Leaderboard

Sorry it took me so long to respond. There is no guidance as to your question. But it appears to me from the language of the law that a rollover of the SIMPLE money to the 401(k) means that the rollover account is subject to 401(k) distribution limits forever. The actual statutory language of 72(t)(6)(B) says: B) Waiver in case of plan conversion to 401(k) or 403(b) In the case of an employee of an employer which terminates the qualified salary reduction arrangement of the employer under section 408(p) and establishes a qualified cash or deferred arrangement described in section 401(k) or purchases annuity contracts described in section 403(b), subparagraph (A) shall not apply to any amount which is paid in a rollover contribution described in section 408(d)(3) into a qualified trust under section 401(k) (but only if such contribution is subsequently subject to the rules of section 401(k)(2)(B)) or an annuity contract described in section 403(b) (but only if such contribution is subsequently subject to the rules of section 403(b)(12)) for the benefit of the employee. Section 401(k)(2)(B) is, of course, where the 401(k) distribution limits live. This language is also repeated in Notice 2024-02. So, the statute says that the contribution must be subjec tto 401(k)(2)(B) - it doesn't say just for the 2-year period. If the participant wants to retain the right to take distribution, he/she should keep the money in an IRA.

Can't restate a plan retroactively. You can only adopt a new plan retroactively. So, you're using the other document for 2024.

Well, if you are willing to have the policy owned by the Plan, the PLAN may purchase the policy from the participant, (you) under PTE 92-5. The plan will then own the policy and pay the premiums, within incidental limits, etc., etc. The Plan will be the owner and beneficiary of the policy, and the death benefits will be paid to the plan participant's (you) named beneficiary(ies) under the plan. I'm not commenting on the advisability (good or bad) of doing this, (well, I guess I am - my bias is that this is generally a bad idea, but that's an issue for you and your tax counsel). I haven't had anything to do with life insurance in a plan (thankfully) for so many years that my thoughts may be out of date.

My eyes were drawn to the idea that all 58 participants have an earmarked percentage of any specific investment in the pool.

I've done a coverage determination for a small pharmacy - they asked for an approximate revenue breakdown between health and non-health (lottery tickets, etc) revenue. About 95% was health-based, and the PBGC said they were exempt.

Yuck. How I pity you!