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Many of you know that BenefitsLink is headquartered in the mountains of North Carolina. Thankfully, we're safe and sound, albeit without cell service and primary internet (thank goodness for StarLink!). Many around us are not. We know that Florida and Georgia experienced significant damage. The mountains of North Carolina and Tennessee took a devastating hit. Over 2' of rain fell in a large swath of the NC mountains; the runoff put rivers at historic flood levels. Power, cell and internet service are all down over a large area, roads are collapsed or otherwise impassable, and many homes and small towns are completely isolated -- or washed away. Two of the four interstate routes in/out of Asheville -- the two that cross the mountains to the west -- have washed out; a third route (to the east) is blocked in several places. The damage is almost unbelievable -- and the affected area is almost the size of Massachusetts. This area is not equipped or prepared for this level of catastrophic destruction. Mountain people are self-reliant survivors, both individually and collectively, but this will be quite a stretch. It will be a long, difficult road forward. Please keep all in this area in your thoughts and prayers. And if any of our BenefitsLink neighbors have been affected, please reach out on this thread - we'll do what we can to help. Lois and Dave

The end of December marked the end (at least for now) of my 41+ years in this business, starting as a part time DC system programmer (before I knew what a "forfeiture" was) and ending as an Enrolled Actuary with all the ASPPA exams completed as well. I have also been a Benefitslink Board participant for more than 23 years. Here, as well as through the exams, is where I learned my stuff. I am grateful for the learning, teaching and helping opportunities (and more than a little fun) created by Dave and Lois Baker through this awesome system. Their efforts aren't appreciated enough. Thanks also to the countless Board participants that have educated and helped me over the years; and I hope I've been able able to help others as well. I still plan to linger now and then but goodbye and Happy New Year for now! Thanks again Dave and Lois.

This is to share with you the happy news that today is the 25th anniversary of the first day on which the BenefitsLink Newsletter began daily publication. I didn't see this coming when I decided to go daily in 1999, at age 41. (The newletters had begun four years earlier, but they weren't being published every day.) The free information must be helping employee benefits practitioners to help their clients, which translates to the ability of employers to effectively run and fund programs that improve the lives of so many millions of working people (and retirees, and beneficiaries), even if most of them wouldn't know (or want to know) the difference between an ERISA and an eraser. What a noble endeavor, to be an employee benefits practitioner! Some lawyers and TPAs and other benefits practitioners have found work through our job board that's been running since 1996, which means they've gone to new workplaces and sometimes new cities, which means some of them have met people they wouldn't have met otherwise, which means some of them have fallen in love and then had children... which means there are people walking around on the planet now who wouldn't be here but for this "web site" thingie that started in 1995, and then the idea of sending "newsletters" by "email." None of that would have been possible without readers. The existence of "BenefitsLink babies" didn't occur to me until one day about 10 years ago, but I kept it quiet -- at that time, they were still teenagers! True to form, I and my business partner and wife Lois Baker (formerly an employee benefits lawyer, whom I met on CompuServe in 1990 while trading ERISA questions using dial-up modems) have failed to do any marketing of this happy day. But as I sat here at the keyboard today I had the idea that we would get so much joy by celebrating the occasion with readers. I hope this hasn't come across as a commercial but instead is the lifting of an E-flute of cyber-champagne -- here's to employee benefits practitioners everywhere! It's a wonderful community, and for 25 years now and still counting, we are so happy to be a part of it.

I don't know about you all but I find these discussions much more interesting and enriching compared to the "what compensation do I use to calculate the safe harbor contribution?" questions that make me feel like we're doing someone else's job of basic training their staff.

I don't have a spreadsheet that I can share, but if I did, it would have these column headings: Attorney name Phone number Email address What I am saying is, there is not a deterministic formula for saying if an ASG exists or not. You need to make a number of factual determinations, including: Is a particular organization a service organization? What entity is the first service organization? Does one organization regularly perform services for another? Is a significant portion of the entity's income derived from providing services? Are the services performed by one entity of a type historically performed by another? There are no spreadsheet functions to answer these questions.

I wonder if divying up the horse when time comes for a distribution is where the term "quarter horse" comes from.

