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For this to work, the OP would have to completely understand what they're saying and I doubt that would be the case. OP, you need to bite the bullet and hire an ERISA attorney or an experienced TPA to fix the error. This isn't a minor error. It's a big error that potentially involved a lot of tax deductions and you screwed it up by trying to DIY.

If the name of the partnership is "XYZ" and you established the plan under something else, such as your own name, and you have no business activity in your own name, then, as noted above, you don't have a qualified plan and should be able to un-do this. The trick will be to get Schwab to recognize this and not send the money to you as a taxable distribution. 99% of the problem will be figuring out how to deal with the Schwab bureaucracy. If you set up the plan in the name of the partnership, that might be trickier, as there is no basis to say the plan is not qualified (other than perhaps to argue that you had no authority to establish it, acting on your own). And finally, if you have business activity in your own name and set it up in your own name, I'm not sure you could say the plan is not qualified, and you might have an overcontribution problem, which is different, and not easily resolved. Let's hope that's not the case. Circling back, my take on it is that this is mostly a problem of getting Schwab to return the funds without reporting it. You'll have to spend some time on the phone (most of it on hold) and then some more time saying "no no no you don't understand" and wrangling and arguing until finally you get to someone who hasn't been trained for 30 days and who can actually help you. Good luck.

The owner should sign a form electing an in-plan conversion of $x and indicate which source is being converted if there are multiple. It's possible your document provider has model forms you can use, ours does. A 1099-R should be issues for the transaction. Ideally I'd like to have it transferred to another sub account at Schwab so it's clear, but you can "lump it one in account" if your on paper tracking is excellent and beyond IRS audit reproach.

sorry, I wish I were more helpful. My clients are all ideal and behave exceptionally well. Always communicate business changes well in advance, never dance around reasonable compenation issues and always do exactly what I tell them to do. Never inadvertently buy life insurance within the plan nor ever invest in limited partnesrships or collectible art. Aggrrhhhhh.

regarding #1 - nah, I think 3(c)(3) applies. regarding #2 - I am of opinion that retro amendment does not fly here, but I would need revisit the guidance regarding the look-backs and stability periods. There were bunch of interesting questions back in 2004/2005?? addressed by both the oficial guidnce and the Graybooks. In any case, November might work producing the result which will not interfere. Play the numbers game first before turning onto the legal creativity route. I would also model delaying the payout until 2025 while starting in-service distributions (beyond RMD amounts) to bring the assets below the formula-based benefit; thus the owner can waive upon termination. Hopefully, interest rates would come down next year but it is a speculative bet obviously.

How is the adviser, or her affiliates or friends, being compensated with respect to your new 401(k) plan? If it is based on assets under management, you would understand why she would want the IRA assets in the fold. Also, there are some providers that have a minimum threshold expectation of volume before accepting a small plan because they get compensated based on assets, such as 12(b)(1) fees. But you should have been told all of this in contemplating the arrangement.

This is totally fair. I tend to the DIY side myself and kind of feel sorry for these folks who get themselves in trouble (with Schwab and their ilk of course providing the rope with which to hang themselves) but your advice is sound.

Not! Those of us on the admin side have learned to take what advisors say with a grain of salt, or many grains. Often wrong but never in doubt. You can (should) terminate the SIMPLE but it's ok to leave it alone. Those accounts are essentially just IRA accounts with special funding rules. They are controlled by the employees and you can't force them to "merge" anyway.

This process is common among the very large recordkeepers. I agree with you that it appears to be an interest-free loan, and it certainly gives the big guys an advantage over small recordkeepers who do not have the financial resources to front payrolls. I have raised this point at conferences that have included IRS and DOL staff and at conferences with a room full of ERISA attorneys, and the reactions have been tepid at best. The DOL surprisingly were a little less troubled by this because of the overall speed of getting funds into participant accounts. This does not meet the criteria for being a mistake of fact that you will find in plan documents and regulations, so the recordkeeper is off base on that point. From what I have heard from recordkeepers is they treat the ACH failure/transaction reversal more like a failed trade.

Read the plan document and more specifically any basic plan document associated with an adoption agreement. Most documents have a section that addresses the situation when the plan upon adoption fails to be a qualified. If you have some difficulty finding the section, it often exists alongside "mistake of fact" language. The provision typically calls for a return of contributions. Having the document in hand may facilitate the process of closing down the plan.

