Client has pension in TIAA, rolling $50,000 to Roth IRA and paying tax on that.

He is also required to take an RMD, which is about $15,000.

Can the $50,000 coming out of TIAA and going into the Roth cover his RMD requirement?  

It seems like that would be a 'no' but I am not an expert on this.

Thanks.

When I was doing some random browsing, I saw something on this that made be do some additional browsing. There are MANY websites out there that say you are a HCE if you had more than $150,000 compensation in 2022. 

Now, while true, it seems to me that this is very misleading, as some of the charts, etc. would lead someone to believe that the THRESHOLD is $150,000, rather than $135,000, so that if you had, say, $145,000 in compensation in 2022, you would not be a HCE in 2023.

Are others seeing this, or getting questions due to this type of information out there?

Hi

My very first age 72 RMD.

Turned 72 in September 2022, when is my first RMD due from the DB plan?

Is the AB based on 12/31/2021 AB if starting 4/1/2023?

If participant wants 2022 RMD and withdraws in December 2022, can he receive annual lump sum by 12/31/2022?

Thank you

We have been attempting to terminate a Plan for about a year that is with Ascensus. We have a handful of terminated employees and a deceased participant. The deceased participant's spouse does not want the funds and refuses to sign paperwork (they were estranged for many years). We would like to force them out to an IRA and finally close this Plan. However Ascensus refuses to let this happen. They say that Plan cannot terminate until beneficiary signs forms. No one else can be forced out as they want checks to be cut at same time. I have countered that they are excercising  control over Plan Assets and acting as a fiduciary but they claim that in the termination paperwork they require you to sign, the Plan Sponsor requests no one gets paid out unless they sign a form. I don't know how many years Ascensus expects them to continue the Plan for this beneficiary. Does anyone have this experience or ideas?

Hi

One life/owner only CB plan. 3 years old. Business is sold, needs to terminate by 12/31/2022

Plan document states any excess to be reverted to the corporation (there will be no DC plan as QRP- qualified replacement plan).

The participant is nowhere near the 415 limit and the excess, if can be provided to the participant, will be eliminated.

Can the plan be amended so that the excess can be provided to the plan participant rather than being reverted to the corporation? I am aware of the 5 year rule but always wondered it was only for switching from participant to the company. 

Thank you

Hi

Cash balance plan with 10 groups, some groups cover individuals (like founding member) and some groups cover multiple participants (like support staff).

Benefits are to be frozen.

Can 10 different 204(h) notices be provided for each group separately?

Thank you

Does anyone have access to the Relius/Sungard amendment for a Money Purchase Volume Submitter plan?  Looking for one for a takeover client.

Are there any special rules in terms of hardship distributions and the impact of a hurricane?  The participant is looking to use the money to fix her car, due to damage from a hurricane.  However, by the letter of the law, this wouldn't qualify as a hardship.  Before we just rejected the request, I wanted to be sure there wasn't a special exception out there.

Plan participant’s account is hacked by an outside fraudster. Participant sues plan sponsor for negligence. The two parties end up settling before trial. Can the plan sponsor deposit the settlement amount into the participant’s plan account? I seem to remember some IRS guidance saying it’s allowed if it is the result of a dispute that would have resulted in fiduciary breach. Does anyone have a cite? 

What type of calculations do you normally use for RMD calculations for Cash Balance and/or Defined Benefit Plans? I am aware that one option is a lump sum option in which a calculated monthly benefit from last year's valuation report * 12 months = current year RMD. Just wondering what has worked for you and if the method you use helps reduce the amount of taxes paid for the affected participant taking the RMD.

Can a 6/30 fiscal year tax-exempt plan sponsor adopt a calendar year nongovernmental 457(b) plan today, having an effective date of 1/1/2022?  The plan will have no employee elective deferrals, so the only contributions will be employer nonelective contributions.  The idea is for the employer to be able to contribute the maximum of $20,500 for 2022 based on full-year compensation of eligible employees by providing for either a retroactive 1/1/2022 entry date or a current entry date while including pre-participation compensation since the beginning of the calendar year.  Relatedly, must employer nonelective contributions for 2022 be made by 12/31/2022?

We have a plan that terminated and distributed all of the assets.  Unfortunately a residual dividend came in, despite the money having been liquidated into cash.  It's a small amount, so what's the best way to handle this without having to cut everyone a $0.50 check?