Michael B. Preston, who was an enrolled actuary, was a giant in the pension field. He contributed so much to the employee benefits community. He posted 6,569 messages onto these message boards since he joined in 2001 (!) -- questions, answers and comments that helped to inform and educate hundreds, perhaps thousands, of his peers. They're all still here and on the search engines, so his wisdom and humor will continue long into the future. During the 1990s, Mike was a system operator of the PIX ("Pension Information eXchange") BBS (i.e., a "bulletin board system"). PIX basically was a server running proprietary software on a particular dedicated personal computer that had a dedicated telephone number. Members would use their PC (and a modem) to connect via a long distance phone call, so that the latest discussions could be downloaded for reading and for adding comments. Later, when the World Wide Web became popular and PIX closed, Mike become an active participant and later a "moderator" on these BenefitsLink message boards. An outstanding servant and leader in his profession, Mike was awarded the Edward E. Burrows Distinguished Service Award in 2017 by the ASPPA College of Pension Actuaries, which is "presented annually to a pension actuary who has gone above and beyond in forwarding ethics, education, beneficial legislation or regulations that enhance the private pension system or the professionalism of enrolled actuaries within the private pension system." We will miss him so much!

We don't know yet. IRS has not issued any instructions on this. My advice to anyone who wants to do this, is to do an in-plan Roth conversion instead. You will get the same tax result through a well-understood process.

We are no longer a service provider to the plan and unable to assist you with the information you are requesting as we have no access to that data and no contractual agreement with that Plan or Sponsor. Please contact the ERISA Plan Administrator and/or Plan Trustee. Our last records which we have previously provided to you indicate they are X and Y. The last known address and phone in our records is _______ and _________. We wish you luck in enforcing the right of the participants with the legally responsible parties but are unable to offer any further assistance. Just repeat that ever time they call.

Mistake or not, the participant's actual election was executed, so I say have them fix it going forward and deal with it. Why is it always the collective "we" - plan sponsors, advisors, TPAs, RKs - that are asked to bend over backwards to accommodate a participant's mistake, poor judgment, or lack of attention? When is the participant held accountable for not doing what (s)he is supposed to and then months or years later comes looking for help on situation (s)he could have rectified almost immediately had (s)he paid the slightest attention? I'm sorry, but if I intended to make a PRE-TAX deferral from my pay and my income tax withholdings remained the same, I would have noticed and said something - if not after the first pay period, certainly within a few. Sorry for the rant, and I don't do this administration so I don't deal with these situations - but you all do - and don't you have enough work and have enough plan sponsor and advisor administrative "issues" to fix already? OK, I'm done. Also, it's 9/11, so let's remember those we lost that terrible day and from its aftermath.

Both the AA and the BPD comprise a plan sponsor's plan document. Therefore, to the extent a provision is delineated in the BPD without any corresponding AA selection, the BPD governs and should be followed. Not everything can/will/need to be outlined/selected in the AA and anything that is not expressly provided in the AA via a permissible selection is subject to any BPD mandates.

I am not an attorney, just a lowly TPA, but when I started reviewing the ACT, I thought I would create a spreadsheet that I could sort by the code section, effective date, etc. This was just my first run through and obviously needs to be updated, but please feel free to take it and make it your own. Secure 2.0 Provisions.xlsx

Here’s a rhetorical question about the two business owners and the certified public accountant: If several third-party administrators told the CPA the desired design is okay, why have the business owners not implemented the design with one of those TPAs?

Catchup 'happens'. One does NOT sign up for catchups. In your case khn, if someone who signed up for catchup terminates before deferring $18,000 in total, what do you do with the supposed catchup? unless you have a limit, if that person deferred $9,000 and elected an additional $3,000 for catch up, then the testing is for $12,000 and no catchup. After all these years I find it surprising that payrolls are still separating catchup because that is a testing issue, not a payroll issue.

