Today is the first day of the rest of your life.  It's also the first day after my retirement.  After 43 years of being an actuary, I'm moving on to other things.  It has been a wonderful profession. 

Thanks to Dave Baker and BenefitsLink, and all the contributors here, for helping.   My brain will not atrophy, at least not immediately; I'll be glad to help anyone who needs anything.

Rigby out.

My Ex-Wife and I have mostly identical QDRO documents for each of our pensions.

How can I go about finding out the expected value once I start receiving payments from her pension and also how do I find out if a lump sum distribution option is available.

Will her plan administrator supply that information to me?

Hi

Having a brain freeze as I have not had a low pay out for quite sometime.

Is the relative value disclosure required for a lump sum under 5k (over 1k) and if yes, do I need to show the monthly benefit equivalences?

Thank you

Participant A retired from Company X nearly 10 years ago. He participated in X's defined benefit plan (from which he is currently receiving a pension under a joint and 100% survivor annuity) and 401(k) plan. The pension is equal to $36,000 per year, payable in monthly installments. During 2020, Participant A also received distributions of his remaining account under X's 401(k) plan (which had both Roth and non-Roth portions), rolled over the vast majority of it into traditional and Roth IRAs and later received distributions of the balance from both IRAs. During 2020, A was also laid off by Company G, which is unrelated to Company X. A would like to treat the portion of the 401(k) plan distribution which was not rolled over but otherwise subject to tax as well as the taxable portion of the traditional IRA distribution as a Coronavirus-related distribution and pay the resulting tax over the next 3 years. A would like the pension amount received to be subject to the regular tax rules, which would subject the entire $36,000 to tax during 2020 (otherwise, A would be subject to tax on the pension during 2020 on $12,000, but would have to pay tax on $48,000 ($36,000 + $12,000) in each of 2021 and 2022).

However, "If more than one distribution was made during the year, you must treat all distributions for that year the same way." Form 8915-E Instructions, page 1; IRS Notice 2020-50, Section 1. IRS Notice 2020-50, Section 4.B. ("All coronavirus-related distributions received in a taxable year must be treated consistently (either all distributions must be included in income over a 3-year period or all distributions must be included in income in the current year)."

Seemingly inconsistent with the preceding paragraph are the following: Instructions to Form 8915-E, page 2, "Types of Qualified 2020 Disaster Distributions," "Coronavirus-related Distributions," "you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a coronavirus-related distribution, regardless of why the distribution was made," provided that the aggregated distributions so designated do not exceed $100,000.  Coronavirus-related distributions are permitted without regard to your need;" IRS Notice 2020-50, Section 1.C ("In general, a qualified individual is permitted to designate a distribution described in the preceding paragraph as a coronavirus-related distribution.")

Reviewing the foregoing, I am inclined to conclude that the requirement of consistency referenced in the second paragraph applies solely to determination of whether all Coronavirus-related distributions (as designated by the individual) are taxed ratably over 3-years or taxed in full in the year of distribution. Therefore, A would be permitted to designate only the portion of the 401(k) account that would have been taxable but was not rolled over as well as the taxable IRA distributions as coronavirus-related distributions and not the periodic payments A was receiving from the defined benefit plan. Does anyone have a contrary position on this?

We've administered this non-safe harbor 401k plan for years, and now they are moving to a new asset platform that insist on using their plan document, to which we grudgingly complied.  One of the provisions they say they need to have is a $500 minimum on in-service distributions and hardships... but there wasn't a minimum in the plan before.  That sounds like a cutback in available benefits to me.  Am I reading too far into this?

or maybe it is not an opinion as often times someone here knows something to be bonafide fact. at any rate this plan has last day and 1000 hour for PS allocation. not passing coverage so it says to add those still employed but under 1000 first, then to those with "greatest amount of service during the Plan Year before terminating" and similarly situated employees will be treated the same. so need to add one EE out of those terminated to pass coverage. there are two options

terminated employee A - terminated 09/28/2020 with 200 hours

terminated employee B - terminated 9/15/2020 with 480 hours

which employee from above has the "greatest amount of service"? I could make an argument for A, B or for both being "similarly situated" since service conditions are based on both time and hours. 

thoughts?

