My question is should you always get a tax identification number when you are setting up a new retirement plan? I setup a lot of new plans every year and a lot of them are with recordkeepers and my understanding is if the TIN isn't used the IRS will shut it down so a lot of times I haven't been getting a TIN and have just been using the EIN of the business. I know this is technically not accurate since the assets are not the employer's assets but from what I have seen I think this is quite common. Most recordkeepers I work with have never asked me for a Plan TIN for a plan and have just used the EIN of the business. 

I also setup a lot of solo 401(k)'s and have been doing the mega backdoor internal Roth conversion of after-tax employee money and these types of plans typically in my experience are setup in self-directed brokerage accounts so when I do the 1099 for the conversion I will have to have a TIN for the plan so these plans I have usually been applying for a plan TIN. 

Is it recommended to always get a plan TIN no matter what? Or from a practical standpoint can you just get one when you know you will use it on 1099's, etc. 

Hi everyone,

I may have made a grievous financial error.

Under the terms of my 2013 QDRO, I'm entitled to 100% of the marital share of my ex's pension. His plan's administrator in 2013 told me I'd start getting the pension when my ex retired. (That's my recollection. I'm hoping to find this exchange in writing.)

My ex is now age 62. He became eligible to retire at age 60, with 20 years of continuous service. 

I recently asked him about his intended retirement date. He referred me to his retirement plan administrator, who told me I was eligible to start my benefit "at any time." 

Have I forfeited either 2 or 9 years of pension payments? Is there any possible way for me to get back payment?

My QDRO is below, and the retirement plan is attached.

Thanks for helping me think this through!

Best,
Christie

QDRO EXCERPT
8. The parties and the Court intend this Order to constitute a "Qualified Domestic Relations Order" as defined in Section 414(p)(l) of the Internal Revenue Code of 1986, as amended (the "Code”), and Section 206(d)(3)(B) of the Employee Retirement Income Security ^ct of 1974, as amended ("ERISA").

9. This Order is issued pursuant to Section 20-107.3 of the 1950 Code of Virginia, as amended, which relates to the division of marital property rights between spouses and former spouses in actions for divorce.

10. The Alternate Payee is hereby assigned One Hundred Percent (100%) of the Participant’s total vested account balance under the Plan as of June 1, 2012, plus or minus any earnings and investment gains or losses thereon from June 1, 2012, to the date the Alternate Payee's share is segregated into a separate account in the Alternate Payee's name under the Plan. Such "total vested account balance" shall include all amounts which have accumulated under allof the various accounts and/or subaccounts established and maintained under the Plan on the Participant's behalf. There were no loans against the account as of June 1, 2012. The Alternate Payee's share of the benefits as set forth above shall be allocated on a pro rata basis among all of the accounts and/or investment funds maintained on behalf of the Participant under the Plan. If applicable, the Alternate Payee's share shall be paid from the non-loan assets in the Participant's account(s) on the date that the award is distributed from the Participant's account.

11. As soon as administratively feasible following the determination that this Order as a Qualified Domestic Relations Order, the Alternate Payee’s share as awarded hereunder shall dc segregated and separately maintained in an account established on the Alternate Payee's Behalf and shall additionally be credited with any investment earnings or losses attributable :hereon from the segregation date to the date of total distribution to the Alternate Payee. Notwithstanding the foregoing, the Alternate Payee may elect to receive her benefits in any brm or permissible option under the Plan, including, but not limited to, an immediate lump sum cash payment and/or a direct rollover into an IRA or other qualified retirement account in the Alternate Payee's name.

12. The Alternate Payee shall be eligible to receive payment as soon as administratively feasible following determination that this Order is a Qualified Domestic Relations Order. 

13. If the Participant predeceases the Alternate Payee prior to payment of the Alternate Payee's assigned benefits under the Plan, payment to the Alternate Payee shall  nonetheless be made under the terms of this Order. If the Alternate Payee dies before full payment to Alternate Payee has been made, the amount unpaid shall be made to the beneficiary designated by the Alternate Payee, or if no beneficiary has been so designated, in accordance 

14. No benefits have been previously assigned from the Participant's interest to another alternate payee under another order which has been determined to be a QDRO.

15. This transfer is intended to be a trustee-to-trustee transfer and a non-taxable went to either party; however, if the Alternate Payee elects to receive a direct distribution from he Plan, the Alternate Payee shall be treated as the distributee under 26 U.S.C. Sections 72 and 102 of the Internal Revenue Code on Federal, State and local income tax returns for all retirement benefits and distributions that the Alternate Payee receives due to the benefits assigned herein, and, as such, will be required to pay the appropriate Federal, State, and local income taxes on such distributions. 

16. The Alternate Payee shall notify the Plan Administrator in writing of any change in her mailing address as set forth above.

17. If the Plan is terminated, the Alternate Payee shall be entitled to receive the portion of the Participant’s benefits as stipulated herein in accordance with the Plan's termination provisions for participants and beneficiaries.

