun to deal with.

We use FT William for 5500 software. They are excellent on this type of thing, and I am hopefully anticipating that they will develop programming to appropriately populate the SAR based on the 5500 information/codes that we input. I'd hate to have to mess around with figuring it out for myself!

It sounds like the software is not picking up that this is SH only and deemed to pass TH. In some systems, you have to indicate it is deemed to pass TH to prevent it from going into the THM calc.

see the IRS's page on what happens when a plan has no contributions. https://www.irs.gov/retirement-plans/no-contributions-to-your-profit-sharing-401-k-plan-for-a-while-complete-discontinuance-of-contributions-and-what-you-need-to-know I think if a plan was set-up knowing there would never be contributions - there would be an argument that it was never a qualified plan to begin with, which would put the assets tax deferred status at risk.

1. what is the point of a 401(k) plan with no contributions? at some point it would be deemed terminated and pointless 2. The employees would likely need to be covered by the 401(k) - if they have enough service they would be in the testing and testing would fail if they aren't offered the plan 3. A solo k is a regular 401(k). Solo k is a marketing term and personally I find it irritating. So all the regular compliance applies even if marketed as a "solok) 4. What investments aren't available in a regular IRA? I'm guessing this person wants a loan, or to purchase company stock. Those are the only two I regularly see available in a 401(k) but not easily in an IRA. Neither of which are great ideas either. If the investments are available in a different IRA format, they should stick to that, and not start a 401(k).

I look at a calendar, and go out 183 days...