Suppose an employer has been filing several 5500 forms - one for each plan - Dental, Disability, whatever. Has not been filing for certain plans due to less than 100 participants - say, Vision plan has only 40 participants.

Now they institute a "wrap" plan. Are they required to include the Vision participants, or can they still exclude them? Do they have the option to include or not include, and still file multiple 5500 forms, or must it be one form? I'd assume they want to file just one form, and must all sub-plans then be included?

Hi,

The client's plan assets were transferred over to the new recordkeeper back in August 2019. For a couple of participants, their money went into the money market account instead of the same funds it was in under the previous recordkeeper.

The person setting up the accounts failed to set up the funds properly when setting up these employees with the new recordkeeper.

These participants are now just realizing 18 months later that their money wasn't invested the way they thought it was.

My question is...how much responsibility do we as the TPA have in so far as making the accounts good earnings-wise? Should not some of that responsibility fall on the participants for not checking for 18 months to make sure their money was invested the way it needed to be?

Thank you!

I have a situation where a company had a 401k plan (less than 5 years ago), terminated the 401k Plan, entered into a PEO-style MEP for a couple years, decided they did not like it and decided to leave the MEP to start up a brand new 401(k) plan.  The owners of the company transferred all their money into the MEP years ago (I'm not certain all the employees did as the original plan termination was likely a distributable event).  All of the employees rolled their balance from the MEP into the new 401k plan (greater than 60% are owner assets).  I'm currently classifying the rollovers into the new 401k plan as Related Rollovers.  The issue I'm grappling with is whether or not the plan is Top Heavy on day one of the new 401k plan.  I'm looking for advice as to how I should treat this.  If I'm leaving out any pertinent details, please let me know.  Thanks in advance!

Assume we want to aggregate two SH 401(k) plans. Both of them provide a matching formula. Plan A's match formula is 100% of first 3% deferred and 50% of the next 2% deferred. Plan B's match formula is 100% of first 3% deferred and 60% of the next 2% deferred. 

SH matching contributions are made to NHCE only. 

Could these plans be aggregated for 410(b) testing? 

I read the Regs as saying yes, because there are no HCE that are getting a SH match. What bothers me is that some NHCE are getting a better match than other NHCE. What is the issue here?

I have a situation where a company had a 401k plan (less than 5 years ago), terminated the 401k Plan, entered into a PEO-style MEP for a couple years, decided they did not like it and decided to leave the MEP to start up a brand new 401(k) plan.  The owners of the company transferred all their money into the MEP years ago (I'm not certain all the employees did as the original plan termination was likely a distributable event).  All of the employees rolled their balance from the MEP into the new 401k plan (greater than 60% are owner assets).  I'm currently classifying the rollovers into the new 401k plan as Related Rollovers.  The issue I'm grappling with is whether or not the plan is Top Heavy on day one of the new 401k plan.  I'm looking for advice as to how I should treat this.  If I'm leaving out any pertinent details, please let me know.  Thanks in advance!

The Keogh owner has died.  We have a qualified Keogh document that needs to be updated and terminated.  Who can sign on behalf of the Plan Administrator/employer?  The Keogh owner was self employed.  The Will names a daughter as Executor, but no Probate Estate was opened, therefore, no recorded Letters of Office.

Plan Sponsor received a check from RBC, payable to the Plan, that was a settlement with the SEC over certain fees involved in a mutual fund.  The check says it is for the benefit of a participant that has long since departed from the employer.   Plan Sponsor has no address for the participant.  How should this be handled?

My Name is Ms. Gloria White. I reside in Houston. Texas and Retired

I was in Pay status, receiving monthly distributions from my separate property annuity, when my spouse filed for divorce.  The divorce was finalized.

