Does anyone have a count of how many notices, statements, reports, and other disclosure items an individual-account retirement plan furnishes (or ought to have furnished) in a typical year?

Plan has a 4/30 year end.

For the plan year ending 4/30/2019 the ADP test fails, and a catchup eligible participant has a $3000 refund recharacterized as catch (for the 2019 plan year).

The participant had deferred $8600 from 1/1/2019 to 4/30/2019.

The participant then defers the full $16400 from 5/1/2019 to 12/31/2019.  Thus they have deferred the full catchup, and also had ADP refunds recharacterized as catchup.

Am I correct that the $3000 ADP recharacterization is now an excess deferral for 2019?

If so, is the correction to distribute the excess with gain/loss adjustment?  The participant does have an inservice distribution option available under the terms of plan.

Are there any further ramifications since the excess was not distributed by April 15, 2020?

Thank you.

Let's say there is $50 distribution fee charged to participants. Can a participant take out $100,000 (taxable distribution of $99,950 after the distribution fee) or $100,050 (taxable distribution of $100,000 after the fee)?

Thanks!

1. DC plans: have to wait at least 12 months to open a new plan to avoid successor plan issues. (or is it only applicable to 401k plan? Does the 12-months count from plan year end or plan termination date? )

2. DB plans: no waiting period in between. (but rumor says a client has to wait at least two years to open a new DB after terminating the old DB? any special rules or regulations regarding this? )

I'm aware that the IRS recently allowed remote notarizations and witnessing by plan representatives. I'm also aware that witnessing is required for spousal consent of non-QJSA distributions and loans from plans subject to the QJSA rules. What's confusing to me is that the IRS Notice refers to the relief being available to "participant elections, including spousal consent." Are any participant elections subject to the witnessing rule?

Thanks for your help.

We'd wondered how long the IRS is taking during this pandemic to process VCP applications, and thought others might be interested.  Here is data from one of ours:

January 23, 2019     submitted

June 11, 2019          acknowledgement from IRS

April 17, 2019           IRS requests additional information

May 18, 2019            We respond

May 19, 2020            VCP compliance statement (1 year after last contact)

Since FEMA declared a state of emergency for all 50 states due to Covid-19 does this mean that all participants of all 401k plans which allow for hardship withdrawals are eligible to take a hardship withdrawal pursuant to the following hardship withdrawal reason?:

"Expenses incurred on account of a federally declared disaster".

Thank you in advance for your guidance.

Some health insurance carriers are reducing premiums or providing rebates due to lower utilization of medical services so the issue arises whether the employer has to "share" the savings with employees.

My view is that these are essentially an advance payments of Medical Loss Ratio Rebates the insurers would normally be sending later in the year and therefore need to be "shared" with employees as we do with MLRRs.

Anybody taking a contrary position?

Thanks

My apologies if I missed this.

Has there been any rollover relief offered for participants who took their 2020 RMD in January and would like to roll back into the plan (or IRA)? 

I know they missed the 60 day rollover window, and don't fall under the April 1 to July 14 extension to July 15, but was wondering if I missed any further guidance on the January distributions.

Thanks very much.

I'm looking to see how others are handling the following:

The plan sponsor has a 401(k) Plan that provides a match formula equal to of 100% of the first 6% contributed.  The contributions are deposited semi-monthly.  Assuming the HCE has not received the maximum match allocation of $17,100 (6% of $285,000) at the time the compensation reaches the $285,000 limit, would the HCE be entitled to additional match allocations on deferral contributions for compensation earned over the $285,000 limit.  The plan has no true-up provision and the document defines the match determination period as "each payroll period" and not "the Plan Year".  Some people say the match allocation must stop when the compensation reaches to $285,000 limit.  Others say the match allocation can continue (up to the plan formula maximum) on compensation in excess of the $285,000 as long as there are corresponding deferral contributions.  

Should the match allocations stop or should they continue?

Plan has 1 year wait and entry on the following 1/1 or 7/1.  Someone meets the year and now wants to enter the plan in February.  Do they have to wait until July (next entry date?)  What is the timeframe after the entry date to enter the plan?

My divorce was final in August of 2019.  We had QDRO’s drafted by a qualified plan attorney and I signed mine.  Ex-wife  had mental health issues and was hospitalized for attempts on her life.  She succeeded in March 2020.  

