Plan excludes Union employees.

January 2022, non-union employee, Tim, takes $10,000 loan for 5 years.

May 2024 Tim becomes union employee and is now in an excluded class in the plan.

What happens to the loan?

We have a single life DB plan that is at the 415 limit and is over-funded by roughly $500,000.  She is nearing retirement (in a year or maybe 2) and is trying to sort out her estate planning. 

The plan is currently set up with her husband as the beneficiary of her plan.  We are trying to determine what happens if they both pass before the assets in the plan have all been paid out. 

Also in question is if lump sum is taken how are surplus assets taxed? Plan provision pays only plan participants. Would this be a deemed “employer reversion” subject to 20% to 50% excise tax?

A newly formed Cash Balance Plan has in the first year a 415(b) accrual limit of $275,000 x (1/10) = $27,500.  In the second year the 415(b) accrual limit is $275,000 x (2/10) = $55,000 which is double (assuming no 415(b) $lim increase.  Does the 133 1/3 accrual rule limit the second year accrual  to 133 1/3 times the first year accrual?

Is plan administrator required to notify PBGC upon realizing that plan cannot be terminated using standard termination, because it is underfunded and will be filing for bankruptcy.  Client is going out of business and we've been in talks with PBGC and on track to do a standard termination (per PBGC's suggestion and also because it was possible we could fund the plan), but now we know we will be underfunded.  Do we have to let PBGC know that we know for certain now we're underfunded? Proposed termination date is 7/31.  

In completing Schedule R, are participants who have taken a distribution of their total invested account balance reported if they still have a receivable at the end of the year?  That is, if the participant's account balance is only a receivable are they considered fully paid out?

deferral and SH have 1 YOS requirement, and PSC has 2 YOS. a participant is eligible for deferral/SHNEC but ineligible for PSC. should he be included in gateway test and get gateway minimum as he is benefiting SHNEC (an ER contrib)? thanks!

We are facing a debate: for a final Form 5500 report there is agreement that on page two of the Form 5500 the end of the Plan year participant count is left as zero. However, some have a covered persons count with those enrolled at the end of the Plan year on a Schedule A. Others have said that this is incorrect;  the Schedule A also is to list zero. Can anyone settle the debate? 

We have an employer who owns 2 companies:

1) Company A: has employees. Currently has a 401(k) plan.

2) Company B: has no other employees besides the owner. Currently has no plan.

Can the owner set up a SIMPLE IRA for company B? Based on my research, it seems like it's not possible, but wanted to make sure.

Thanks,

Does the 12 month rule ( terminating 401(k) and starting a new plan) apply to a Solo 401(k) Plan.

In  December of 2023  solo 401(k) sponsor terminated his Roth 401(k) and rolled the funds to his Roth IRA.  Now he wants to start another Solo 401(k) for 2024.

Does the 12 month rule apply in which case he can not defer to the new plan until 2025?

Thank You

I have a plan that has terminated effective 12/31/2023.

I am completing their 12/31/2023 plan year end work.

There were 3 participants that took a full distribution in 2023 (prior to the plan term or knowledge of the plan term).  They were not fully vested to the profit sharing.  2 terminated in 2023 and 1 in 2020. 

The money was forfeited and used in 2023.

Do we need to restore the accounts of the 2 participants that termed and distributed in 2023? 

If yes, where do I find, exact DOL or IRS language? 

Thank you!

Has anyone had experience with a client who had a husband forge the wife signature to change beneficiary designations on Defined Contribution Plans?

Do you need Spousal Consent to withdraw from an Empower 457 Plan Account

If a Participant of a Plan during a Divorce changed their beneficiary designation from their sign and had someone else sign as the Wife to change it and to withdrawal, is that illegal and what can be done to make sure the other side receives their share of the Retirement?

We have a potential new client that is unhappy with the MEP that they joined 1/1/23. They would like to leave and become a standalone plan. How does a plan leave a MEP and become a standalone plan? Is this possible to do mid-year?  

Common Law marriage in a QDRO. Should include common law marriage dates in a QDRO?

Hi

Calendar 401k/SH/PS plan with 21/1 and dual entry as eligibility

EE DOH 1/1/2023.

Apparently deferred during 2023 (no idea when started deferring).

Just got an amendment signed in 2024 stating as the employee deferred during 2023, for this particular employee eligibility is waived effective 1/1/2023.

Does this sound right?

Thank you

IRA funds were drained by the owner's son hacking into her IRA account online. Son took the money, a police report was filed, and son is facing felony theft charges under state law. The money is gone; used to pay off gambling debts.

The IRA custodial institutions were notified. They are investigating. The IRA owner has now received from those institutions Forms 1099-R reporting the funds taken by the son as taxable income to the IRA owner (the parent). It would be adding insult to injury if the IRA owner has to pay the income taxes due on the stolen funds.

Any suggestions on how to handle these Forms 1099-R with the IRS?

Hello, I wondered if anyone may know - Is the Plan year in the Form 5500 and the Form M1 to match? The instructions in the Form M1 do not provide instruction on this. On page two the instructions note to use the same identifying information but do not classify  if the Plan year is to be included in this case. Any insight would be valuable. Many thanks! 

Looking for a interpretation of the below from the 1099-r instructions.

If someone separated from service earlier in 2024 and takes a distribution now but are only age 54.  Are they exempt from the 10% early distribution penalty because they will turn 55 later in 2024?

Thank you, Tom

I am a Paralegal and I am assisting a homeless woman divorcing her husband. In the Domestic Relations Order, should I include the total months of marriage and total months of employment so that the Plan Administrator will know how to divide benefits?