I 1/2 year later, he filed a Dro as an Alternate payee on my Retirement Plan.  It was approved but he manipulated the language in the final divorce decree, omitted the valuation date of our marriage and had the Dro signed by a substitute judge.  With the Plans' qualifying approval , he started receiving 1/2 of my monthly distribution.  It was a Defined Benefit of 50% joint and Survivorship.  I did name him as the death beneficiary after my demise.    Not as an Alternate payee!   I was never served and did not sign the QDRO.

Can the Plan or Plan Administrator  be sued for mismanaging the Qdro or does ERISA precludes them from being sued?

 Please answer ASAP today

Ms. Gloria White

I just picked up a 401(k) Plan effective January 1, 2018. The Plan Sponsor has never requested the tax credit for startup costs. As of its effective date forward, it met all of the criteria to receive this credit. How far back, if at all, can the plan request and receive this credit?  

Corporation A and B are a controlled group. They have identical separate plans. Participant is partially vested in Corp A plan, then terminates employment with A and moves to B. Account balance remains in the A plan. 

Since all service with all members of the CG is counted for Years of Service, then as long as participant works for B with 1,000 hours each year, the vesting under the A plan will continue to increase, even though participant is no longer working there. Is there any dispensation that I'm missing that would allow vesting in A plan to remain frozen?

This post is exclusive of anything related to CARES Act.

I feel like I saw some headlines going back to 2019 indicating that loan payment rules were being relaxed, such as longer periods to either pay back to the plan or roll the amount into an IRA, or pay by check once terminated into the plan, but perhaps I dreamed it?  Just curious, has anything to that effect been enacted?

I recently discovered our client is a part of a controlled group (newly established in 2019) and one entity maintains a SIMPLE IRA and the other a 401(k) Plan. Good news, we're still within the exclusive plan transition rule under 408(p). Bad news is we're beyond the 410(b) transition rule. What now? In addition, if the SIMPLE remains and those employees are NOW eligible for the 401(k) plan, does the (k) plan need to be amended to exclude the employees benefitting under the SIMPLE IRA plan or are those employees eligible to participate under both plans if they so desire so long as they don't exceed the 402(b) limit? If the employees could be eligible for both plans, is there a coverage test for the 401(k) plan if all employees are "eligible" under the 401(k) plan? 

Also, just to confirm, I'm right that if the employees previously employed under the entity who sponsored the SIMPLE IRA plan are now working under another entity within the controlled group, such employees must still be eligible for the SIMPLE IRA (contributions coming from an entity who does not sponsor the SIMPLE IRA) as if the plan sponsor of the SIMPLE IRA were still a separate entity, correct?

my dad passed a few months ago, somewhat unexpectedly after a brief but serious illness, so my siblings and I are dealing with the aftermath of not having everything wrapped up in a neat little ribbon.  he had an IRA that was paying him a small monthly installment to cover his annual RMD.  my mom wanted to transfer the IRA to her own and continue getting the monthly installments, but the custodian is telling us there was no beneficiary designation on file (what?  hard to believe my dad didn't do this!) and the only default is to an Estate, and taxable.  why wouldn't it be to a spouse?  I deal mostly with qualified 401k and retirement plan distributions so an IRA is out of my field of expertise.  we continue to search for old documents at the house, but in the meantime am looking for some guidance.  is this normal for an IRA?  it doesn't make sense that mom will have to get an attorney and set up an estate, go thru probate, have to pay taxes (and legal fees!), etc.   thanks!

Notice 2020-52 made it clear last year that safe harbor contributions for HCEs can be suspended mid-year without effecting the plan's safe harbor status (notice required), as contributions made for HCEs are not included in the definition of safe harbor contributions.

Since safe harbor contributions are generally required for the entire plan year, would I be correct that a mid year amendment to include HCEs back in the safe harbor match would not be permitted?  For example, HCEs are amended out of the safe harbor in 2020.  2021 the company begins to recover and would like to add the safe harbor back for the HCEs.  NHCEs were never affected.

Yes, it can be done, retroactive to the beginning of the plan year?  Or, no way, need to wait until next year?

Thanks very much.