I look at this one step at a time. When uncle dies, plan assets go either per a beneficiary designation *or* if none, per the terms of the plan. I would guess that the spouse (aunt) is the bene under the terms of the plan - so those assets go to her - whether she exercise control over them or not. Uncles will is irrelevant. Only a valid beneficiary designation or the terms of the plan govern. So, when aunt died, assets go per her bene designation (if any) or per the terms of the plan - and uncle, uncle's estate, and uncles trust have no bearing on aunt's distribution of her interest in the plan. Aunt's representative (estate) or others would be entitled to those benefits - absent some fact not disclosed. The court has NO JURISDICTION over the plan assets until paid, and cannot direct those assets to be paid to the trust, and whether it is a pass-through is really irrelevant..

I agree that it could be done, but I would recommend against it. A better approach is to exclude all HCEs from the safe harbor, and rely on the plan's individual-groups allocation formula for nonelective employer contributions to make an allocation to some or all HCEs, if desired. This is a little bit more complicated (but only a little bit) and it gives the employer much greater flexibility.

My experience of almost 40 years is that the check date is most often used. Otherwise, the administrative work is a mess.

This likely falls under what my partner calls the "Spandex Rule" - just because you can doesn't mean you should. A cash balance plan is no place for real estate, IMO, because of the volatility. On the one hand, you could lose a lot of money and have a huge underfunding problem. On the other hand, you could make a lot of money (which is what the owner usually hopes for) and end up with an excess asset problem. How happy would the owner be if he found out that his great real estate gain was going to be excise taxed 50% plus his normal rate of income tax. Put conservative investments in the cash balance plan and use another vehicle for the volatile investments. Ilene

Because the law says it does. There is a specific rule - IRC 402A(c)(4)(E) - that says amounts transferred from a pre-tax account to a Roth account will be "treated as a distribution" which is why you can do this. There is no rule that says you can net your RMD against your planned contributions for the year and avoid taking a distribution if you contribute less. "Seems to" is not the same thing as "is." The main thing you're missing is that qualified plans have to have their assets in a trust, under the control of a trustee. Under your method, the trust never has control of the amount, so it can't be considered to be plan assets, so it can't be used to satisfy the RMD requirements. Your chart also seems to be saying that the $10,000 will simply remain in the business account. The RMD doesn't get paid to the business, it gets paid to the participant. The business would have to pay it out to the participant in that case, and there might be questions why a payment directly from the business to an employee isn't being treated as wages. If the goal is just to avoid making a payment out of the main plan account, what you might be able to do is to open a checking account in the name of the plan. Then deposit the $15,000 to that account, transfer $5,000 of it to the main plan account, and pay out the remaining $10,000 to the owner. That seems unnecessarily complicated to me, but maybe it will accomplish your aims.

HCE determination (and lots of other things) is made under section 318 and is different than attribution for controlled groups (section 1563). Under 318, a parent is deemed to own a child's stock no matter the age of the child or the percentage ownership in the business. I love this summary from Lincoln. https://www.lfg.com/wcs-static/pdf/Attribution of Ownership in Retirement Plans - PDF.pdf

A big thank you to Lois and the entire IT team (is that just Lois?) for cleaning up the site after the major spam attack over the weekend. Every board was littered with messages. These boards are very useful to many people and it doesn't happen without great support. Thank you to the entire clean up crew.

It sounds like the K-1 is issued to the partner's corporation, NOT the partner. The K-1 is not plan comp. This is not an uncommon setup, but its also often misunderstood. Based on the scenario you lay out, his comp for plan purposes is his W-2 from the corporation, not the K-1 from the partnership to the corporation. If the income passes from one entity to another (not taxed as income from self-employment), why would it count as plan comp?

