Does anyone know if a 401(k) participant that accumulated shares of company stock prior to the company going public can use NUA?

The company is now public. However the shares were accumulated while the company was private.

Participant has since retired and would now like to use NUA 

Thank you

Anyone else seeing the recent letter from the IRS that the 2019 extension request was approved?  Hearing from many of our clients and we actually received a letter today for our own plan!  anybody know what gives??

If a company misses a few matching contributions for one participant (who is NHCE), back in 2019 and it's now more than 12 months after the end of the plan year, what would be the correction method? The participant was able to contribute deferrals for those periods, but just wasn't matched.

Would you simply fund the matching contribution to the participant? If so, would you adjust for any potential gains during the period?

Thanks,

The SECURE Act changed RMDs for nonspouse beneficiaries to the 10 year rule, unless you're an eligible designated beneficiary (EDB). Other than a spouse, that's someone who is a minor child, disabled, chronically ill, or an individual not more than 10 years younger than the participant. We interpreted the last one to be someone younger, but not by more than 10 years. A client interprets that to also include any nonspouse beneficary who is older than the participant because they are 'not more than 10 years younger'. That would mean the 10 year rule only applies to a nonspouse more than 10 years younger than the participant (not including minor children). How have others interpreted this?

Final 5500 EZ form was filed some time ago.  I may be moving to a new place, which is different from the address used on the final 5500 EZ form submitted. Is it necessary to inform IRS of the address change?

My question has to do with how the partial termination rules apply following a plan merger.  Buyer is acquiring seller.  Some of seller's employees will be let go -- some in 2021 and likely more in 2022.  Seller's 401(k) will be maintained for the balance of 2021 and then merged into buyer's effective 1/1/2022.  So some of the terminations will happen while seller's plan is free-standing and others will happen after the plans are merged.  Question is, assuming there would otherwise be a need to assess whether there has been a partial termination by aggregating terminations across the 2 plan years, does the plan merger help prevent a partial termination in a some way?  Is there an argument that the seller's plan goes away when it is merged so you don't have to consider the 2022 terminations at all?  Or, if not, does the plan merger at least make the 20% threshold harder to hit because the denominator grows when the plans are merged?  Would appreciate your thoughts.

Hi

New plan was signed/adopted by 12/31/2020, sponsored by sole-proprietor aka husband. Now they want to add another sole-proprietor aka wife for 2020 as an adopting employer.

Can this be done retroactively?

Thanks

Before 2020, partnership A maintained a single-employer individual-account retirement plan for its employees (including those of its partners who are deemed employees).

In 2020, partnership A amended its plan to allow participation by partnership B (for those of its partners who are deemed employees and for employees, if any).

Partnership B is a new-formation startup.  There is no transfer of assets or liabilities from a plan of B into A’s plan.

The two partnerships—while separate artificial persons—are a § 414(m) affiliated service group.

The plan’s governing documents specify partnership A as the plan’s sponsor, administrator, and trustee.  The documents admit partnership B as a participating employer.

Is there anything in Form 5500 that calls for reporting the Employer Identification Number of partnership B?

Partnership sponsors safe-harbor 401(k) plan -- non-elective 3% Employer contribution. Partnership is dissolving effective 02/28/2021. What is the maximum amount that can be contributed to the Plan for a partner for 2021?  Is the answer simply the pro-rated 415(c) limit (i.e., $58,000 x 2/12 = $9,667) plus $6,500 catch up if age 50 or older?  Total = $16,167 (assuming partner's Earned Income for the 2-month short plan year is at least $16,167).

Does the Plan termination date necessarily have to be 02/28/2021? Although the partnership will dissolve on 02/28/2021, the partnership will still exist in some form after that date to collect account receivables, pay bills, etc. 

Background:

A 401(k) plan had a safe harbor match provision with a 1 year (1,000) eligibility requirement when it was established in 2014. It has been TH for all year including the 2014 plan year.

There was a one time eligibility requirement waiver amendments in 2016. Because of the eligibility waiver, an existing employee (EE1) who works under 500 hours each year entered into the plan in 2016. However, this employee never deferred any 401(k) money to receive any safe harbor match.

The plan was amended in 2018 changing the safe harbor match to 3% safe harbor non-elective when the employer established a Defined Benefit plan in addition to this existing 401(k) plan. The eligibility requirement stayed the same (1 year of service) with 3% safe harbor non-elective allocation requirement of 1,000 hours during the plan year. the The aggregate plan has been TH for all plan years.

Question

Is this safe to assume the 401(k) plan was exempt from TH from 2014 through 2017 if the only contribution were deferrals and safe harbor match regardless of the one active employee who never deferred didn't receive any matching contribution?

Is this also safe to assume the aggregate plan is not exempt from TH starting the 2018 plan year because of the DB accruals?

If so, do I have to determine the plan TH status as of 12/31/2017 while the plan had deferral and safe harbor match contributions only (assuming calendar year plan) for the plan year beginning 1/1/2018 and provide TH min for EE1 for 2018 plan year and there after?