Can the plan sponsor issue an invoice to the Plan for mailing, etc. and pay it that way?

We are taking over a plan that has an insurance company document.  The document indicates spousal consent is not required for distributions (unless the plan includes a source that requires such - and there is no such source in the plan.)  The plan offers 5 annuity options as alternative forms of benefit.   We never have those in plans and I'd like to eliminate these with our restatement effective 1/1/2023.  It's been awhile since I looked at this.  Upon some quick research it appears that yes these can be eliminated prospectively with a 90-day advance notice and provided the plan has the lump sum option.  

I like to get the opinion of this group which is very trustworthy - more so than my own "research." 

Thank you, Tom

I'm really not sure about this. Suppose you have a tax-exempt (non-governmental) corporation sponsoring a 457(b) plan. This corporation also has a couple of 1-person LLC's that are "disregarded entities" for tax purposes. Question is - can those employees (1 in each LLC) be allowed to participate in the sponsoring organization's 457(b) plan? (Assuming they otherwise qualify in the select group of management or highly compensated employees.) Common sense (to me) says yes, but does anyone know of anything concrete one way or the other? Or have an opinion? Thanks!

A small CB Plan is terminating.  2 participants have elected deferred annuity.  3 participants with a balance of 5K did not return the forms.  Cumulative value for those 5 is about 60K.  Need a recommendation/reference/contact info who would underwrite this if anyone?  What are the options if no insurance carrier is interested?

Defined Contribution Plan is in termination stage.  IRS Form 5310 has been submitted and the Plan is waiting for IRS determination letter. The Plan Administrator wants to wait for the favorable determination letter prior to processing distributions.

However, the Plan Administrator would like to mail out distribution election forms for the Participants to complete sooner than later.  How long can the administrator hold the completed distribution election forms on file prior to processing?

Is it 180 days?

For example, if the Plan Administrator receives completed distribution election forms and maintains them on file and the IRS determination letter arrives 7 months after receipt of the forms, would that require new election forms to be obtained.

Hi

Owner just took the 2022 RMD in one shot based on 60% vested balance.

Now decides to terminate the plan in 2022 i.e. becomes 100% vested.

Does he need to get additional RMD or still based on 12/31/2021 vested percentage?

Thanks

When merging two 401(k) plans into a single plan, is it possible to merge the two trusts into a single trust after a designated plan merger date (i.e., corporate action taken to approve the merger and documents merged on the designated date, but trusts moved later)?  

Plan sponsor acquired a company with a 401(k) plan in 2021 and did not do anything about merging the plans until recently. Section 410(b)(6) transition rule ends 12/31/2022. Providers have said it's not possible to merge the two trusts by that date. Can the plan sponsor approve the plan merger and adopt a single plan document as of 12/31/2022 and merge the trusts in February 2023? Does this satisfy Section 410(b)(6)? Or do the trusts have to be merged to actually constitute a plan merger? 

Also, in what situations (if any) can two members of a controlled group maintain two separate 401(k) plans?

Company would like a deferred comp plan to pay an executive 10% of the value of the company in 5 equal annual payments beginning 60 days after separation of service, where the value of the company would be determined as of the date of separation by an independent appraiser.  Does this proposal violate 1.409A-3(i)(1), which requires that "objectively determinable amounts" be payable on the payment dates, and says an amount is objectively determinable if it is "specifically identified," or if the amount may be determined "pursuant to an objective, nondiscretionary formula . . . (for example, 50% of an account balance)?"

The regulations don't define "specifically identified."  Is it broad enough to include the appraised value, or does it need to be an exact number or something close to it?  It wouldn't seem that the appraised value would satisfy the objective, nondiscretionary formula, unless the plan specifies how the appraiser is to come up with the value, which isn't the intent.

If the proposed plan doesn't satisfy 1.409A-3(i)(1), is there any way to argue that provision doesn't apply to payments based on separation from service?

I have a one-person EZ that all the assets are in a brokerage account with an advisor. Somehow, with the changing of jobs and the relationship between us (the TPA) and them, this was missed. 

I explained that the VCP is the most straighforward way to do this, but they want to roll the dice. so my questions are:

what is the downside? isn't there a max $500 penalty either way?

what should the letter look like? addressed to the DOL or IRS, signed by the employer? A basic statement saying her two professional contacts missed the filing?

Thank you, this is the first time I've been in this situation.