Good morning

SECURE Act allows pension plans to be set up in 2021 for 2020.

If a corporation, though can set up a 401k/PS plan for 2020 in 2021, the deferral option has to start in 2021 and after the plan is executed.

How about for a sole-proprietor and/or partnership where there are no employees?

Thank you,

My title may not clear, but the situation is thus. I have a situation with a DB covering 2 participants and a corresponding DC Plan. Both plans were terminated in 2019 and distributions due to be completed in 2020. In the DB 415 lump sums were paid to the 2 participants. But  on July 1, 2020 the custodian of the investments transferred $4000 from one of the DB  accounts to one of the 401(k) accounts.  The oversight was discovered Jan 15th and we are trying to correct it. 

Under the regulations for correcting plan defects it tell us to make a correction that would put in the plan(s) in the same situation has the error not occurred. So for the DB Plan, we need to transfer $4000 from the DC Plan back to the DB Plan. We can also calculate the lost earnings on the $4000 for the months in was not in the DB trust. So if the earnings rate in the DB plan was 6% for the year of 2020, an amount equal to 6% x 50% x$4000 =$120 would also have to be deposited back to the DB plan. 

What I don't understand is where must the $120 come from? Can the company make a $120 corporate deposit into the DB Plan to complete the correction for the DB Plan? Then there is the issue of the DC Plan, since it also has an operational defect since it accepted $4,000 it wasn't entitled to receive. Let's say the DC Plan earned 13% for 2020 on the $4000 deposit so it earned 13% x 50% x $4000 or $260.00. Who is the $260 paid to? Can the DC Plan pay the $120 back to the DB Plan and keep the rest? What if the DC Plan had a loss for 2020-- would it return $4,000 less the allocable loss and then have the corporation pay the balance.  I  can't find a good example how to fix this problem. Any insight would be appreciated!

I had an original QDRO filed in Denton County at the 211 District Court on June 20th, 2011. It was for a pension plan distribution to my ex spouse as part of the divorce settlement.

When I turned 65 (I'm now 66), my pension plan administrator required that I start receiving benefits. Due to the wording of the pension documents for my former employer, I now have to amend the original QDRO since I retired and remarried. My benefit payment has also been reduced starting in Dec. 2020 to meet the terms of the original QDRO.

 I have submiitted the correct form work to my pension plan administrator for review and approval.  I now need to know the logistics and forms needed to resubmit the revised QDRO to a judge in the 211 District for his/her signature.

Since I'm now on a fiixed income, I'm unable to hire an attorney to make these changes.  Please advise how I can do this myself.

One of our carriers inadvertently sent us a file for another client of theirs.  We sent an internal email to all those who received the email by mistake notifying them that it was sent to them in error and requested a response back that the email had been deleted.  We also notified the carrier and informed them of the same.  The carrier is now requesting that we sign a certification that we in fact deleted the email and did not view it.  Are we under any sort of an obligation to sign this certification?  We notified them of their error and confirmed via email that we deleted the file and did not keep it, but they have said that isn't sufficient, they need a certification signed by us.  This just seems a bit overboard.

We took over a cash balance plan that is a c-corp but they have a large group of doctor/owners.  Historically the doctors review their plan annually and request an amendment to adjust of the doctor's contribution credits.  Our actuary is concerned that this  series or pattern of amendments changing the benefit structure violates the definitely determinable benefit rule. He feels the plan should only be amended every 3-4 years.   The other concern is that these desired allocations could be construed as a CODA and will exceed the 402g limit.  Since the previous actuary allowed it and we have some other plans that amend to adjust their contribution credits (albeit not as frequently) I'd like to get more opinions on it.  Thanks!

I have been reading the other threads and trying to apply my situation but I want to be certain so I apologize if this overlaps.  I have a solo company, landscape company.  It's an S Corp. Takeover plan, CPA has been allowing the owners to withhold after year end stating they have until 4/15 but then going back and adjusting their W-2's.  From what I have researched, if it's S Corp, they have to take the withholding from their reasonable compensation by 12/31.  Am I correct?

It’s been five years since I retired and I’m pleased to admit that I have forgotten everything pension except the friends I made as a result of BenefitsLink.

That special rule for missed deferral opportunity in an auto enrollment plan was set to expire 12/31/2020.  Does anyone know if the IRS extended it somewhere along the way?

Would this be an acceptable formula for SH QACA Match: 200% on first 1% and 50% on next 5%. 

What is the tax reporting on an excess pre-tax deferral that happened in a 401(k) for calendar year and plan year 2019, but was distributed in April of 2020 from a rollover IRA account? 

