Can a plan have a younger RMD age than the age required by law? The RMD is age is the latest age at which a participant must begin taking distributions, but is there a reason a 401(k) plan couldn't use a younger age than required? 

Put another way, can a 401(k) plan require a participant that turns age 72 during 2023 to begin RMDs by 4/1/2024? 

Suppose you take the approach that the 5,000 cash out limit will increase to 7,000 for 2024, unless the employer informs you otherwise.

Is there any dispensation on the timing of including this in the safe harbor notice? Or, realistically, issue an updated one once it is truly "known" as to whether or not, and exactly when, it is effective? I presume the latter...

Does anyone know when the Cost of Living Adjustments will be officially announced? I have seen many projections but nothing from the IRS.

Thank you.

I recently took over a plan for 2023.  Each participant has his own account, which the trustee directs (?) with MS

I convinced him the participants should be directing their own investments, the accounts will remain at MS.

Is there a blackout period, or will a notice to each participant that, effective x date, they can have the option to direct the account.

Dentists are know for having "prn" employees.  These people fill in vacations, etc.  Often they've worked in the past but left.  So on one hand they terminated some time in the past but they are still getting paid now and then and getting a plan contribution since they were previously eligible.  So if the person is 73, I supposed best to do an RMD to be safe.

Tom

I used to have a great chart of what the maximum allocation was in a cash balance plan. Rows were ages, and columns were different income levels. But the company who did that stopped doing it.  Anyone know of a good website?  I would figure there would be someone out there who would even have a little calculator (enter age, comp, etc and it spits out a funding range, etc).  Anyway, that chart was so handy  becaue you could give clients on a call a quick idea of the numbers being discussed without having to go to the actuary.  Obviously you follow up with the actuary for the real numbers but again the chart was just really handy.

I'm assisting in a plan merger of 2 DB plans (same sponsor), and preparing the IRS Form 5310-A.  Line 5a requests an actuarial statement showing compliance with IRC 401(a)(12) and 414(L).  Anyone willing to share information about the form and substance of such attachment?

With this effective 1/1/24 and I think limited guidelines on how to enact this, I'm thinking that it can be administered as follows for a plan that deposits match on a payroll basis:

• Participant provides a recent statement of the loan showing payment amount, and amortization schedule, or length of payment plan
• Payroll then treats equivalent payment per payroll (loan pmt x 12 / (24 or 26) ) for standard payroll schedules.
• Payroll then sums up 401(k) + equivalent loan payment and applies match formula on payroll basis.

Note these are just initial thoughts.

The Form 5500 preparer will not net new forfeitures collected in the year with the distributions, but is showing them as "other income".  Is this correct?

What are the best options for someone who wants to offer their 1 employee a retirement plan? 

This would only be for the employee, not an owner. 

Hello,

We just got our statements and I realized I did not get any contribution in 2022 due to having a baby. We require 1000 hours and I had 802. I took a look at our contract and looks like they should be crediting me for those hours. I brought this to their attention and they said I am wrong because I was not paid by my employer I was paid by the state. I’ve attached the pages of our contract with the information regarding leaves. Microsoft Word - 2020 New Plan SPD - 3155.pdfesop contract.pdf

Microsoft Word - 2020 New Plan SPD - 3155.pdf esop contract.pdf

So, employer (A) is purchased in a stock sale by Employer (B), let's say on April 1 (yes, humor intended). Employer A has a 401(k) plan, Employer (B) has a 401(k) plan. Both are calendar year corporations. (A)and (B) become a controlled group as of the date of the purchase. Most of the employees of (A) transfer to (B) as of the date of purchase

Employer A does a plan termination as of November 30 of that same year, and DISTRIBUTES all assets, except to the now employees of (B) who ELECTED to have their funds transferred to (B)'s plan. Others chose to receive a distribution. (I'm going on incomplete information here - all details not yet known).

So when there is an impermissible distribution of deferrals under the Successor plan rule, what's the correction? Anyone gone through VCP and gotten an approval for a correction that doesn't require heroic and "unreasonable" results?

P.S. - I know we've discussed this before - and in a VCP filing where participants rolled to the new plan, we'd probably ask to consider these as "transfers." Or something like that. It's more the participants who rolled it out to an IRA, or took in cash that I'm not sure of.

Hello,

Does anyone know of a site where I could post a question about a union's right to the same access to talk to new hires as is given to the company's anti-union group? The parties are under the RLA.

Thank you for any suggestions you may have!

Ponderer33  

If a plan is terminated mid year, the 430 regs tell us to use the termination date as the val date and treat the plan for 430 purposes as having a short plan year. The minimum is due 8.5 months after the end of the short plan year. Do we count 8.5 months from the end of the month like with the final 5500 filing or is a more precise counting required. For example, if the plan terminated today 10/23/2023 is the contribution due date 7/15/2024 or some other date?

