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Verily, and with great haste, thou shalt consulteth thy plan's governing documents and discover therein the answers thou seekest. Should fortune smile upon thee, thou may findest that thy plan be graced with a determination letter, be it sealed by the hand of the wise ones who dwell within the halls of the Internal Revenue Service, granting reliance upon the terms found therein. In that happy moment, thou shalt knowest that thy plan's allowances of in-service distribution of rollover accounts shall never be said to fail to satisfy the requirements of section 401.

You need to check your plan's legal document for hardship provisions (safe harbor vs facts & circumstances). That may not qualify and your plan may not even allow hardship withdrawals. If your plan allows for in-service withdrawals at 59 1/2, and you are that age or over, the 10% penalty won't come into play. You can specity the tax amount you want taken but that won't guarantee you won't owe in April. I'm not qualified to give tax advice. Hope that helps.

IRS link for description of traditional IRA, https://www.irs.gov/retirement-plans/traditional-iras

About the April 25, 2024 rule to interpret the circumstances in which a person is a fiduciary by providing investment advice, even if none of the pending civil actions seeking to vacate the rule gets such a result: A defendant may argue an interpretation narrower than Labor’s most recent interpretation. A plaintiff may argue an interpretation wider than Labor’s most recent interpretation. A court interpreting ERISA § 3(21)(A)(ii) may consider any interpretation aid, which might include the Labor department’s 1975, 2016, 2020, and 2024 rulemakings (without deference for or against any of them).

Here's the wording on our document, FWIW... The following are optional administrative provisions. The Administrator may implement procedures that override any elections in this Section without a formal Plan amendment. In addition, modifications to these procedures will not affect an Employer's reliance on the Plan.

Brilliant!! Brightens up an otherwise garbage Monday morning. Gracias!

The United States’ courts (often, called Federal courts, to distinguish them from a State’s courts) are a three-layered system, with a trial court—the District Court; an intermediate appeals court—the Court of Appeals; and a court of last resort—the Supreme Court of the United States. District Court Of Article III courts, the United States district courts are the general Federal trial courts. Each of the 50 States gets at least one Federal judicial district. Based on populations and geography, some States get a few districts. For example, Pennsylvania has three districts, and New York has four districts. For a map of the numbered Federal circuits (the next layer) and each’s districts (each of which relates to the whole or a part of a U.S. State or territory), see: https://www.uscourts.gov/sites/default/files/u.s._federal_courts_circuit_map_1.pdf. In thinking about where a case might be litigated, consider that some plans provide an exclusive forum (for example, the Federal court for the district and division that sits in the plan sponsor’s preferred city). A district court’s opinion is not a precedent anywhere, not even in the same district. A district court’s opinion is persuasive authority. Within a district Court of Appeals The United States courts of appeals are the intermediate Federal appellate courts. They must hear all appeals of right from the district courts. The courts of appeals are divided into 13 circuits: the First through Eleventh circuits, the District of Columbia Circuit, and the Federal Circuit. The District of Columbia Circuit has only one district. The Court of Appeals for the Federal Circuit has nationwide jurisdiction of specified claims under Federal law. A court of appeals decision is precedent for all district courts of the circuit’s territory, and for appeals court panels in the circuit. (For the Eleventh Circuit, decisions of the Fifth Circuit before its 1981 split into the Fifth and Eleventh Circuits are precedent.) Everywhere else, a court of appeals decision is only persuasive authority. Supreme Court of the United States The Supreme Court of the United States is the court of last resort. It reviews decisions from the Federal courts of appeals, and from a State’s highest courts. With only a few exceptions for cases with original jurisdiction in the Supreme Court, the Court decides whether to review an inferior court’s decision. (That the Supreme Court chooses not to review a decision does not mean the Supreme Court affirms the decision.) The Supreme Court’s decision is precedent and binding authority for all Federal courts, and for all States’ courts. Circuit splits That separate courts might interpret a national statute differently than other courts have interpreted the same statute has existed for about as long as the US has had interstate commerce. Differing interpretations happen readily when there is no executive agency interpretation on the question of law involved. And even when there is an agency rule, differing interpretations continued during Chevron’s 40 years. Among other possibilities, courts sometimes differed about whether a statute is ambiguous, and differed about whether the agency’s interpretation is permissible. (Eliminating, one hopes, or lessening a plan administrator’s vulnerability to more than one interpretation of a statute’s command or about a plan provision’s meaning is among the reasons some plan sponsors like an exclusive-forum provision. We recognize that, even if this gets uniformity for a plan’s sponsor and administrator, it might not get national uniformity for a service provider.) Some of the Supreme Court’s ERISA cases resolved what lawyers call a circuit split. In trying to persuade the Supreme Court to grant review, many petitions argue that there is a circuit split and that the law needs national uniformity. But some circuit splits are not resolved. For example, on whether ERISA provides contribution and indemnity among fiduciaries, some circuits say yes, some circuits say no, and others have no precedent. That ambiguity has persisted for ERISA’s half-century. Litigation is rare. About all of this, consider that many questions of law recordkeepers and third-party administrators work on are seldom litigated, and many are never litigated. Further, questions of law about what a tax-qualification condition requires are almost never litigated in Article III courts.

