I am looking for a well-written guide to in-plan Roth conversions, assuming there is such a thing available. All comments/suggestions appreciated.

New plan last year.  Getting a feel for the business.  

2 employees have recently terminated.  The office manager said that sometimes these guys quit but come back later.  Plan is a SH match. Payout is immediate.  I can make sure they are whole with regards to the SH match so their payout is complete and final.  But what if they come back?  

There would be no forfeiture because it's a SH plan and everything is 100% vested
They could put their money back if it is within 60 days (right?)
If they come back before a year has passed there is no break in service so they would be back in.  

Am I good with regards to my understanding? 

Thanks

Participant is requesting a hardship distribution for purchase of an RV that will be used as participant's principal residence.  Plan document allows for hardship distributions for safe harbor purposes.  I see no issue with allowing the hardship distribution.  Recordkeeper is asserting that the IRS requires that a principal residence be a "fixed" dwelling and that they have unequivocally indicated that a motorhome is not considered a principal residence.  The recordkeeper offers no documentation just their assertion.

Has the IRS indicated that an RV cannot serve as a principal residence? 

Thank you for any guidance.         

My apologies if someone else has already brought this up on one of the boards. If so, please redirect me there. 

Have other people encountered this recently? What are your thoughts?

This past week several of our clients have received e-mails from a large bundled provider attempting to drum up business. (we are a traditional TPA) The e-mail states in part "Your TPA is filing your 5500 wrong" and then goes on to explain that Lines 10e and 8f MUST match, and that they are opening themselves up to audit and penalties from the DOL. The e-mails have screenshots of the two lines from their most recent filed Form 5500-SF. 

I was outraged when I saw the e-mails. I'm just wondering if my outrage is a bit displaced, or perhaps a disproportionate response, because like many folks we are really really focused on getting everything done by 10/17 and things that I would typically be able to shrug off are getting under my skin. Clearly this has bothered me enough to make a post. 

Thoughts?

A cash balance plan excludes all HCEs except the owner.  The plan defines the contribution credit for Group 2 (all participants other than the owner) as .5% accrual to cover meaningful benefits.  All NHCEs are participating but the 40% coverage requirement of (a)(26) isn't satisfied for 2021.  The only way this can be cured is by making one HCE a participant retroactive to 2021.  Can this be done by an 11(g) amendment naming one HCE a participant, or will that be deemed discriminatory since effectively the amendment is granting an accrual just to one HCE?  Must this go through VCP? 

Thanks.

Retirement Plan set up for the first time today effective 2021.  Therefore no extension was filed.  I have checked the box indicating that the plan was adopted retroactively under SECURE Act. Should I indicate in the "Special Extension" box "SECURE Act Section 201"?

Seems like the most practical approach.  Perhaps the IRS has even already issued something about this?

I need to file two 5500-ez via the IRS relief program dating back 7 & 8  years when my solo/individual 401k exceeded $250k (I was ignorant of the requirement to do this). The $500 penalty per submission is a bargain compared to the alternative.

What I don't understand is why the Department of Labor DFVC program doesn't also cover solo 401k's 5500-ez submissions  - won't the paper submission of the delinquent 5500-ez via the IRS relief program almost certainly trigger an insanely high penalty dating back 7/8 years from the Department of Labor as well?

Taking on a new client where the forms have been filed as a Form 5500-SF.  However, it's a one-person plan and really should have been filed as a Form 5500-EZ from inception.  Is there any issues with just making the switch for the 2021 Plan Year or should we continue to file it as an SF?

Just want to make sure we don't create any issues for the client.

Read this case from the U.S. District Court in Georgia dealing with the naming of a beneficiary of a pension plan. -

https://scholar.google.com/scholar_case?case=7964216609854086279&hl=en&lr=lang_en&as_sdt=20006&as_vis=1&oi=scholaralrt&hist=bY5nDLcAAAAJ:17102308171145443235:AAGBfm2dXJvPo0nUQKlDLqIPUBXxyXMitw&html=&pos=0&folt=kw

Who is responsible for the chaos described?  The Participant who had no idea what he was doing?  The Plan Administrator who obviously was not paying attention to the actions of the Participant and his violation of Plan requirements?  The Sponsor who adopted Plan rules that clearly were not understood by the Plan Participant?   

Lots of lessons here.  I suspect the case will be appealed.    

Hi, 

Plan is terminating due to asset sale and the sale will happen December 1st 2022.  Regular pay roll end on Nov 30th however they will be retention bonus post acquisition .  The terminating employer will happen they EIN and will be a participating employer. 

I feel this might be a controlled group or lead to a controlled group - Is it possible? 

Can they make the bonus payment post the plan termination? The plan will terminate in December and they are likely to start the process in Feb 2023. 

Can the seller be a participating employer? 