This is a pet peeve of mine, you can't "fail" the top heavy determination (aka top heavy test). You are just top heavy or not top heavy. In this case you're top heavy. Not a failure. The actual rule is that in a top heavy DC plan, each participant who is a non-key employee must receive an employer allocation equal to at least 3% of their compensation, or a percentage equal to the highest percentage allocated to any key employee if it is less than 3%. This allocation may impose a last day rule, meaning employees who are terminated before the end of the plan year do not need to receive the top heavy minimum. The rule was modified by SECURE 2.0 so that employees with less than 1 year of service or who have not attained age 21 do not need to receive the top heavy minimum contribution. This is effective starting for 2024 plan years. Since your plan is profit sharing only with a pro rata allocation, you shouldn't normally have any issues with the top heavy minimum, as each non-key employee would receive the same percentage of employer contributions as each key employee. However a couple of things to watch out for: If the plan excludes any compensation for allocation purposes (for example, pre-entry compensation), that definition of compensation may not be used for the top heavy minimum allocation, even if it is a 414(s) safe harbor definition. The plan must use full year (415) compensation. If the profit sharing allocation has a service condition, for example, the employee must complete 1000 hours of service in the current year to be eligible for a contribution, then an additional top heavy minimum might be needed for participants who were active on the last day but did not complete the 1000 hours. Employees who are not participants (have not met the plan's eligibility requirements) do not need to receive a contribution.

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.

Amen!

Just to add my voice to this, we have strongly recommended to our clients that they do not do anything in relation to this until guidance comes.

Recognizing RatherBeGolfing’s observation that the truth might not be one-sided: If you help uncover the past, get the plan sponsor/administrator’s attorney to engage you to assist her. That way, what you communicate to the attorney can be shielded under evidence-law privileges for lawyer-client communications and attorney work product.

It's not truly disaggregation, where you would treat it as two separate plans as you might be used to with 410(b) and 401(a)(4). Rather, what the new law says is that employees who have not met age 21/1 year of service can be disregarded when determining if a DC plan has satisfied the top heavy minimum. So it doesn't matter if there are any otherwise excludable key employees, you just ignore all of the under 21/under 1 year employees when determining who is entitled to a top heavy minimum. Where it gets weird is with the safe harbor match. The IRS ruled (in rev. rul. 2004-13) that a plan which different eligibility for deferrals and safe harbor does not consist "solely" of deferrals and match meeting the safe harbor requirements, which is the rule to be treated as not top heavy under IRC 416(g)(4)(H). That clause wasn't affected by the new law. So presumably a plan with different eligibility for deferrals and match is still treated as top heavy, and subject to the top heavy minimum. The fact that they don't have to give the top heavy minimum to otherwise excludable employees doesn't change this, it just means that employees who are not otherwise excludable (over 21/1 year of service) will have to get the top heavy minimum. The top heavy minimum for these people could be satisfied by their safe harbor match contribution, or if they don't get any safe harbor (or enough safe harbor, because they didn't defer enough or not at all), then by an additional employer contribution.

Are you sure that's what the plan says? Read the exact wording in your plan document. I bet it actually says something to the effect that non-resident aliens with no U.S.-source income are excluded. If someone worked in the U.S. then they would not fall under that excludable employee classification, even if they are not a citizen and not a permanent resident.

Yes, it is that time of year again – the annual tax lament, to the tune of “Yesterday” by the Beatles. Remember, it is only when the final line is truly sung from the heart that one can appreciate the scope of anguish and angst that the artist is attempting to convey… Yesterday... Income tax was due, I had to pay... All the funds I tried to hide away... I don't believe, I'll eat 'till May. Suddenly... I'm not sure that I am fiscally... Ready for responsibility... Oh yesterday, came suddenly. Why, I Owed so much, I don't know, I couldn't say May be Forms were wrong, how I long, for yesterday. Yesterday... Seemed like prison time was on its way... Now I need a place to hide away... While keeping IRS at bay. Why, I Owed so much, I don't know, I couldn't say May be Forms were wrong, how I long, for yesterday. Yesterday... Taxes due, I filed come what may... Losing all deductions that's my way... Of giving IRS my pay. mm - mm - mm - mm - mm - mm - mm.

I would consider it a mistake (which violates exclusive benefit rule) and have the plan return the rollover to it's source. It shouldn't count for any purposes under the plan and should be corrected as soon as possible, in my opinion.

