One-person plan that at one point had some assets - never enough to need to file a 5500-EZ.  All the money was invested in two limited partnerships... that went bankrupt.  So the two assets are literally worth zero.  Now he's terminating the plan, and I've got to file a 5500-EZ for the final year.  But it's going to start with $0 BOY; that seems like we're just asking for trouble.  Any suggestions other than to wait for the inevitable letter from the IRS?  Thanks.

If the benefit is distributed as an annuity for life, can it begin any time, even if the employee is still employed, without the employee incurring a 10% early distribution excise tax under Code section 72(t)? 

So hopefully I got your attention.   A medical practice agreed to convert their plan from RK A to RK B.  The plan has several self-directed brokerage accounts that are offered through RK As recordkeeping system so everything is (was) working fine.  Upon notification that the plan was leaving RK A told the Plan Sponsor that all assets in the SDAs would need to be liquidated and the cash transferred to the core accounts to then be liquidated and transferred to RK B.  Dr. X, who is a partner / member / owner, but not a majority owner, refused to liquidate his positions because he has a specific Russian ETF that is illiquid and represents a $250k unrealized loss. The fund is actually in the process of being liquidated by the fund company, but there is no known timeframe for when this process will end.  The Plan Sponsor still wants to convert from RK A to RK B but is at a standstill due to Dr X's refusal to liquidate his account.  Dr. X is not eligible for in-service withdrawals so he can't distribute in-kind shares to an IRA.  We have politely told him that he is potentially creating a fiduciary issue since he is taking his personal account into consideration and not doing what is in best interest of plan and other participants.  Can anyone chime in with thoughts on how to proceed? If at all?  Maybe I shouldn't want this plan, but the rest of the decision makers are great and they are VERY frustrated with Dr. X.

Sponsor filed 5500-SF in July, so on time.  

Sponsor could have had the automatic extension due to extended tax return, but didn't need it, and the 5500 doesn't reflect it (after all, why would it, since it was filed on time?)

SAR is due 2 months after the 5500 deadline.

Can that still be 12/15, or does it have to be 9/30 specifically as a result of not checking the automatic extension box on the 5500?

Hmmmm......

--bri

We have 2 clients in this situation both changed payroll companies in 2024.  

With the small client 10 participants, I can probably get actual earnings for the multi-month period and reduce by 50% (since funds would have been deposited evenly pro-rata over the period.

Then there is the large client 150 to 200. Getting actual earnings for the late period is not possible.  I know some will say you cannot use the DOL calculator unless you file with the IRS. I see no other practical option.

I don't why this has to fall on the TPA to fix when it is the payroll company responsibility and plan sponsor to monitor.  I told the small plan sponsor - what do your corporate accounting records who - there should be a 401(k) liability - withholding less payments to the plan. Accounting probably not kept current. (I know whining doesn't help.)

Thank you,

Tom

Company and participating employers are consolidating benefit plans so that all employees participate under one plan.  As a result, premiums will increase for some employees.  Company would like to understand if it's possible to pay certain employees a stipend on a pre-tax basis that is used to cover the increased premiums.  The plan is self-insured, so my thought is that providing this payment to some employees and not others presents some discrimination issues.  Also, if the stipend is paid through payroll, can it be deducted pre-tax to pay for the cost of premiums?  

A participant worked at Company Z & terminated employment at age 60.  At age 72, Company Z's plan began paying out RMD's from his account.  Participant zeroed out their account (rollover to IRA or direct distribution) 5 years later.  EE is rehired at age 80 and has no plan balance.  EE begins deferrals.  Does he get an RMD from his new deferrals or because he is currently employed, he does not need to receive an RMD from this account as it was previously zeroed out?

DB plan terminated a few years ago. An annuity provider was established in terms of transferring the pension benefits. It was discovered that an individual (who was already in pay status when the plan terminated) was overpaid. In terms of trying to collect those overpayments, do the provisions of SECURE 2.0 apply?

I have come to really dislike RMD questions. However, here goes:

Participant dies in 2023. Already taking RMD's. Spouse, who also works at the same company and is a participant, took his RMD in 2023, and then "moved" the balance of his account to her account in the plan. She is younger - late 60's. As I understand it, she can treat this money as her own, and no further RMD's are required until HER RBD. Have I got that right?

We have a client ABC with a SH 401(k) plan.  I just received word they are acquiring company XYZ that sponsors a SIMPLE IRA.  It's an assets purchase which will take place 9/30/2024.

I don't know if ABC wants to recognize service worked with XYZ in meeting eligibility.  I think that is likely.  

So, the 402(g) deferral limit would apply as combined for any SIMPLE deferrals and deferrals under the 401(k) plan for 2024. ABC only funds a 3% non-elective SH.  I'm guessing XYZ funds the SIMPLE match.  

