Participant requested a distribution from a terminated plan.  She actually came in and picked up the check. Withholding was properly taken and submitted.

Her check was never cashed. 

And she cannot be located.

(and the Trustee took it upon herself to stop the check)

What to do now?

Can they open up an IRA with after-tax basis with these funds?

Question: is the following loan in default or still within a correction period?

Participant took a loan in 4th Quarter 2020 and repayments were to commence via payroll withholding, 1st payment late December 2020, 5 Year repayment.

Assuming this Participant is a Qualified Individual under CARES, loan repayments could be delayed until January 2021 at which point the loan balance plus interest could be re-amortized for a new 5 years. To date, the Participant has not made any loan repayments.  Under this scenario is the cure period June 30 2021, for at least all missed loan payments January 2021 through March 31, 2021?

Thank you.

I have client with a solo-DB (husband and wife) that is overfunded by about $500k.  They contributed the maximum deductible against recommendations and investments were aggressive (again, against advice) and returned about 15% a year.  They also have a solo-401(k) plan - the plan I administer.  Both are in their mid-40's so nowhere near retirement but they are at a point where they finally understand they can no longer make contributions to the DB.

Can they:

1) Rollover their DB benefits to their 401(k) and transfer the excess in the DB plan to an escrow account in the 401(k) (without excise tax) to fund employer contributions until they are exhausted?

2) Then, in a couple of years, can they start-up a new DB plan?

Hi to All,

We have a plan drawn up by a local ERISA attorney that is a tribal non-ERISA 401(k) plan.  One of the participants routinely exceeds the 402(g) limit by about $1,300 each year. We bring it to the attention of the plan administrator and ask them politely to please monitor this carefully and stop doing it, but we are ignored.

If this was a regular corporate 401(k) plan of any of our other clients covered by ERISA, we would get in touch immediately upon the discovery of the error and let them know that the excess plus earnings has to be removed.  We haven't done that so far with this client because they are a tribal entity, the plan isn't covered by ERISA, and we don't know to what extent they have to follow the rules.

Does anyone else have any experience with this or insight as to how to handle it?

Thank you as always.

Got a client, sole prop filing a K-1 as a 100% partner.  (Had a partner through 2019, that guy's gone/paid etc.)  Sponsors CB and 401k.

K-1 shows about 74,000.  Cash balance credit is a flat 150,000, but he's done enough cushioning in prior years that his MRC is only around 46,000.  Max is hundreds of thousands higher, and he's not near his 415 limit (this is first year I've seen in five where he's been below 401a17 in Earned Income).

Sponsor says he'd like to deduct 100,000.

Obviously that exceeds his Earned Income so I'd think this is a nondeductible contribution.  But he could make a 4972(c)(7) election to not owe any sort of excise tax.

I guess the thing I need clarification on is, what stops him from looking at his overall income for the year (taxable investments, perhaps) and use that as something to deduct the remaining 26k of the 100k against....

I suppose it might have to do with the fact that the other income is passive and therefore any claim for a deduction against THAT income isn't an ordinary 162 expense of the business.

Am I close, crazy, or somewhere in between?

Thanks!

-bri

My employer began offering after tax elections in January of this year. Starting with my paycheck dated Jan 22 I made large after tax contributions on every paycheck. None of these amounts have been credited in my 401k account (although they were deducted from my pay) and they currently total over 13k. In addition I was terminated from my job on Friday. What penalties would my employer be subject to? Also would the unpaid amounts count as unpaid wages?

Plan is designed as safe harbor 3% non-elective to NHCEs only.  Appears that employer would like to add the HCEs now with a Mid-Year change.

I'm pretty confident this is doable.

But, because of the timing of the change, I think this requires a 4% safe harbor non-elective to both the NHCE and HCE?

Am I correct?

Thanks

Many years ago (2007) I purchased a 409A Basic Plan Document and Adoption Agreement from SunGard. 

Does anyone know whether there are any other reliable vendors out there for these documents?

I'm pretty sure I'm right on this, but someone was arguing with me so I wanted to confirm:

Plan amended eligibility to be 21 & 1 with Quarterly Entry Dates as of 01/01/21

Who does that impact?  If someone was hired in 2020, but had not yet gained eligibility, is their eligibility decided by the old rule (21 & 1 with Immediate Entry) or the new rule (where they'd have to wait to the start of the quarter)?