I agree - all those provisions that sound great for enhancing overall retirement plan coverage just make things more complicated and error-prone for the small and unsophisticated (from an HR perspective) employer that they serve as a detriment. Fewer employers will want to adopt these plans, fewer providers will want or be able to serve these plans, and administrative costs will increase, wiping out the short term tax credit savings. I've been in this business for nearly 40 years, have done both DC and DB in terms of administration, plan documents and compliance, and remember when DBPs were the complex animals no one wanted any more. Now, DBPs and CBPs look pretty simple compared to the modern and continually evolving 401(k) plan environment. Maybe all the heads of the states' with those new mandatory retirement plans met in a NYC pizza parlor and conspired with the Federal government to make 401(k) plans so damn complicated that no small employer would dare set one up and thereby drive all their employees into the mandatory state plans, just saying.

The participants have the right if it's in the document. The document either needs to be amended to remove the option or the employer needs to find new service providers.

"Portal." You mean portal. I hope.

Yes, it is that time of year again – the annual tax lament, to the tune of “Yesterday” by the Beatles. Remember, it is only when the final line is truly sung from the heart that one can appreciate the scope of anguish and angst that the artist is attempting to convey… Yesterday... Income tax was due, I had to pay... All the funds I tried to hide away... I don't believe, I'll eat 'till May. Suddenly... I'm not sure that I am fiscally... Ready for responsibility... Oh yesterday, came suddenly. Why, I Owed so much, I don't know, I couldn't say May be Forms were wrong, how I long, for yesterday. Yesterday... Seemed like prison time was on its way... Now I need a place to hide away... While keeping IRS at bay. Why, I Owed so much, I don't know, I couldn't say May be Forms were wrong, how I long, for yesterday. Yesterday... Taxes due, I filed come what may... Losing all deductions that's my way... Of giving IRS my pay. mm - mm - mm - mm - mm - mm - mm.

By all means, if you can borrow at 5.5% and get a guaranteed return of 10%, do it. There are no risks: - lose your job? No risk there. - default of your family member's business? No risk there. - mis-estimate of your 10% return assumption? No risk there. - loss of diversification in your investments? No risk there. - risk of family alienation? No risk there.

Pre-nup is not relevant. The Plan must follow its own rules for distribution and who is defined to be the beneficiary. Hint: likely, the plan defines beneficiary as "spouse".

A hardship is not an eligible rollover distribution, so there is no mandatory withholding. There is 10% automatic withholding but that can be waived. I don't see a problem here.

It’s with sadness that I learned about Mike Preston’s passing when Linda called me yesterday. Anyone who was fortunate to spend any time with Mike, knew he was truly a unicorn. Technically brilliant, razor sharp intellect, generous, open and honest (even on uncomfortable subjects), always supportive, witty (very dry). I always enjoyed hearing him laugh! As I look at the comments on Benefitslink, and having shared news with other colleagues, I heard the comment over and over again “Mike saved my bacon!” Rather than repeat his expertise and prowness to which all have provided testimonials, I wanted to share some stories of Mike. Mike, always a fan of the keyboard shortcuts, would do his best to get me to follow his lead. As an exercise, he gave me an excel spreadsheet to do some calculations on. I was so slow using the mouse instead of the keyboard strokes, that he never asked me to do that calculation again. He never gave me any grief about this and I continued to work with him for the next 9 years. Looking back on that, he was fully supportive and allowed me the freedom to show my abilities, even though they differed from his. When Sal Tripodi was touring, a group of us would gather together to socialize, enjoy an adult beverage and have discussions about movies. When Mike joined us, he would initially try to engage Sal in more shop talk. We would tease him and ask him what movies he’s seen. We finally got him to engage on the movie “Crouching Tiger, Hidden Dragon”. That was a pretty fun moment when he was describing the fighting scenes to us. Mike was also a fan of the Sopranos. Mike would start grooving and moving to “Woke Up This Morning.” While they were traveling they asked me if I would record an episode for them. I remember Linda telling me that the tape also included some of my girls tv shows that included the Bernstein Bears, etc. She said Mike was wondering if I was trying to send him a message. We laughed at that. When my wife and I started our journey to begin a family, Mike and Linda were fully supportive. As I would later find out, Mike and Linda went down a similar journey without success. Without Mike and Linda’s full support, we would not be parents of twin girls. I feel fortunate that Mike and Linda have met my girls and know how much their support means to us. Mike, you will always be in our hearts. I’m thankful for our time together. Frank Suzuki

Peter, this compliment is long overdue. You are without question one of the most objective and fair minded observers I've encountered, as well as being a great source of information. If you decide to run for higher office, I'll vote for you!