My attorney states that now her estate will need to be probated.  She told me that whatever decision was determined by the judge in divorce decree regardless of whether or not ex-wife signed the QDRO’s before her untimely death would still prevail.  

Neither her son or brother has come forward as executor -.  Is my next step to file a motion with the court to get an executor appointed?

I would like to get the QDRO’s processed but not sure what the process is?  My attorney is just taking a wait and see approach right now.

I am a ex husband of a Microsoft employee. A judge signed "QDRO" has been unprocessed for over a year. 

What can I do?

I would like some help determining when to use the separation from service rule/same desk rule and severance from employment rule. I feel that I am being told that the separation from service/same desk rule no longer apply, but the fact that the two rules continue to be discussed makes me feel that I am missing something. 

If I have a partnership that dissolves (and likewise, terminates its 401(k) plan) and a few partners from that partnership start a new business, hire basically the same staff, and start a new 401(k) plan, what rules apply?

Is the new partnership a predecessor employer for terms of service crediting?

Do the staff members that went from Old partnership to New partnership have a distributable event?

Do the coverage transaction rules of 410(b) apply to the New partnership plan? Do I care about this if Old partnership plan terminated and New partnership started "anew" and both plans were safe harbor? 

Potential wrinkle - or, perhaps, opportunity for planning advice - What if New partnership simply spins out of Old partnership's plan and then Old partnership terminates the "remaining" plan? Any change in answers above? Clearly no distributable event issue since the assets would come to New partnership in the form of a trustee-to-trustee transfer; assuming service crediting would automatically apply; but what of coverage issues?

Is there a reason why one would want to terminate the plan rather than the spin-off solution? Assuming the New partnership would "take on" any disqualification defects of the Old partnership plan in the spin-off, whereas those qualification defects would terminate with the Old partnership plan if it terminated. 

Any help to resolve this question I've been fighting for too long is greatly appreciated! Any issues I'm overlooking?

What are the repercussions for not timely distributing the SAR?  Is the correction to distribute as soon as possible following the discovery of it not being distributed?  I've searched and can't seem to find any answers.  No participants are asking for it, but the client is preparing for their 5500 audit and the auditor asked for documentation proving when it was distributed. TIA!

Plan does not allow for separate election for bonuses.

Participant elected $500/pay period for 401(k).

Bonus is coming this week as a separate check.

Do they take out the $500 from the bonus, too?

Hello:  first year of employers plan was 2018.  The 2018 contribution was as for 70,751.10.  Plan sponsor is a sole proprietor.

61k of this was his self employed 401k/sh/and er ps

1750 was his spouses SH and er ps

The remaining 8k is for his rank and file sh and er ps.

Questions:

1)  I assume he goes through VCP to correct the late contributions, correct?  

2)  How do we impute lost earnings?  I would expect to find the market lower today than 10/15/19.

3) Any issues with deductibility?  I think we need to amend 2018 return for the contribution and deduct in 2020.

4) any other issues with 404 and 415 by making the 2018 contribution in 2020.  The 2019 contribution will be made by the 10/15 due date.

I have a plan sponsor who has an employee requesting a CARES Act withdrawal. The employee has disclosed in an email that he hasn't had a negative financial impact from Covid. He just wants the money to invest outside of the plan. The withdrawal paperwork requires trustee signoff. The question is, should the trustee sign off on the withdrawal knowing that the employee has admitted that he hasn't had a financial setback?

Thoughts?

Hi all-

We have a church plan where the previous custodian, when distributions were made for housing allowance, would put $0 in box 2a and mark "Taxable Amount not Determined".  Is this correct or should the taxable amount match the gross distribution and we should mark "Taxable Amount not Determined"?  Wondering how other custodians file their 1099R

Hi All,

Plan has made only safe harbor contributions prior to amending plan 1/1/2019 off of safe harbor matching and instituting a 3 year cliff vesting schedule for matching and all other employer contributions.  The only employer contributions prior to the amendment were safe harbor matching contributions.  Prior to amendment all employer contribution sources were listed as 100% vested, though the employer never made any other than safe harbor matching.

Employee is rehired who previously worked from Feb 2017 to Nov 2018.  Participant maintained account balances and has been rehired Feb 2020.  

Question, would new cliff vesting apply since no prior employer contributions were made, or would they fall under 100% vested as that was the schedule for all contributions at the time even though no contributions were ever made other than those under the safe harbor matching provision?