Thanks!

I am looking to retire soon, I am 63.  However I ran into the following problem, the waiting period for final distribution of my 401K.

per the web site reads.

Your plan sponsor requires a waiting period of 999 days, after leaving employment, before you can request a transaction. This time may be used to provide important information to (deleted name of plan administrator that we have been with for 24 years) and to deposit the final contributions into your account. Your personal options may change based on information provided by your plan sponsor.

This seems excessive to me, that is 2-3/4 years!

I cannot prove this but I do not believe it was published in the past. I believe that it said something to the effect, that my plan sponser has certain requirement that must be met.

Going through all of my hard copy paperwork for my 401K there is nothing concerning a waiting period for final distribution.

 My plan sponsor (employer) tells me that he does not know about this and he will set up a meeting with the companies accountants for an explanation sometime in June or July

Who determines the 999 days. 

I really need to get this changed. Anything will be helpful.

Hello,

Is it possible to charge administration expenses to a fully-insured H&W plan?  We are updating the plan docs and SPDs which is an administrative expense thus this question.

Thank you,

Good afternoon to all,

Company A owns 100% of company B. A person works at both Company A and Company B and owns 20% of Company A. Would this participant be considered an owner of Company B for HCE determination purposes?

Thank you.

Let's say a company that qualifies as an ALE simply did not provide health insurance to all FTEs from 2015-2018. Just didn't do it. Company just received ESRP assessment (total $ in the low 6 figures) for 2018. We are assuming that the IRS will look at prior years. If IRS assesses similar penalties for those years, it will put the client out of business. 

Will the IRS negotiate the amount of the penalty when the issue is NOT whether it was calculated correctly?

Any thoughts on talking to IRS to get a settlement for all years of liability and not just 2018?

Any other ideas or tips? 

Thanks!!!

One of the 401 (a) is terminating and its have a MPPP through the plan sponsor had opted for annuity they never purchased an annuity and now the plan is terminating.  I believe the plan sponsor needs to provide annuity only for those who elect however since this plan sponsor has opted for Annuity and has not purchased an Annuity, will the client need to first purchase annuity for everyone who will elect for annuity and then proceed with the Plan termination? Also In case of the Non-responsive participants can the plan sponsor do a force out without purchasing an Annuity?

Deleted. 

I just got a call from the plan sponsor's controller.  The company was purchased by an Investment Group.  the current owner is retiring.  It is my understanding that they bought the stock and not just company assets.  the company has sponsored a 401k for many years, and is a large audited plan.  The corporate attorney sent an email to the controller saying ' the sale is final today - notify payroll and the TPA to shut the plan down today."    Geez - apparently no thought was given to the 401k during the sale negotiations.    I got the impression that the Investment group will not be sponsoring a 401k but I don't know why they would want to terminate this benefit for 100's of employees.  Anyway, I am not an attorney, but need some guidance.   It is my understanding that whenever a plan terminates, there must be notices sent out (like 30 days?) and the plan amended to current law.   I assume the new company (investment group) has the right to terminate the plan, but I don't think they can just shut it down as of today.   Thoughts and advice from you who have dealt with this type of mess/opportunity before.  Thanks for any insight.

Has anyone successfully uploaded PBGC Forms after the update on PBGC's website.  We can log onto the site with no issues.  We can even see all our Plans via "List Plans".  However, when we select "Upload Filings" the Schema Validation - Select XML File button does not appear.  

We sent an inquiry to PBGC and they think it is a problem with our web browser.  We have logged onto the PBGC site using Internet Explorer, Google Chrome, Microsoft Edge and Fire Fox and we have the same issue with every one.   

If anyone has had success what web browser are you using?

Thanks,

1.  It's my understanding company cannot have both SEP and 401(k) plan in same year (defined for this question as calendar year).

If no contribution has been made for current year in the SEP, can it be terminated as of end of last year and the 401(k) plan then started mid year? Or would the 401(k) have to wait until the next year?

Understood that the PS plan can start up this year since last SEP contribution was for last year.

2. As we know, under SECURE Act, plans can now be started up prior to tax returns filed the next year.  Is there any kind of exception here where an SEP has not been terminated yet, but no contribution has been made for the prior year, so that the PS plan can actually start up and be effective for the prior year?  Otherwise, this provision doesn't particularly benefit employers with SEPs.