If you're asking about for the owner the answer is ZERO. Only W2 pay counts as compensation and qualifies the owner as also an employee. You also have an issue with requirement for S-corp owner/employees to take a reasonable salary.

Plan permanency is a "thing". It is best discussed with an employer BEFORE the plan is adopted. This takes away the first excuse an employers makes is "no one ever told me so". Is the IRS serious about it? Yes, it's in the regulations and the IRS Manual. See https://www.law.cornell.edu/cfr/text/26/1.401-1 and 1.401-1(b)(2) in particular. Also see the IRS Manual Section 7.12.1.13 Permanency Requirements/Reasons for Termination https://www.irs.gov/irm/part7/irm_07-012-001#idm139730249437392 . This latter link provides a lot of details on what is considered by the IRS in reviewing a plan's permanency, and you will find the answers to your questions and a lot more information. Is this something the IRS even checks? Yes. One way the IRS can learn about the issue is during a review of a company's tax returns. Seeing a deduction for a contribution in one year but not in subsequent years likely will trigger a question. Another way depends in part on whether to plan has filed a Form 5500-EZ, 5500-SF or 5500. The IRS has a formal Entity Control Check that it uses to keep track of filings made year over year. See page 24 of the IFILE User Guide https://www.efast.dol.gov/fip/pubs/EFAST2_IFILE_User_Guide.pdf . The IRS can track filings for the pairing of the employer's EIN and Plan Number. If there are too few or an abrupt end with no designated final filing, this may trigger an inquiry. Keep in mind that a discontinuance of contributions also can lead to a plan being considered terminated. Take a peek at IRM 7.12.1.14. If you convince a plan to delay terminating but the employer makes no contributions, you potentially are making the situation more complicated. Consider cutting your losses with these clients, and focusing your time and resources on educating employers before they sign up.

If the amount was distributed in 2024 then it is taxable in 2024. Sorry to say, but waiting until the last minute caused this individual to miss their RMD for 2023. Play stupid games, win stupid prizes. At least the missed RMD was timely corrected and the excise tax is reduced to 10% under the new SECURE 2.0 rule. They could also request a waiver of the excise tax on Form 5329.

For thirteen kinds of distributions added or changed by SECURE 2019 and 2022, here’s my table to show whether: the specified kind of distribution is an exception from a provision that restrains a distribution until the participant’s severance-from-employment or age 59½; a plan’s administrator may rely on a claimant’s written certification that the claim meets conditions for the specified kind of distribution; the specified kind of distribution is an exception from § 72(t)(1)’s additional income tax on a too-early distribution; a distributee of the specified kind of distribution may repay the amount as a rollover contribution to an eligible retirement plan. Distributions added or changed by SECURE 2019 and 2022 I.R.C. § Kind of distribution (from an individual-account eligible retirement plan) Early?[1] Rely?[2] Excuse?[3] Repay?[4] Applies[5] 72(t)(H) Qualified birth or adoption distribution. Yes Yes Yes Yes 2020 72(t)(I) Emergency personal expense distribution Yes Yes Yes Yes 2024 72(t)(J) From a § 402A(e) emergency savings account Yes Yes Yes No 2024 72(t)(2)(K) Eligible distribution to domestic abuse victim Yes Yes Yes Yes 2024 72(t)(2)(L) Terminal illness No -- Yes Yes 2023 [6] 72(t)(2)(M) Qualified disaster recovery distribution Yes No Yes Yes 2021 [7] 72(t)(2)(N) Qualified long term care distribution No -- Yes No 2026 [8] 72(t)(10) Qualified public safety employee age 50 or 25 years No -- Yes No 2007 72(t)(11) Qualified disaster recovery distribution Yes No Yes Yes 2021 [9] 139C Qualified first responder retirement payments (disability-related) No -- No [10] No 2027 401(a)(39) Qualified long term care distribution No -- Yes No 2026 [11] 401(k)(14)(C) Hardship distribution (certification) Yes Yes No No 2023 402(l)(5)(A) Governmental plan payment for safety officer’s health insurance No -- Yes No 2023 [12] 403(b) Hardship distribution (certification) Yes Yes No No 2024 457(d)(4) Unforeseeable-emergency distribution (certification) Yes Yes No No 2023 2022 Dec. 29 © Guidance Publishers NOT tax or legal advice [1] This column describes whether the specified kind of distribution is an exception from a provision that restrains a distribution until the participant’s severance-from-employment or age 59½. [2] This column describes whether a plan’s administrator may rely on a claimant’s written “certification” that the claim meets conditions for the specified kind of distribution. [3] This column describes whether the specified kind of distribution is an exception from § 72(t)(1)’s additional income tax on a too-early distribution. [4] This column describes whether a distributee of the specified kind of distribution may repay the amount as a rollover contribution to an eligible retirement plan. [5] A note about when a provision first applies assumes all relevant plan, limitation, and tax years are the calendar year. [6] Internal Revenue Code of 1986 § 72(t)(2)(L) applies to a distribution made after December 29, 2022. [7] The changes apply regarding disasters with incident periods that began on or after January 26, 2021. [8] The change applies to distributions made after December 29, 2025. [9] The changes apply regarding disasters with incident periods that began on or after January 26, 2021. [10] Internal Revenue Code of 1986 § 139C provides an exclusion from gross income, which could affect the income subject to a § 72(t)(1) tax. [11] The change applies to distributions made after December 29, 2025. [12] The change applies to distributions made after December 29, 2022. Distributions added or changed by SECURE 2019 and 2022.pdf

