Suppose a plan has all non-liquid assets. If a participant selects a lump sum distribution and receives it in the form of non-liquidate investments, is the plan required to withhold 20% federal on the distribution?

Thank you.

When calculating a maximum contribution, the total deferral + ER contribution a participant can receive can not exceed their W2 wages, correct?

Case in point -

Employee earns $28,400. 
Max 25% ER would be $7,100.  
Employee is older than 50 so could defer $26,000
Deferring the 402g limit would result in a $26,600 total contribution (19,500 + 7,100)
Adding the catchup... will she be limited to $1,800? Which would get her total contribution up to $28,400? which is her W2 wages?

In this case her husband is also an employee and earns $103,090.  No problem maxing out there.

If I have a rolloever from tax deferred 403b to Roth IRA, which will be taxed, does it count toward the $129K income limit for contributing to Roth IRA?

When I go to the "Retirement Topics — Required Minimum Distributions (RMDs)" page of the IRS it mentions the new age 72 rule.

However, under "Calculating the required minimum distribution" section, the link to the Uniform Life Table leads to Publication 590-B (2020) and the sub heading says "For use in preparing 2020 Returns"

Can I even find the new tables in the Retirement section of the IRS site?  If so, where?

HI All and Happy New Year!

We have posted the new Surprise Billing Model Notice to the benefits section of our Company intranet along with all of our other H&W compliance Notices and recently provided a link to the Notice to all US employees.

Would this satisfy the “publicly available” requirement?

Much thanks!

Lexy

Newly transferred from the Attorney side of things and don't have a strong grasp on the rule and regulation tendencies. I know a qualified plan can take advantage of private lending as an investment. And I understand that interest income is exempted from UBTI. However, in this case of plan lending to 3rd parties secured by first deeds of trust, while the form of the transaction does not generate UBTI, the volume of transactions will determine whether the plan is involved in an active trade or business. So assume that the volume of annual transactions does push the plan into operating a trade or business, it would follow that any such income earned, even though exempted interest, would be UBIT. Is this the proper assumption or are retirement plans simply afforded a private lending exemption from UBTI? Does the exemption differentiate between lending to participants and lending to third parties?

Wondering if others have run into this situation...have a small 401(k) Plan that terminated.   Checks were issued to all participants in 2021.   As of 12/31/2021, several people did not cash there checks, so assets remain in the Plan.   The Trust therefore does have assets remaining as of 12/31/21.  Thoughts on whether 2021 should be the final Form 5500, or doing an additional 5500 for 2022.

Having late Friday brain freeze

DB/DC combo, non PBGC.

1M payroll, checking for 31% rule i.e. 310k deduction total

If DB portion is 200k, can do 110k of DC, correct?

Even though DC portion exceeds 6%, it does not exceed the 25% overall DC deduction limit.

Anything I am missing?

Thank you 

What if participant who has been taking RMD for several years died in December, 2021 and the 2021 RMD was not taken (by anyone) before the end of the year?

We have been trying to find out if the RMD was taken and the wife had told us he was ill but didn't notify us of his death until just now.

We are seeing an increase in the number of VFCP letters received from the DOL as a result of 5500 reporting of late deferrals.  Is anyone else seeing this increase?  Are you seeing any further DOL activity (investigations) as a result of the letters?  I have read a post from fall of last year on the subject, but am wondering if there are any more recent updates.

Thank you

Not sure if others have had the IRS send their clients penalty notices for late filing under the IDA extension but my clients have received them even though their address is in a covered area. 

Of course the letter states to call the IRS but trying to reach them by phone is impossible, has anyone been successful in faxing a response to IRS?

Must the Plan Administrator provide a copy of the Plan Document (incl Amendments) if a Participant (Active or Terminated) submits a written request for it? And if so, may they charge a reasonable amount for it?

It is understood the Plan Administrator must make the Plan Document along with any Amendments available for inspection at the place of business.

It is also understood the Plan Administrator must provide copies upon written request of the most recent SPD+SMMs, 5500, and the Trust Agreement if requested.

In this instance, the Participant (actually terminated) wants a copy of the Plan Document.  The Participant has the most recent SPD/SMM, therefore it is my understanding the Plan Administrator may charge a "reasonable" fee if the Participant should request an additional copy of the SPD/SMM (maximum $0.25 per page, as set forth in DOL Reg Sec 2520.104b-30).