The first questions are: (i) was the QDRO was submitted to the trial judge; (ii) was it signed by the trial judge; (iii) was a certified copy submitted to the Plan Administrator; (iv) was the QDRO approved by the Plan Administrator. You need to check the Courthouse file and with your attorney and with the Plan Administrator for the answer to these questions. The next question is what benefits are you talking about. You will normally have a share of your ex-husband's retirement benefits and that will normally not terminate on his remarriage or your remarriage unless that outcome is set forth in the QDRO or is a requirement of the underlying Plan documents. You should be able to contact the Plan Administrator and ask them if you will still receive your share of his retirement benefits and if any events could change that outcome. You may also be entitled to a survivor benefit (that you will receive after his death) if that is set forth in the QDRO, however in the case of survivor annuity you can lose your entitlement if: (i) you remarry; or (ii) you remarry prior to a certain age, usually 55; (iii) or if he remarries. It will all depend on the language of the QDRO and the underlying Plan document, and once again you should be able to find out the answers from the Plan Administrator. Many municipal plans for police, firefighters or correctional officers do not provide for survivor annuity benefits for former spouses, unless the employee retired during the marriage and elected such survivor annuity benefits and if such election survives the divorce pursuant to the plan documents. Once again, the Plan Administrator will be able to help you. You need to know that Plan Administrators owe a fiduciary duty to the employee/Participant and to the former spouse/Alternate Payee so they should answer any questions you may have. Note that employees of the City seem to contribute to 4 plans: Municipal Employees' Annuity & Benefit Fund of Chicago (MEABF) Laborers' & Retirement Board Employees' Annuity & Benefit Fund (LABF) Policemen’s Annuity & Benefit Fund Firemen's Annuity & Benefit Fund so you need to know exactly what plan is involved and that should be set forth in the Court Order. See this page - https://www.chicago.gov/city/en/depts/fin/supp_info/pension_funds.html Note that the Court Order is not a "QDRO" but a Qualified Illinois Domestic Relations Order (QILDRO). See the attached pamphlet that describes more the 4 plans. Also find attached a QILDRO Booklet and a Model QILDRO Order. Also a Fact Sheet that describes more than the four plans mentioned above. I hope this is helpful. DSG 11-20-23 QILDRO_BOOKLET_20211019 (1).pdf QILDRO_FORMS_2012_04.pdf QIDDRO - Chicago.pdf

A. It's after the termination date so no new contributions should be allowed. B. As Bri notes, the only "personal contribution" (huh?) in this scenario would be an after-tax contribution, which apparently is not permitted and often problematic. C. I doubt the participant asking has a clue about it and are likely asking about a tax-deductible contribution of some sort. This should be squashed. Caveat: A self-employed person (sole prop or partner) can make contributions from his or her own funds. If it is the/an owner asking, then it might warrant more thought, although the term date has passed.

I couldn't agree more!!

You have to know what the plan says and what the QDRO says. As a general principle, a remarriage by either the participant or the participant’s former spouse after the plan approves and recognizes the QDRO will not cause an alternate payee to lose the awarded interest. For example, most plans will not qualify an order that provides for lapse of interest upon remarriage. However, especially with government plans, what happens in any particular case depends on plan terms and the terms of the QDRO. And many things can affect the actual amount received under the interest awarded under the QDRO. See the most recent message before yours in this category.

If you read 45E (as amended by SECURE 2.0) carefully, the "paid or incurred" language only appears in paragraph (a), with respect to the credit for qualified startup costs. If I'm understanding the question correctly, you are asking specifically about the credit under paragraph (f) for employer contributions. Reading paragraph (f) for similar language, it appears to be missing a word! Removing the parentheticals, it says "the credit allowed for the taxable year under subsection (a) shall be increased by an amount equal to the applicable percentage of employer contributions by the employer to an eligible employer plan." Contributions WHAT by the employer to an eligible plan? Sloppy drafting aside, given what paragraph (e)(2)(B) has to say about a disallowance of a deduction for amounts for which the employer receives a credit under paragraph (f), it seems to me that the intention is that the credit is available for a year in which the employer would otherwise have been able to take a deduction for the contributions, in other words, the prior year as long as the timing of the contribution satisfies 404(a)(6).

From in-person interaction with IRS and DOL reps, I have the impression there is a lot of concern about a classification that looks like, smells like or acts like a service based classification. From experience with large medical services employers and with large staffing services employers, they seem to be resigned to considering per diem/ad hoc/on call employees as LTPT employees if the 500 hours/consecutive years requirements are met. They do intend to exclude LTPT employees from match and nonelective employer contributions, and from all coverage and nondiscrimination tests. Several companies do not track in their HR/payroll systems hire dates and termination dates for these workers. Rather, the systems track an original hire date and a last day worked. This is a PITA for their retirement plans where regulations rely on service definitions based on periods of active employment or hours worked. These companies are implementing in the employment agreements and in company policies definitely determinable definitions of a termination date to help fix the time periods. For example, if an employee does not provide services for a period of 6 months, that employee is considered terminated as of the end of the 6 month period. We have been promised guidance by the end of this year, so it should not be too much longer before we get the big reveal. Sentiment seems to be leaning towards we will be underwhelmed.