Can a plan have an age based match formula?  Assuming it would pass BRF testing.

For example:

50% of deferrals up to 6% of comp for those under age 45

75% of deferrals up to 6% of comp for those over age 45

Please let me preface this request by saying I don’t do corrections work, and my interest is only academic. I’m developing a lesson for my multidisciplinary course on Professional Conduct in Tax Practice.

For a Voluntary Correction Program submission to the Internal Revenue Service, a plan sponsor might want a representative, and might find it efficient and effective to be represented by a practitioner who works for the recordkeeper or third-party administrator.

Do some offer this service?

Must a submission be prepared, or at least supervised, by an owner or employee who is an attorney, accountant, actuary, or enrolled retirement plan agent recognized for practice before the IRS?

If the practitioner’s employer was at fault for the to-be-corrected failure, does the practitioner have a conflict of interests?

What ways do you use to avoid or manage such a conflict?

If the practitioner’s employer was not at fault for but was involved about the to-be-corrected failure, does the practitioner have a conflict of interests?

What ways do you use to avoid or manage such a conflict?

If a recordkeeper or TPA does not offer a service of letting its employee serve as a plan sponsor’s representative, is that because you see a conflict that can’t be avoided or managed?

Because I lack experience, I hope BenefitsLink neighbors will help me learn about real-world practice.

Okay - Not experienced yet enough with Cash Balance Plans.

Just making sure - aside from using the Comp Limit, is there a limit on the amount of 'contribution' shown on a Cash Balance Participant Statement? I think not.

I have been following all discussions related to QDRO, defined benefit plan, alternate payee and also noted post that new law does not address QDRO divorce and how alternate payee/participant would be affected, which is ironic to me at this time since I am trying to become informed late in life. I have paid an atty a consultation fee and was told he could not advise me as the QDRO was prepared in Az. and he did not know Wa. DRS law. So here is my question, can a QDRO be amended post-divorce? Factors to consider: M 8/15/1992 Washington, ex was a teacher. D 9/15/2014 ex was a Superintendent of school district. Awful divorce, custody issues and I was in remission from breast cancer. Ex remarried, cashed in Az. Retirement, I was informed by ASRS and began receiving 700$ after paperwork signed That was in 2021. He then relocated to Wa. rehired by School Dist. 7/15/23 my sons all here in Az. 2 in college 1 adulting, said their father retired and was moving to CRica. I looked at QDRO & divorce papers. I found a letter dated 2017, from Wa. DRS stating I was in TRS3 defined benefit plan and upon age 65 I would receive $610. monthly. I did sign divorce decree stating due to the fact I would be receiving substantial retirement benefits, my ex was only obligated to pay 36 mos of alimony. No mention of ASRS or Washington retirement. Then QDRO was detained and I do remember that, until 4/05/17 where the retirement accounts do not specify any amount, but say that upon retirement ex & myself can withdraw contributions or begin to receive retirement benefits as defined by the PLAN . The letter dated 4/15/2017 say I can withdraw at 65. I would be fine with that but I might not get there as implants had to be removed due to infection and tumor which is benign but I am not healthy. I cannot name my kids as beneficiaries, and I am furious. Neither ASRS nor TRS3 plan were ever disclosed until after the fact. The QDRO attorney has retired and sold his practice. Do I have any chance to amend? If so, which state should I hire attorney? FYI I received nothing post-divorce in terms of assets. My ex-husband hadn’t paid mortgage and house went into foreclosure. I am a preschool teacher and now on unpaid leave. Which I know is irrelevant, because in the end my sons are here and we are moving forward. But this derailed me. I am 56. He is 57.

We had a client terminate their Plan and pay everyone out in September. We have discovered that one of the participants was shorted $5 on their 401k deferrals during the year while finishing up the last Form 5500. This deposit happened in March. How can we rectify this? Could they give the employee a $5 check? Deposit the $5 to the Plan and see if they will send them another check? I'm thinking they may take it all in fees if that is the case. The client wants to submit Form 5310 to receive a determination letter so I want to make sure it is handled properly.

I have a plan where the plan sponsor acquired a new company which does not have a retirement plan. The plan sponsor (buyer) wants to add on the newly acquired company as an adopting employer. They are a controlled group, so no issues there. Since the plan sponsor has a safe harbor plan, are there any issues having the newly acquired company sign on as an adopting employer right away vs. needing to wait to give a 30-day SH notice to the employees of the new company first, or just wait until 1/1/2024? Anything else I'm missing?