Hi, 

I've encountered a very strange situation, one of the terminating we have a participant with a bad ssn and also the account was set up without a name I'm not really sure how this could have happened.  Since the ssn is incorrect and we don't have a name how can these account be handled does IRS provide any guidance on bad ssn and unknown name. 

Hello my fellow pension geeks! I can't find this anywhere specifically mentioned, either in the 5330 instructions or on this board. Can the filer (not the preparer) sign the form electronically through something like DocuSign? The 5330 instructions do not say either way. The 5330 is also not listed on the irs.gov website as allowing electronic signatures for 2021. However, it would greatly help out for a project I'm working on. 

Please let me know your thoughts or share a resource I may have overlooked. Thank you kindly!

thank you for any help with this. Thank you!

IRA owners can have their RMD's used as QCD's. But Qual Plans cannot. Is there any way around this?

QCDs are a no brainer for those who give to charity anyway, because QCDs reduce AGI. Normal charitable contributions go on schedule A, which almost no one files anymore.  They get no charitable deduction.

Small business owners who continue to maintain their qual plans have to take RMD's but cannot use the QCD advantage.

Is there any way around that?

Hi Good Morning, 

A terminated plan needs to be re-opened because the plan sponsor discovered that some employees who were eligible for the employer incentive and Match did not receive it.   I believe the employer contribution is a taxable event however the plan sponsor feels its only reportable income similar to employer paid health insurance is that true? 

Thanks 

A terminated participant has an account balance with a client 401k plan that exceeds $5000.  I have looked through the document several times for guidance.   All I see if forms with signature lines for participant and plan sponsor.

Q:   If the balance is over $5000 and it (plan) is not subject to QJ&S annuity rules - does the distribution  form have to be signed/approved by the spouse? 

Or is that something the plan sponsor can decide arbitrarily?  The platform says they are set up to require spousal consent, but I don't see anything in plan document.  Thanks for any feedback.  They are holding up the distribution for this..  

An overfunded DB plan covering only the 100% owner is terminating and a QRP 401(k) plan is being set up to receive the excess assets while the participant's DB benefit will be rolled over to an IRA.  She will need to complete a distribution election form for the IRA RO, but does an election for the RO of only excess assets to the QRP also need to be made?  If so, would anyone have a sample they can share? 

Also, I imagine the RO to the QRP would need its own 1099-R, but what code would be used - G for direct RO?  This is a first for me so any help would be great! 

A participant passed away shortly before her RMD age.  Her spouse is the beneficiary and he is beyond age 72.

He does not want to take distribution of the account balance and prefers to leave it in the plan. 

(1)  Can he leave the balance in the plan indefinitly?

(2) He must begin taking RMDs from the plan; is this based on his DOB alone or does the deceased spouse's DOB factor into this as well?

Thank you

Have an employee who in 2021 & 2022 made contributions to the plan but he is an excluded employee.   How would you correct, just refund 100% of his contributions and forfeit the match.  Would the distribution be  considered 2022 income since it will take place in 2022.  What about his 2021 W2 that shows his employee 401k contribution.  Does he just file as is?

Thanks

A Dr. left a practice and started his own.  He rolled his pension into a new plan established by his new practice.  This money would be an unrelated rollover, correct?

He promptly took a $40K loan.  Made payments.  COVID comes and he suspended his payments. He forgot to re-start his payments so now the loan is in default.  

If I am correct and the money the loan was taken from was his rollover account, can't we just distribute the remaining balance, issue a 1099-R and be done?  Would it be an offset?

Dr. Loanshark is only 55, if that makes a difference.

We are terminating a defined benefit plan and have some participants with $0 accrued benefit. The Plan Sponsor has decided to file for approval with the IRS and we are filing with the PBGC. When do we consider the participant with no accrued benefits paid out of the plan? Would it be on the termination date or once we get approval from the IRS and pay out the participants with accrued benefits?

From the client:

We recently awarded a trip to Jamaica  through a raffle drawing for employees that elected to make contributions to AFSAPAC.  This trip is taxable to the employee.  We currently have a TFB (fringe benefits code) that we use for car allowances through payroll.  This code taxes them on the income but does not pay them a net amount in their paycheck.  For the annual 401k audit, we exclude this TFB amount from their gross income.  Can we use this code for the trip as well? 

Document specifically excludes "taxable fringe Benefit for car allowance" from compensation and that's it.

So, to me, that means this "income" is subject to 401(k) deduction.  But how do they deduct for it?

One company in a CG got sold.  The new ER does not have a plan, nor does it want one.

What happens to the folks in the old ER who were in the plan?

Numbers-wise, this is not a partial plan term--6 participants out of about 85.

So, do these people have to be 100% vested?

I would think not, but just want to make sure.

If a plan provides multiple forms of distribution to a Distributee (definition includes employees as well as Alt Payees), can the QDRO specifically eliminate some of those options?  Specifically if the QDRO provides for Immediate Payment, does that effectively eliminate the ability for the Alt Payee to choose a deferred benefit, one of the allowable forms of distribution, leaving them with only options that would provide for an immediate determination such as a lump sum payout or single life annuity.  

Have a bit of a weird scenario here and unsure how to proceed. We are getting ready to onboard Company X, who will be offering its employees a 401k for the first time. However, Company X acquired Company Y recently in a total stock purchase. Company Y has an existing Safe Harbor plan. Our belief is that Company X is now the sponsor of that plan. Is that correct? It isn't a merger of plans because there was no plan at Company X to merge with. If Company X is in fact now the sponsor of that Company Y plan, how can we get rid of the Safe Harbor provisions (Company X did not want a Safe Harbor plan)? Are Company X's employees eligible for the plan right now if they meet the general eligibility requirements? We believe yes. Can the SECURE Act provisions around Safe Harbor be utilized here for making a midyear change?

Thanks in advance for any insight or suggestions!

I am working on presenting such pros and cons to a client.  I can think of fairly long list of cons, but the only *pure* pro I can think of is benefit security for the members/participants. 

Anything else I can think of has significant cons working against it.

A taxable entity could get a deduction for contributions, but for medical that is significantly limited and would require an annual determination.

The trust could invest in assets the plan sponsor can't invest in directly, but that's problematic.  I.e., should any plan sponsor do this when the presumably have a core business/mission that they should focus on?  

Funding would lower the GAAP expense for the plan sponsor, but that is offset by the opportunity cost of using the money for something else.

What am I missing as a pro(s)?

Hello all,

We have a prospective client that wants our help in administering their ROBS plan. Our firm has no experience in administering these types of plans. Can anyone with experience tell me what goes into the administration and 5500 for this type of plan that is beyond what is normal for a regular 401k plan?

Thanks.

Our client has a PS 401(k) plan with 3% SH non-elective.  They have a new employee with a Visa; she is from Germany.  She has chosen to defer, but does not want to open an account (TD Ameritrade).  They have her first deferrals, which have been held for a couple weeks, as well as her 3% SH.  But there is presently no account for them to deposit the money to.

Can participant continue to defer if she refuses to open an account?  How long can ER hold the money before it becomes a problem?  Even if she does not defer, what do they do with her SH?  (Plan excludes "non-resident aliens" - she is here legally as a resident alien.

All thoughts and suggestions welcome.

Deceased participant...  
Spouse is the primary beneficiary...

Can she waive her right as the primary thus passing the benefit onto the secondary beneficiaries?  (the kids)