In my opinion, you need to have more to go on than "the market was down." Have the client or investment institution provide you with the rate of interest those participants would have received had the matching contributions been invested in their accounts (assuming participants give investment direction, those rates would likely be different for each participant). It's possible (although maybe not likely) that one participant was invested in a very conservative investment vehicle and had a small positive return. If all of those accounts had investment losses, the safest thing to do may be to not allocate interest on the late matching contributions (rather than reducing the matching contributions for the loss, although there may be validity to that argument). There's no requirement to allocate interest if there is none. We have done a few corrections where we did not include interest because of negative returns during the period of failure. We always document an EPCRS correction with a memo to the file that describes the failure; gives a detailed description of what we did to correct the failure, including the process, calculations, and other considerations, if any; and recites which sections of EPCRS we relied on in making the correction. And we attach any pertinent calculations or documentation (such as something showing what the interest rates were for each person). This is very helpful for the client to have in case of audit so they can show that they appropriately fixed an operational failure. It's also helpful in cases where there are personnel changes in a company and the new people are trying to figure out what their predecessors did.

Very interesting topic and comments - but I think the discussion is somewhat off the real issue here. The fundamental problem is "what is Bitcoin and other cryptos?" I really hesitate to call it an asset as it has no, nada, zip, zilch intrinsic value. It is a computer record that is more of a medium for the exchange of wealth between buyers and sellers. Standing alone, it isn't a "productive" investment. One could argue that dollars have no intrinsic value as well - but dollars are backed by the full faith and credit of U.S. government (and we can discuss how much that is worth - but it is worth more than cryptos - which lack any backing whatsoever.) Add to that, it is an unregulated investment, unlike other investments (even scarily volatile/risky and other "V3" types of investments commonly called derivatives, or some options, commodities and the like). EVERYTHING ELSE that is an "investment" is regulated by some entity - in order to ensure minimally sufficient information is available for investors to make informed choices, and to ensure the integrity of the platforms on which the investments are traded. NO SO FOR CRYPTO. The fundamental problem here, is that people are arguing that a "prudent fiduciary" should be able to evaluate an unlimited universe of potential options (and select some of them prudently, of course), and that in order for some to speculate (and there is no other word for an investment in crypto) on something unregulated, without intrinsic value, and not productive (in the sense that it's value is pegged to its ability make money through some business operation) to allow something for which there is no information on how the thing is priced, traded, secured, or even subject to the jurisdiction of U.S. Courts (an ERISA requirement). I see no criteria that would allow a fiduciary to even evaluate this as a plan investment, let alone conclude that it was a "prudent" investment. Past performance is not indicative of future performance" is applicable here. It went up! It must be good. It also went down - and no one knows why it goes up and down.... No way to evaluate trader sentiment which seems to be the only driver of it's price. If people want to participate in the frenzy that is crypto - well, do it outside the plan where prudence considerations are personal, and not plan wide, or invest through an ETF that invests in crypto and crypto related assets (which are regulated and recognized as investments), or invest in companies that develop, promote or provide platforms for the trading of crypto. That said, the underlying technology of blockchain is a technology that has intrinsic value as it's uses are vastly more