New plan being set up. The EIN request was submitted and granted with an old address.

Having never been used yet, is it a big deal to just forget the first EIN and get a new one?

Or file form 8822b to correct the address?

A plan sponsor from time to time rehires employees - sometimes several months, sometimes 3 or 4 years after being terminated.  These employees occasionally were participating in their 401(k) plan prior to their termination and are deemed to be participants immediately when rehired in almost all circumstances, according to the plan document.  The sponsor has asked whether it would be possible to force such rehires to meet the eligibility requirements all over again after they are rehired if they were previously terminated at least a year before their rehire date - I'm thinking it's probably impermissible to do this.  They're currently using an FT William doc coded for the basic rule of parity provision, however, the program allows for modifications as an open entry item, i.e., anything at all can be written in to customize this provision, and the question of whether amending the plan to use this open entry item to enforce the one year restriction mentioned above arose.  Is it legal to force requalification for such rehires after being away only one year?   

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A cash balance plan had a fresh start effective 01/01/2023 when it had the Cycle 3 restatement. The owner (a physician) wants to know if s/he could do another fresh start to increase the benefit formula in order to increase the tax-deductible limit.

Can this be done right away or should s/he wait/? if s/he needs to wait, how long?

I have an overfunded DB plan.

Distributions will be made in October.  Two Participants are over 73 and are required to take RMD.

If all participants choose a lump sum distribution, are the excess assets allocated to the PVAB minus the value of the RMD, or are the excess assets allocated to each participant's PVAB?

In the second case, the over 73 participants would receive a larger share of excess assets.

No 5558 was filed for a calendar year plan.

Their corporate taxes were extended and are due 9/15.

I've never had a calendar year plan 5500 due on 9/15 but it would seem like that fits the definition of the Automatic Extension?

Hi

A general question as researching it.

Have you ever switched from a BOY to an EOY val? I am aware of the other way around with automatic approval.

If you have, can you share how managed it, if possible?

Thanks

We have a transaction where a disqualified individual under 280G is getting stock options from the buyer.  These will be granted contingent on the change in control, but they will not begin to vest until a year after the closing, and then only monthly over several years.  

I understand that they are granted contingent on the change in control, but does the fact that they are unvested, and won't even begin to vest for a year, make a difference?

An individual has 100% ownership of two separate companies company A and company B. With having a brother-sister control group. 

My question(s) are:

1. Is it safe to assume this individual can sponsor two individual SIMPLE IRA plans, one for each company and be considered compliant with control group rules?

2. Would it not be acceptable to sponsor a SIMPLE IRA at one and a SEP IRA in the other?

3. Would it not be acceptable to sponsor a SIMPLE IRA at one and a 401(k) PS in the other?

Thank you. 

Imagine the responsible fiduciary of an individual-account retirement plan with participant-directed investment decides to use a set of target-year funds for the plan’s qualified default investment alternative.

Each of those funds describes its investment strategy with this: “The fund invests according to an asset-allocation strategy designed for investors planning to retire and leave the workforce in or within a few years of 20yy (the target year).”

How should a fiduciary select the age at which a default-invested participant is assumed to leave the workforce?

60? 62? 65? 67? 70? 73?

Assume the fiduciary does not know when the plan’s participants leave the workforce because almost all people who leave the employer go to work for another employer.

If the fiduciary knows that the plan’s participants all are knowledge workers, does that suggest anything about what leaving-work age the fiduciary ought to assume?

Whatever else a fiduciary might consider, is there some advantage to falling in with a recordkeeper’s norm?

Do recordkeepers have a norm?

Am I imagining a choice a plan’s fiduciary doesn’t practically have because a recordkeeper will require its customer to use the recordkeeper’s regime for sorting default-invested participants?

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Pre-approved plan document. Safe harbor nonelective. Eligibility is a checkbox which is for BOTH deferral and safe harbor. Per diem employees excluded.

NHC per diem was allowed to defer.

For correction, if it was under VCP, I'd comfortable at least ASKING to retroactively amend to allow the deferrals only, even though the IRS might reject it. But for self-correction, I don't see it as a valid choice - you are retroactively amending and waiving the exclusion, and therefore I think it has to be the full Monty. Any thoughts?

Only one NHC, and not worth the cost to file VCP anyway. 

Recently took over administration on a plan and discovered there is a participant that passed away in 2020 with an outstanding loan balance that was never offset.  Would you offset the loan current date and issue a 2025 Form 1099-R f to the participant's estate? 

We have a tax client (not a TPA client) who is a participant in her medical K plan and a hospital 403(b) plan.  Turns out her deferrals for 2024 between the plans are $10,000 over the 402(g) limit.  

My understanding has always been (and confirmed by ChatGPT) since not corrected by April 15, the amount is taxable for 2024 and in the year distributed.  But also that it must be distributed and I assume as reasonably soon as discovered.

Someone else here asked CoPilot and it says it does not have to be distributed but is taxable whenever it is. 

Comments?  We all know we need to check AI for correctness.  I have more confidence in this group than AI at this point. 

Thank you,

Tom

I need to have the plan sponsor clarify if they are being acquired through stock purchase or asset purchase.  I believe if asset purchase, employees of the acquired company are considered terminated and the plan can terminate and distribute.

But if corporate merger through stock purchase, my understanding is employees are not considered terminated and that the acquired company plan can either be merged or terminated but 401(k) elective deferrals may not be distributed since there is a successor plan.  I'm questioning if even safe harbor and profit sharing can be distributed since employment has not terminated and thus no distributable event and so perhaps the entire plan must merge into the acquiring company plan.

Your comments are appreciated!

Tom

Hi

Owner only DB plan, wants to terminate and distribute during 2025

Already turned 73 during 2025 i.e. first RMD is due 4/1/2026.

Needs an RMD during 2025 i.e. split the distribution between rollover and RMD?

In a different scenario for the same owner, plan is overfunded but only wants to rollover the full benefit and keep the plan open as will hire others to eat up the overfunding. As this in-service distribution will happen during 2025, is it subject to RMD during 2025 i.e. before the rollover?

Thanks

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414A(b)(4)

An eligible automatic contribution arrangement meets the requirements of this paragraph if amounts contributed pursuant to such arrangement, and for which no investment is elected by the participant, are invested in accordance with the requirements of section 2550.404c-5 of title 29 [ie., a QDIA], Code of Federal Regulations (or any successor regulations).

Are pooled trustee directed plans gone for good?  That's too bad because they were a real cheap way of getting a small 401k plan in place. Participant direction is expensive (investment advice, recordkeeping, etc).

Also what if the pooled plan was invested 50/50?  Isn't a 50/50 option eligible to be used as a QDIA?