Thank you.

I don't work with DB plans - All help is appreciated

DB participant died in 2020

Adult son - sole beneficiary

I am being told the son is eligible for lump sum distribution - a IRA rollover is one available option

Question:

Son wants to convert the lump sum to a Roth IRA - For example, the inherited lump sum value is $20k.  He wants to rollover (convert) the $20k directly to an inherited Roth IRA.  I know this is permitted in the DC world (non spouse benefit can converted an inherited account to a Roth IRA) - Does the same rule apply to DB plans?

Assuming a conversion is permitted - Is the son now subject to the SECURE Act' 10-year payout rule?

Thank you

The EEOC and the DOL/IRS/HHS have provided helpful guidance for employers who wish to implement a vaccination incentive (or penalty for unvaccinated) for employees in the form of a health contribution surcharge.

The HIPAA regulators have confirmed that, under HIPAA, an employer must, among quite a few other things, offer an employee for whom it is medically inadvisable to receive a vaccine a "reasonable alternative standard" so that such employee can avoid the surcharge.  The employer can require that the employee provide documentation from his or her physician that receiving the vaccine is indeed medically inadvisable.

Separately, the EEOC has stated that that merely requesting proof of COVID-19 vaccination as a condition of employment is not a "disability-related inquiry" under the ADA.  But, if an employer is administering the vaccine directly or through an agent, certain pre-screening questions constitute a disability-related inquiry subject to the ADA, in which case the incentive or penalty cannot be "coercive."  The EEOC has not stated how much, if any, incentive or penalty would or would not be coercive.

Assume an employer implements a surcharge program where neither it nor its agent is administering the vaccine; employees instead can obtain one through public outlets.  The employer requires a note from the employee's physician if obtaining the vaccine would be medically inadvisable. 

Wouldn't the requirement for the doctor's note be a "disability-related inquiry" under the ADA and thus subject the amount of the surcharge to the undefined "coercive" standard?

Thanks for any thoughts!

I have a client that is thinking of starting a 401k plan. 

Two brothers own 100% of Company A; 50% each. 

The parents (to both brothers) work for the brothers, receive W2 comp, own 0% of company B and want to make 401k contributions to the 401k plan of Company A.

In addition, the parents jointly own 100% of Company B; 50% each and do NOT want to offer a 401k to the employees of company B.  The two sons do not own any of company B and they do not work for Company B.

So the questions is If the parents contribute to the sons 401k plan as employees of company A and do not offer a plan to the employees of Company B is this is an issue? 

Can someone refer me to a reasonably priced TPA to do annual administration (including 5500 form) for a Solo 401K plan? I'm getting quoted prices that are for traditional 401k plans and that makes no sense. Thank you.

We are looking to sell our TPA business and wondering if anyone had a recommendation of a business broker that handles TPA firms, or know of a bulletin board that lists businesses for sale.

We have a participant who terminated service in 2020. He is 75 years old and not a 5% owner (so he didn't have to take any RMDs in the past). I understand that he did not have to take the first RMD for 2020 due to the CARES Act Waiver. However, what is the date by which he had to take the 2021 RMD. Would it be 12/31/2021 or 4/1/2022?

Thanks.

By any chance can someone point me to the language in the Relius Corbel Doc that includes the provision to recognize the service of a temp-to-hire performed under the agency?  i.e., 414(n)(4)(B).  This the provision that says if someone is under the primary direction and control of the recipient, pursuant to an agreement, but does NOT meet the "substantially full time for a year" requirement, we nonetheless need to recognize their service for eligibility and vesting.

I've scoured the document and cannot find it anywhere...  There are a lot of "incorporated by reference" but nothing about this provision.

Non-governmental 457(b) plan - participant becomes eligible in 2021 and is age 62. NRA is age 65. Since participant is within 3 years of NRA, the participant can make a catch-up contribution. 

Since there is no under-utilized amounts from prior years (given that the first year of participation is 2021), is the participant able to make catch-up contributions? Since the catch-up is the lesser of 2X the annual limit or the under-utilized amounts from prior years, what do we use as the  under-utilized amount from prior years to determine the available catch-up?