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We roll all forceouts. From $7,000 down to any amount that is in excess of distribution fees. I havent had it happen, but in theory that could be $1 after fees.

I don't think one year is a hard fast rule. More like facts and circumstances but if you are inside the 1 year window the IRS is fine with it. But if you are concerned, it couldn't hurt to have a new resolution re-terminating the plan or affirming the plan termination. You might also want to check if the delay requires them to adopt any additional conforming amendments. As long as your "freeze" amendment isn't rescinded because you are deeming the termination no longer in effect it shouldn't have any material impact that I can think of but you may now need a Valuation and Schedule SB for 2024 that you weren't planning on which if the plan is underfunded could give rise to a required contribution.

Just curious, if an employer pays the participant's extra tax (because the employer believes it, in its plan-administrator role, is responsible for the minimum-distribution failure), is the payment a deductible business expense?

So I'm curious, is it not treated as a failure if you self correct but the excise tax is due? And if you go through VCP it is clearly not treated as failure and the excise tax is likely waived in full in most cases. The reason I ask is because the decision to do a VCP submission could hinge on the size of the excise tax. If the excise tax is smaller than the cost of a VCP submission, the sponsor might just want self Correct and pay the participant's excise tax rather than go through a VCP filing.

@Lou S. As you likely expected, the answer to whether SCP is available to correct RMDs is "it depends". For starters, https://www.irs.gov/retirement-plans/correcting-required-minimum-distribution-failures notes that a correction using SCP will require payment of the participant-owed excise tax. The IRM 7.2.2 https://www.irs.gov/irm/part7/irm_07-002-002 says: Special Tax Relief Requests Generally, excise taxes and income tax consequences associated with failures can’t be resolved through EPCRS. However, plan sponsors may ask the IRS in writing not to pursue certain specific income and excise taxes imposed by IRC 72(t), IRC 4972, IRC 4973, IRC 4974, and IRC 4979 for certain operational failures. Most special tax relief is granted through VCP. It’s not available through SCP or Audit CAP. Special tax relief is not granted automatically; VC approves it in appropriate cases and only if certain conditions are met. See the table below for the tax relief in Rev. Proc. 2021-30, Section 6.09, and the requirements/conditions to evaluate these requests. Tax Requirement/Conditions Evaluating Criteria IRC 4974 - excise tax imposed on late required minimum distributions of IRC 401(a)(9). If some affected participants are owner employees (including a 10% owner of a corporation), applicant must submit a written explanation supporting the request. Plan must distribute accumulated RMD amounts (adjusted for earnings) to the affected participants and beneficiaries. If the affected participants are only NHCE participants, automatically approve the request unless there are some unusual facts or circumstances. For owner employees, approve the request if the failure was inadvertent and doesn’t appear egregious. Consult your manager if unsure whether to grant relief or if the request involves some unusual circumstances. If the plan wants to try to get the participant off the hook for the excise taxes, the plan will have to file a VCP. The rules seem pretty forgiving.

So it's something that simple: if you can't elect to defer Roth, then you can't do this. Which implies that that same goes for PS-only participant-directed plans... but we don't need to sully a DB forum with DC stuff. LOL Thanks!

While members on this board are generous with their time and expertise, it really is primarily a board for professional discourse. What you are asking for is what we charge for. I would reiterate that you need some professional assistance. Good luck.

This is a little difficult to answer without specific dates of hire, DOB, and plan provisions as to eligibility computation periods - stay with anniversary years from DOH, or flip back to plan year for second eligibility computation period? Also, if the person never worked 1,000 hours in a year, how the heck are they not considered part time? But in general, at a guess that there was 500-999 hours in each of 2021, 2022, and 2023, and that employee was at least 21 in or before 2023, then the employee should have already become eligible as a LTPT as of 1/1/2024. Also, all that is REQUIRED for a LTPT is eligibility for DEFERRALS. There are a lot of intricate details to the LTPT rules (far too many!) - you should get yourself a good TPA to assist you with your plan administration. Good luck.

just not a thing. The backdoor approach is via doing in-service distributions to their 401(k) and doing Roth conversions there. Devil is in details.

In a DC plan, the plan may self-correct by making the distribution, adjusted for earnings. As far as the excise tax, remember that the tax on unpaid RMDs is not a tax on the plan, it's a tax on the individual. I haven't thought through this scenario thoroughly, but from looking at the instructions to Form 5329, it seems that if you correct the missed RMD within the correction period, but after paying the 25% excise tax, you would need to file a 1040-X with an amended 5329 to request a refund of the extra 15%. But also see the instructions to Form 5329 about Reasonable Cause. As I understand, requests to waive the missed RMD penalty for reasonable cause are nearly always granted.

The IRS issued a "Notice of proposed rulemaking and notice of public hearing". The effective date of the guidance will be as of the first plan year at least 6 months after publication of the final rule. Given the process for accepting comments, holding hearings and finalizing guidance, the rules likely will not be effective for calendar year plans until 2027. In the meantime, plans are expected to comply with "a reasonable, good faith interpretation" of the new rules. That being said, there should be no need to go through the election process all over again. It sounds as if the plan received affirmative elections from employees. If an employee did not make an affirmative election, then the AE default elections should have been applied. This is somewhat of a simplification of what is in the new guidance, but it should suffice as having made a reasonable, good faith interpretation. Here is a link that will provide more detail about the contents of the guidance, and can help you track the potential issues as the guidance moves through the process of being finalized. https://ferenczylaw.com/flashpoint-and-not-a-moment-too-soon-in-fact-a-little-late-mandatory-automatic-enrollment-guidance/ There's a lot to absorb, so keep informed as this all unfolds.

I agree with the "2025" answer above, since all actions (writing/sending check; receiving/depositing check) clearly occurred in 2025. The (2024) termination date is not relevant for determining the taxable year. What about when the Plan completes its processing in late December, sending the check in the last 2-3 days of December, when: 1. Plan knows the participant received (and deposited) the check on or after January 2 ? 2. Plan does NOT know the date the Participant received the check ? Is there a "presumptive" date of receipt? I looked in the 1099 instructions and found no discussion regarding this. In my opinion, the distribution should be taxable to participant in the year he RECEIVED the check, but how is the Plan able to determine this in the 2nd situation above? .... Jeff