Once money is rolled into the plan, it’s rollover money and it doesn’t matter what it was in the other plan. Our plans (almost) always allow participants to take a distribution of rollover money at any time. Read the document and it will tell you.

I think some of the concepts got jumbled in the example. You start here with $100k in forfeitures. That's your gains. Then you reduce those forfeitures by the $95k losses caused by overspent accounts from mid-year terminations. That's your losses. Sometimes you'll have net experience gains (if forfeitures exceed overspent accounts) and sometimes you'll have net experience losses (if overspent accounts exceed forfeitures). So in this example you have $5k in net experience gains ($100k forfeitures - $95k overspent). You have three choices for how to apply that $5k in gains: To reduce required salary reduction amounts for the immediately following plan year, on a reasonable and uniform basis; Returned to employees on a reasonable and uniform basis; or To defray expenses to administer the health FSA. In this case, you have at least $5k of administrative expenses associated with the health FSA TPA. So you use the $5k experience gains on the administrative expenses. That's the end of the story. Here's a post with more discussion: https://www.newfront.com/blog/fsa-experience-gains-from-forfeitures Here's a quick slide summary: 2024 Newfront Section 125 Cafeteria Plans Guide

That sounds appropriate, but really comes down to the Plan Administrator interpreting the document and its standard operating procedures conforming to Its interpretation. So if the bonus were a separate paycheck, he'd have gotten $200 total that week, I suppose.

No, matching contributions do not count towards (or "trigger") gateway minimums.

You need to have it fixed now and not wait for some distribution later.

of course they could roll the proceeds to an IRA, avoid the 20% withholding, and then turn around and raid the IRA without mandatory withholding.

WDIK has the correct code cite. In addition, the instructions to Form W-4R state (emphasis added): Of course, this assumes that the distribution in question is an eligible rollover distribution. Is it? If this is a 401(k) hardship distribution, for example, that would not be an eligible rollover distribution and the 10% (not 20%) automatic withholding could be waived.

26 U.S. Code § 3405 - Special rules for pensions, annuities, and certain other deferred income (c)Eligible rollover distributions (1)In general In the case of any designated distribution which is an eligible rollover distribution— (A)subsections (a) and (b) shall not apply, and (B)the payor of such distribution shall withhold from such distribution an amount equal to 20 percent of such distribution. (2)Exception Paragraph (1)(B) shall not apply to any distribution if the distributee elects under section 401(a)(31)(A) to have such distribution paid directly to an eligible retirement plan. (3)Eligible rollover distribution For purposes of this subsection, the term “eligible rollover distribution” has the meaning given such term by section 402(f)(2)(A).

It never hurts to be reminded that just because you can do some thing does not mean it is the best thing to do. Are you receiving advice about the wisdom of using your 401(k) money for the purpose you intend?

And amendment can't be effective for the year if it has a prohibited cutback of benefits. Adding after-tax is an expansion of benefits so should be fine. Though it will be subject to ACP testing, just so you are aware in case you were not. The second part is a bit trickier if you can do it or not. If anyone is entitled to an allocation under the old formula you won't be able to change the formula until next year. However, if no one has yet earned the right to the allocation formula then you could amend this year. generally speaking if your current plans has a last day requirement or an hours requirement that no one has yet met you could do the amendment effective in the current year, provided it's adopted before anyone has accrued a right to the old formula. Safe harbor 401(k) plans have a few additional levels of hoops to satisfy where you might not be able to make the change even with a last day requirement, you'd have to double check on that one if that's you situation.

Check the document and follow it, the plan sponsor making up its own rules based on what it wants to do does not fly. if there is no BIS then the document should say the person re-enters immediately and treated as if (s)he never left, which renders the initial "retirement" moot in my opinion.

26 C.F.R. § 1.411(d)-4/Q&A-2(e)(3) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR686e4ad80b3ad70/section-1.411(d)-4 Under Reorganization Plan No. 4 of 1978, the Treasury department’s rule also is both agencies’ interpretation for part 2 of subtitle B of title I of ERISA.

My understanding is if there is another taxable distribution where the participant is receiving funds then you withhold on the total including the loan offset. If there is no cash distribution, like the participant is rolling over the rest to an IRA, then you don't withhold. This understanding is for Federal Tax withholding but I believe most states that have withholding on qualified plan withdrawals mirror the Federal rules though I don't know about MI specifically.

Yes 401(k) that offer annuities have always been subject to those rules. At one time you could not amend it out as the IRS viewed it as a 411 cutback, but now you can as some law changed it if you meet certain notice and timing requirements. I think the change was in the late 90s or early 00s but I forget which piece of legislation allowed you to remove the QJSA/QPSA from non-pension plans.