If we sweep into the ABC plan XYZ employees who meet ABC eligibility, would the 401(k) funding be as simple as providing the 3% SH for ABC 12-months and former XYZ employees for 3-months?

I believe there is some flexibility in testing in the case of acquisitions.

Thank you!!

We sent all our 5558 extensions in one package for 12/31 on 7/30 as we always do.  About 60 of them by priority mail on 7/30.  Today one of my clients received a letter stating they were denying the extension because it was received late.  Here's my issue, I can't find the tracking receipt ANYWHERE.  It was on my bulletin board and now just vanished.  Sooooo was it just this one that got separated or my entire package.  I have two things, one my bank statement that shows my charge at the Post Office on 7/30 as well as the screenshot of where all my clients needing one were generated on 7/30.  I tried going to the Post Office to see if they could back track and provide my tracking number but some new person was there and I have to go back and speak with the Postmaster.  At any rate, has anyone had this happen? and do you think they'll accept what I have noted above to abate any penalty considering we have never filed a late return or extension.  I am praying this is a one off and that it just got separated from the package.  I've had plenty of instances over my 30 years where they say they haven't received the extension, I've sent it in, and never heard another thing and never included tracking, just sent it to them.  Thoughts?  Anyone else receiving these notices so far? Would you do anything else other than respond right away with what I mentioned.

Thanks!

Client directs me earlier this year to terminate their cash balance and safe harbor(3% nonelective) 401(K) plan due to a business decline. Appropriate resolutions,notices etc. were done.

Subsequently, business improves, and they decide  to still have a 401(k) plan and only proceed to  terminate the cash balance plan. Small business 401(k) with owner and about 10 employees. No deferrals were made prior to the 401k plan termination. Wondering if anyone has done a 401k pan termination/nullification  and what are the issues..Perhaps it is best to just proceed with the termination and start a  new 401(k) in 2025; however, the successor plan rules could be an issue. If we restart the terminated plan,  I am thinking the HCEs should not defer anything for 2024 and hence not require the safe harbor to satisfy the ADP. It would then be up to the sponsor to decide whether to give say 3% to the employees for the entire year or not since it would not really be a safe harbor plan for 2024..Any thoughts?

IRS Notice 2024-63, Q&A E-3, permits QSLP matches to be contributed at a different frequency than elective deferral matches.

Plan makes elective deferral matching contributions on a payroll period basis (that is, compensation and deferrals are measured on a payroll period basis).

Plan wants to implement a QSLP match feature, making the QSLP match on an annual basis (that is, compensation and QSLPs are measured on a plan year basis).

Does IRS Notice 2024-63 permit this plan design, or will the plan need to be amended to make the elective deferral match on an annual basis to sync up with the QSLP match feature (so that deferrals, QSLPs and compensation are measured on a plan year basis)?

Thanks.

Having a slow brain day for a change.

Fiscal plan 5/1/22 to 4/30/23. 

Limitation year is plan year.

2022 415 limit 245k, 2023 415 limit 265k

Froze the plan 5/1/22.

What is the frozen 415 limit?

This is for a 1-person plan.

Owner overdeposited by < $50.

PS amt needed to be exact due to certain limits.

I'm thinking to just cut a check out of the plan to return it.

If a voluntary vendor offers a premium discount for other benefits (1% discount for our life coverages).  My concern is that this would constitute "consideration" and therefore would not satisfy that prong of the safe harbor exemption.  Any thoughts?

If a voluntary vendor offers a premium discount for other benefits (1% discount for our life coverages).  My concern is that this would constitute "consideration" and therefore would not satisfy that prong of the safe harbor exemption.  Any thoughts?

Company A is purchasing Company B.  Stock Transaction.

Company A is transitioning employees to Company B and wants to ensure that the employees in the transition get the annual PS.  PS has last day and 500 rule.

Can we amend the plan for just the employees transitioning?  Or, do we need to amend the plan to remove allocation conditions for all employees for the plan year?

I feel like we need to remove the conditions for all employees for the 2024 for Company A.....

Thoughts?

Thanks

Hi

Plan sponsor is an s-corp.

It is a CG with a sole-prop i.e. adopting employer.

No 5558 (first year of the plan, late adopter (put aside that they do not need to file) but curious.

For automatic extension purposes, plan sponsor deadline is the determining factor i.e. 9/16 because it is an s-corp and cannot rely on sole-prop extended deadline of 10/15.

Right?

I am working on a plan that has a QACA.  The plan has one group of participants hired before a certain date as 100% vested in the QACA match.  The group of participants hired after that same date is subject to a 2 year cliff schedule for the QACA match.  Is this permissible?  The two groups do not fall under the permissible disaggregation rules as the difference is based on hire date only.  Any thoughts?