18. This Order does not require (i) the Plan to provide any type or form of benefit option not otherwise provided under the Plan; (ii) the Plan to provide increased benefits (determined on the basis of actuarial value); or (iii) the payment of any benefits to the Alternate with Plan provisions. Payee which are required to be paid to another alternate payee under another order previously determined to be a Qualified Domestic Relations Order.

SPD Ret Plan 2010-Dec.pdf

I am not involved in nonprofit/governmental plan admin work, but I have a question regarding references I see to "401(a) plans".  I have always viewed IRC 401(a) as a rather lengthy section containing a host of rules that apply to many types of private industry plans, and not necessarily isolated to governmental/nonprofit plans (e.g. retirement distribution rules under 401(a)(9) which apply to private plans). 

Is the term "401(a) Plan" just a way those involved in administering/working in this area distinguish certain governmental/nonprofit plans (mandatory contributions, etc) from other governmental plans, like 457(b) plans, or from 401(k) plans sponsored by private employers?

I am trying to find a good way to summarize the main purposes/provisions of IRC 401(a) but just about every article I find keeps referring to governmental, educational, non-profit 401(a) "plans". 

I am working on a small 401(k) plan. This plan has a 3% SHNEC. The PS allocation is Integrated. In reviewing the contributions, I see that 3% SHNEC was made for everyone but I'm also seeing a non-elective contribution made only to the HCE Owner.

I am not sure why she would get a non-elective and no one else. What am I missing or not seeing?

Interested to hear whether others have encountered this question and how they resolved it.

Under Section 401(c)(2)(iv), for 401(k) earned income purposes, net earnings from self-employment is calculated “without regard to items which are not included in gross income for purposes of this chapter, and the deductions properly allocable to or chargeable against such items.” 

The plan sponsor, which is a partnership, had a PPP loan that was used for deductible payroll expenses. The loan was fully forgiven. The forgiven PPP loan amount was (properly) excluded from gross income. The “deductions properly allocable to” the non-taxable PPP loan forgiveness amount arguably would be the payroll expenses covered by the PPP loan proceeds during the loan period. 

The CARES Act and later COVID tax-relief laws clarified that no deduction would be denied (i.e., the original payroll expenses could still be deducted on the partnership's tax return) solely by reason of a non-taxable PPP loan forgiveness, but I'm not sure that alone would override the relevant portion of 401(c) that says the deductions associated with a tax-exempt item of income should be disregarded for purposes of calculating 401(k) earned income. 

Disregarding the deductions would increase 401(k) earned income by the amount of deductible payroll expenses paid with the non-taxable PPP loan proceeds (and increase each partner’s earned income on which contributions are allocated).

Would appreciate everyone's thoughts. 
 

I have a client who is looking to stop allowing loans as of 10/01/22 (any loans already taken will continue to be paid off).  Is that an issue or can the "benefit" be taken away from a participant?

Thanks everyone?

Professional firm, each partner with their own corp.

On prior plan document restatements, all of the partners have signed, but for amendments, only the 2 who are designated as Individual Trustees have signed.

I'm curious what the standard approach is? I think the partners like to feel involved, but is it really necessary?

So law firm is made up of:

1. Multiple ALC's who share ownership of the law firm
2. Other ALC's who share office space and staffing, but not ownership in the main firm

The law firm has its own 401k plan. The other ALC's have their own individual law firm. All of them are tested as an Affiliated Service Group.

Now, the other ALC's have completely left the firm. I'm pretty sure there is no ASG anymore.

Greetings all, 

I used to work as a retirement plan administrator in India for 6+ year. Completed Retirement plan fundamentals 1& 2.
I moved to US before 4 years and recently got my work authorization to work in US. I started searching for jobs in different online portals. No reply or response for my application. 
 

can some one suggest how to approach for job in 401k field. Since I do not have any work experience in USA and I have 4 years break in service. 
 

Any leads or referrals will be appreciated. 
 

thanks in advance 

Plan states forfeitures are reallocated - must be employed on last day and 1,000 hours. Exception death, disability or retirement.

Platform stating the client wanted to use forfeitures to reduce the contribution. Amendment signed 5/1/2021. This was part of  the amendment changing eligible to date of hire vs 1,000 hour. Employee eligible 4/1/2021 and died the next day. Platform saying the amendment would be a cut back in benefits for her. She was eligible for the reallocation of forfeitures before the amendment was signed. 

Client  never wanted to use forfeitures to offset the employer contribution.  No one can figure out why the platform made this change. What if anything an they do to reallocate the funds for 2021.  We are not talking about a lot  of money.  

I know this is a document issue.  The amendment states - Costs of Administration. All reasonable costs and expenses (including legal, accounting, and employee
communication fees) incurred by the Administrator and the Trustee in administering the Plan and Trust may be paid from the
forfeitures (if any) resulting under Section 11.08, from the suspense account described in this Section, if any, or from the
remaining Trust Fund. All such costs and expenses paid from the remaining Trust Fund shall, unless allocable to the
Accounts of particular Participants, be charged against the Accounts of all Participants as provided in the Service Agreement.  This is what the recordkeeping is saying requires the forfeitures to be used to offset the er contribution.  I

There is not an option in the AA to say forfeitures are reallocated 

Need some help......