Plan trustee sends a corrected 2019 1099-R in April 2020 with the lower/corrected amount. For example, $40,000, but excess was $10,000, so the corrected 1099-R shows $30,000 on the corrected 2019 1099-R. The IRA custodian reports a 2020 1099-R with a code 1, so the funds are subject to an early distribution penalty as participant is under 59.5?

Any help to explain how the plan should have reported and participants should have handled with 2019/2020 ind taxes is much appreciated.

I used to have a chart that listed a bunch or retirement plans and which could be had in the same year and which couldn't

Anyone have anything like that?  I've been looking through everything I have and cannot seen to locate it.

We have a NQDC plan and the Plan Sponsor wants to terminate it since no employees are funding to it any further. There is one participant remaining with contributions invested in an annuity. Participant doesn't want to take a distribution so there is no request to accelerate pay out. Can the plan be terminated with an account balance remaining in the plan, or must the assets be distributed upon plan termination? If so, would the suggestion be just to freeze the plan rather than terminate it?
 

I'm seeking to convert a Traditional IRA to Roth IRA (backdoor Roth).  All of the contributions to the Traditional IRA were non-deductible due to income limits EXCEPT that it includes a loan offset rollover contribution (401k loan taken out, laid off, did a loan-offset rollover for the loan amount into the IRA).

Is the loan offset rollover amount "deductible" or "nondeductible" for conversion purposes?  Trying to calculate the pro-rata taxable amount since the account now includes investment gains that would be taxable, but don't know how to classify that loan offset contribution. 

Thank you for any thoughts you have.

Hi

Client asked for a loan from the DB plan last December. Sent the paperwork with all instructions.

Client signed the form but did not get the spousal consent nor the spousal consent was notarized.

Client took the loan out from the DB plan in December.

What is the corrective method for this, if any?

Thank you

Hi

Dealing with an overfunded defined benefit plan (DBP). Plan covers only the owner and spouse and not covered by PBGC.

Client asked me if he can pay the following fees from plans assets:

1. He has an independent contractor (IC) working for him on a personal level (family related matters) however sometimes helps gathering annual data for the DBP. The IC is always paid from personal funds. Client wants to know if the fees related to the time spent on the plan related issues can be paid from the plan. 

2. The client's CPA for the sponsor also does help with plan related issues and client wants to know if time spent on plan related issues can be paid from the plan's assets to the CPA directly from the plan.

3. Client, as the trustee, wants to get paid from plan assets for his services to the plan as investment advisor. Per my research, possibly not doable but I may have missed something here.

I am sure there are some questions I am asking/thinking of.

Your comments are appreciated.

Thank you

We have a participant in a 401k plan who is 74 years of age and was terminated in 2020. He will be subject to the RMD in 2021 and he wants to rollover the entire balance to an IRA. He also has a Loan Balance, which will have to be offset. Can the offset be used to satisfy the RMD requirement?

Thanks!

Some publications indicate that the DCFSA limit of $5,000 for 2021 needs to be adjusted for any rollover amounts from 2020 (i.e., if P rolls over $2,000 from 2020 DCFSA, their 2021 DCFSA election cannot exceed $3,000). Does anyone agree with this? Thanks in advance.

Can we set focus to first unread rather than top of topic?

Non-governmental 457(b) plan permits make-up contributions within the 3 years prior to Normal Retirement Age (age 65).

Participant is age 64 as of 12/31/2020 and his prior year contributions have been as follows:

For 2020, the last year in which the participant is eligible for make-up contributions, is his max make-up contribution $2,000 (the sum of the unused limits)? Or, is it $11,500, the sum of unused limits from 2013 - 2016? 

Basically, do I reduce the $11,500 each year in which he made make-up contributions? I think so, but just looking for confirmation.

This is kind of an off-shoot of another question I had earlier...

For the many plans that have a YOS requirement (or some other hours... but mainly YOS, I suspect), there might be an issue where employees who were otherwise expected to be working enough hours to meet eligibility had their hours reduced due to COVID (layoffs, etc.) and now didn't meet that threshold in whatever eligibility computation period you're looking at that covers 2020.  These people just... don't become eligible yet, right?  Nowhere in any of the regulations or relief was there anything like they get additional credit for some number of hours for purposes of X, Y, and Z including retirement plan eligibility, was there?

Not that I'm expecting that people who were out of work for months to be putting retirement savings at the forefront of their financial decisions, but this also likely affects eligibility for safe harbor and other employer contributions, so they're going to be a year behind (in the best-case scenario) for those contributions.