Thanks

If the change to the welfare plan is only service providers, but actual contributions, benefits, eligibilties etc all remain the same, is an SMM actually required? Or is it sufficient to provide this information on the annual Open Enrollment paperwork?

401k plan participant account incudes appreciated employer securities and mutual funds

The participant wants to transfer a portion of his appreciated company stock to a taxable brokerage account while rolling to an IRA the balance.  Mutual fund balance would also be rolled to an IRA ensuring a lump sum distribution.  More specifically he want to rollover the stock basis to an IRA (thus avoiding paying income tax on the basis) while transferring NUA portion to a brokerage account (avoiding LTCG tax until he sells the stock).  Thus leading to no immediate taxation 

From my research the IRS has blessed this NUA strategy in a series of PLRs.  My question(s) are regarding the order and method of transactions.

For example does the stock need to be distributed first (before the mutual funds) or vice versa?

Furthermore, does the ordering of employer securities rollover/transfer matter?  For example, let's say the participant has $100,000 in stock ($10,000) is basis where the remaining $90,00 is NUA. Can the $100,000 be split (90/10) in a single transaction by a IRA rollover and transfer to a taxable brokerage account? Does it matter if the stock is moved via trustee transfer vs 60 day rollover?

All help is appreciated. 

Does anyone know what, if anything, is required to be covered in terms of mental health benefits for a self-insured, non-grandfathered plan?

Hi, 

Sponsor wants to terminate the ESOP plan due to merger/acquisition. Its an individual design plan, Plan is terminating due to acquisition and the stock funds to be liquidated and transfer proceeds to Money market funds. There is a black out period until the processing of the merger proceeds is completed. The liquidation and settlement will be completed the week on 09/19/2022.  The sponsor intends to inform the part's that they have option to rollover into IRA, rollover into their 401k plan or the new employer 401k Plan or take cash distribution.  They are filing for 5310.  Is there something we will need to consider since they are filing for 5310 or just follow the normal termination process. 

Thanks

I just wanted to double-check if this would be considered a controlled group or not:

Company A - Husband owns 100%
Company B - Wife owns 100%

The two business, while in the same industry, are completely unrelated and the spouses do not work or do business with each other.

So would this be a controlled group through attribution or are they excluded?

Executive spends 6 months in US an 6 months in foreign country.  Paid for part of the year in each country.  US comp is just under $130,000.  If  the Chinese comp for the work done in China counts towards being an HCE, then he would be an HCE.

Does it count?  My definition of comp for 415 is w-2 wages...

I have a multiemployer 401(k) plan that is comprised of 20 employers, with all participants collectively bargained (i.e., there are no non-union employees in the plan), and all part of the same CBA.  When performing the ADP testing for this plan, would I test each employer on its own or am I required to test the entire population as one employer?  The regs indicate that I must test the entire plan as one employer, but I could have sworn that testing for multiemployer plans was always done on an employer by employer basis.  (Meaning for this plan, if 19 of the 20 employers had no HCEs I could ignore those groups and just test the 1 employer that has an HCE).

Perhaps what I always thought was the case has simply always been wrong.  Any help is appreciated!

Takeover document for 2021 limits 401(k) contributions to 17% of pay.  Some are over that % for 2021.  Are those considered 402(g) or Excess 415 contributions?  

Without judging the setup of this company's legacy multiple retirement plans, they have the following:

• One plan for all employees
• Each partner has their own plan

(not related to this question, the plans are tested as one controlled group, all plans mirror each other and all participants have the option for self direction)

Situation:  A new Partner has set up a new plan, and ultimately contributed $400 for the past plan year (prior to plan year end), simply to get the trust set up.

Inasmuch as a one-person plan with less than $250k does not need to file an EZ, my understanding is that because of the controlled group situation, a 5500-EZ is indeed required in this case.

Curious of any thoughts or differing opinions?

I have a client that maintains a solo 401(k), and while meeting with them to prepare their plan restatement, it appears that they let their two children work part-time during 2020 and 2021.  The plan document provides no conditions for eligibility, and only excludes non-resident aliens and union employees.  So, it appears that the children should have been allowed to defer to the Plan and their missed deferral opportunity constitutes an operational failure.  As a result of the daughters working as part-time employees, it appears that the Plan can no longer be considered a solo 401(k), and thus must now:

1. Distribute a Summary Plan Description.

2. File a Form 5500-SF instead of 5500-EZ.

3. Must now perform non-discrimination testing

4.Must now perform coverage testing.

5. ....?

Is there anything else I may be missing?  Upon review of EPCRs, the missed deferral opportunity itself seems like an "insignificant" operational failure, and thus eligible for SCP, but concerned that the overall effects of making it no longer a Solo 401(k) may require a VCP correction.  Any other thoughts?