Or, do I have to determine the plan TH status as of 12/31/2018 as the aggregate plan had additional contribution besides deferral and 3% safe harbor non-elective (DB accrual) for the plan year beginning 1/1/2019 and provide TH min for EE1 for 2019 plan year and there after?

My biggest confusion is when should the TH min should start 2018 or 2019?

Suppose an employer had a 3% safe harbor nonelective 401(k) plan in 2020 with pro-rata profit sharing. In 2021 they adopt a scond plan, a new PS plan, retroactively to 1-1-2020 and it has each person in their own rate group. Can this new plan offset the minimum gateway by the 3% safe harbor nonelective provided to those same participants in the 401(k) plan?

Hi

Looking for advice for the scenario below:

I have an participant who is requesting a medical hardship and submitted a bill/invoice dated August 2, 2012 listing an amount due but no due date.     What is the acceptable timeline for this type of supporting documentation?    I thought only bills could be submitted for a 6 month time period or future medical treatment that is not covered or reimbursed by insurance.   Currently, I have required the participant to provide a current letter from the hospital stating the amount owed, due date, and confirmation that no further payments were or are being made to this invoice.

Any advice would be greatly appreciated.

Thanks

An employer wants to pay for all the participant related fees, so that no fees are taken from employee account balances.  However, they do NOT want to pay for the participant fees once the employee leaves employment and becomes a former employee.  If the employee fails to roll out the 401k account balance, the fees will be taken from their account.  

Anyone see any issues with this?  Is there guidance / best practices around this?

Plan uses a common record-keeper/custodian that also processes participant loans online. Principal. 

The plan assets consist of only deferrals and safe harbor match(100% vested, not QACA). The plan's loan policy restricts the loan proceeds source to just deferrals. Well, I suppose that's how my interpretation has always been of this particular policy language.

"Source of Loan. Participant loans are may be made from all available contribution sources, to the extent vested unless designated otherwise under this section." 

For this plan it is designated otherwise and specifies that only Pre-tax Deferrals and Roth Deferrals are eligible. 

John Doe participant has the same amount of $ in deferrals and SH match. The record-keeper is unable / refuses to process a loan for 50% of the participant's vested balance (essentially 100% of the deferral balance). They are insisting the only way it is possible would be for the plan to amend it's loan policy to allow loan the loan to be take from all sources. 

I disagree. Loan source restrictions on proceeds are common, for a variety of reasons, I see it done a number of different ways. What I don't usually see (maybe have never seen) is a source restriction on the 50% max value part of the calculation. I don't even think that is allowed, but I'm not able to find a citation. I remember the days when sponsors had two plans, a money purchase, and a separate 401(k) PS, and we would aggregate the balances between plans for the 50% calc, even though the loan was only allowed from the 401(k) plan. 

Am I wrong? 

If I'm right, does anyone have suggestions for pushback to the provider? Citations? 

I am working with a doctors office and their 401k plan.  They currently have a One year of service/1000 hours eligibility requirement to enter the plan.  However, they would like to change that to 6 months elapsed time requirement for new doctor hires.  The new doctors would not be owners.

If the new doctors make less than $130,000 (2021) and are not HCEs in their first year employment, then there would not be a discrimination issue for 2021, is that correct?

What if in future years their earnings are above the HCE dollar threshold?  Is that something that could be viewed as discriminatory a year or 2 after they are hired?  I would not think so since I think any eligibility discrimination would be applied in the year of hire.  But I wanted to check if that is correct?

Thank you

401(k) Plan terminates a/o 12/31/20.  Two payrolls are receivable a/o 12/31 and hit the participant's individual brokerage accounts in January.  This is a partnership with Safe Harbor 3% NEC, so partners' shares and 3% amount are TBD.  All rollovers/distributions are in process with a hopeful close-out date of 2/28/21.

I don't think I can do a Final Return for 2020 showing "liabilities" to zero out the ending account balances, especially when partners' final number is unknown.  I think the final is a 2021 Form 5500.

Anyone disagree?

Active employee is being told that she must take a 17 year retro payment of her CB Plan because she was earning more on her Interest in the plan than she had made in her best 3 years that ended in 2004.  IRC 415 was mentioned in this case.  She is well past retirement age because of being covered under the old workers comp rules from the 80's.  They are offering her a Single Annuity option of much more money than is being offered as a Lump Sum payment due to her not receiving payments since 2004, along with interest and penalties I believe.  If she takes the Single Annuity option she will continue to receive a monthly annuity for life along with this retro payment.  All 10,15, and 20 year options would have to be started as though it was 2004.   What options do I have with this retro payment?  Can any of it be rolled into a Traditional or Roth IRA?

I have a DC plan terminating at end of its current fiscal year in June 2021. Any thoughts as to whether it needs to be restated before terminating? I am thinking that it may need to be.

Hi, 

Is SAR sent to anyone who had balance in the plan that fiscal year or to everyone in the plan, however do we determine who should be receiving the SAR. 

So, plan termination date is 9/30/2020. They will now be restating to the new Cycle 3 document, to keep everything clean. What date would you use as the restatement date? 9/30/2020? Other? I'm not really sure on this. Ultimately may not matter that much...