varied (and important) than just providing a foundation for cryptocurrencies. THAT may be worth investing in - and may be a prudent choice. Keep in mind that Fidelity is fundamentally a marketing company. They jumped on the bandwagon by developing a product to allow for trading in crypto on their DC plan platform. They got press. They are entitled to build their platform as they see fit - without fiduciary ramifications - just as my employer (whom I refer to as a "non-discretionary directed ministerial service provider" (aka not a fiduciary...) can build it's platform as it sees fit (without - for now - crypto - or even allowing for cannabis companies as clients (again, for now). I expect that Fidelity will get only a handful of niche clients who opt for crypto in their plan. Nonetheless, they got press for being an innovative company - forward thinking. And that is probably their ultimate goal/win by doing this. Congress' inquiry here is essential. Not so much as to regulate fiduciaries - but to understand the fiduciary implications, and then possibly legislate a regulatory scheme that protects crypto investors - not so much from the speculative nature of the investment, but from the lack of transparency, and security surrounding the trading of crypto.

Mom is 94 (reasonable health) but still needs my time more than what this job would ever permit. Plus now I will be get to Mass daily, without worrying about the time constraints and work load this job requires, a big plus for me. And time to bake more cookies and stuff to giveaway. My favorite being the springerle. Have yet to find anyone to turn down one of those. My deepest appreciation for those to have helped me learn along the way, my apologies to those I may have inadvertently offended by any comments I may have made. In the cartoon Futurama, the character Fry made the comment "You remember Star Trek, 79 episodes, maybe 30 good ones". I figure that might be about how many really good and worthwhile comments I posted. Dave Baker is going to be glad because he won't have to listed to complaints about the bad jokes, humorless songs and awful puns I occasionally posted. My favorite takeaways after all these years: I know a few have said I'm a bit crazy for giving away stuff for free, but has been a big highlight for me. Hopefully the few Relius reports I have posted have proved useful and a time saver to some, along with the excel file for projecting the new limits. Someone else can worry about updating that every year. Ha. Over the years it has been kind of neat to see postings on the internet about projected limits. And I had the nicest comment years ago from FT William about the SSA report to pull the data from Relius into their system. The best advice I can provide, something I have always tried to keep in mind with my dealing with others: God has a benefit plan that is out of this world, so store up for yourselves treasures in heaven, not the things here on earth.

The Washington Redskins finally drop offensive name: Dan Snyder, owner of the NFL Redskins, has announced that the team is dropping the word "Washington" from the team name, and it will henceforth be simply known as "The Redskins.” It was reported that he finds the word 'Washington' imparts a negative image of poor leadership, mismanagement, corruption, cheating, lying, and graft, and is not a fitting role-model for young fans of the sport.

I rarely disagree by name but I disagree with Jpod on this one. Josh I agree you have every right to protect your interests. As such you should ask all the quesitons you need to determine you really were overpaid or not. But if you owe the plan money you should pay it. This is simply good ethics. I have been on both sides of this. I have made mistakes that have caused participants to be overpaid and underpaid. If I find a person is underpaid I work to get them paid. The reality is I could many times let ignorance be bliss tell no one I made a mistake and no one would know there was a mistake and an underpayment happened. I don't let it happen. I have made mistakes where a person was overpaid and was relieved when they agreed to repay the money that was a mistake. And yes you shouldn't have to pay taxes if the IRA returns the money to the plan via a trustee to trustee transfer.

I use BenefitsLink and ask you guys....