We don't work with these but a referring advisor is asking - they have a client who started a simple IRA July 1.  The payroll company says compensation for the full year is counted.  So that if the person contributes 6% from July through Dec they will end up at 3% deferral for the full year and get 3% match on their full year pay rather than 3% on their pay from July through Dec.    I figured the reason the IRS imposed the Oct 1 set-up deadline was to make sure employees got the 3% match for at least 3 months since the owner could make the max deferral within those three months.   The payroll company disagrees with that apparently.

Comments?  Thank you.

I posted here about this matter earlier, but there have been more developments.

Here is the original post:  

In short, the Participant kept disputing the Order, but was unable to provide anything that would prevent the Order from being a QDRO and processed.  We had a valid, court-certified order and we began the procedures for processing it.

Now, the Participant has started a claim for benefits under the Claims Procedures of the 401(k) Plan.  Accordingly, we are putting on hold making any payments to the Alternate Payee.  Is this the appropriate move?  We are legally obligated to follow the Claims Procedures, but those take time.  The Order does not provide for any earnings/losses on the amount awarded to the Alternate Payee, so the delay is actually costing the AP money (although, maybe not, given the market).

Should we exhaust the Claims Procedures before we process the QDRO?

Hi

DB/DC combo plan.

Termination of DB is a possibility (PBGC covered). Assume freeze date 7/31/2022 (small enough for 15 day rule) and assume termination date 9/30/2022. Distribution for the DB may or may not happen by 12/31/2022, possibly spills into 2023 as the rates seem to be getting better for 417e.

DC has 401k/SH/PS options.

What salaries should be used to determine the DC SH and PS portions as well as combo testing?

Thank you

Good morning, 

Is anyone else having any trouble getting in touch with Datair?  We do not seem to be able to raise them via any normal means - email, phone, etc. and we were wondering if anyone else is having trouble.

Thank you!

I hope BenefitsLink neighbors will help me with an unscientific survey. Any results will be used only for a research project. And I’ll use responses only anonymously and in the aggregate.

What percentage of your work time is used in a proceeding that requires you to file a Form 2848 or other notice of an appearance before the IRS?

(For example, my estimate for 2006-2021 is about 3/100 of one percent. That is, about 99.97 of my work time did not involve defending an IRS examination or presenting a request for a ruling or determination.)

What is your estimate of the percentage of people who regularly provide advice about retirement plans who have never filed a Form 2848 or other notice of an appearance before the IRS?

Hi. Our prior retirement plan provider (VALIC) sent us two small checks (one for $1 and another for $17) stating that they charged the wrong interest rate on escrow amounts held under the contracts which were securing outstanding loan amounts under the plan. Thus, they are refunding for the participants that were affected. Does anyone have guidance on what to do with these checks? There is no indication about who these relate to.

I've done this before but it was not during a restatement year.  A small plan (husband, wife, 1 employee), husband and wife are divorcing.  Can I simply prepare the Cycle 3 restatement docs and take her off as a trustee?  Or does she need to formally acknowledge and agree to no longer be a trustee in amendment form in addition to the restatement?

Thanks

One of the requirements to be able pass coverage using the Average Benefits Percentage Test is to have a reasonable classification.

We have a cross-tested profit sharing plan that does not pass 410(b) 67%.

In terms of the allocation, the plan indicates that each participant is in his/her own group. Does that by itself mean that the plan does not have a reasonable classification and therefore cannot use the average benefits percentage test?

Thanks!

Client sponsors a safe harbor non elective and wants to add voluntary contribution to their accounts but no NHCEs will be making voluntary contribs.  Plan ill need ADP testing, that is a given.

With voluntary contribution made only for HCEs, will need ACP test which obviously will fail w/o  QMAC. If 3% QMAC for all employees will pass ACP, is a flat % of comp allowed?

Client understands the elective contributions will be subject to ADP testing.

Can plan have ADP as well as ACP testing each year??

Suppose the following:

A 401(k) safe harbor retirement plan covers two related companies - Company A and Company B.  Employee has ownership in both Company A and Company B.

Employee has wages of $30,000 in Company A and defers the maximum pre-tax deferral to the retirement plan.  Company A matches those wages up to 4% for a match of $1,200 ($30,000 x 4%).

Employee also has wages of $100,000 in Company B.  No employee deferrals here since those were already maxed in Company A.

Do the wages get aggregated since the Companies operate one plan such that the wages in Company B should also be matched?  Does Company B owe a match to Employee of $100,000 x 4% = $4,000?

A reference to authoritative literature on this would be helpful.  I have searched with different terminology but have not found what I need.  Thanks.