Since Relius is no longer offering software to produce 1099-Rs and 945's, what are others using? What do others recommend?

Thanks.

An advisor approached me on 12/31/20 with a potential case. Company with no existing plan. Owner, mother, father and two FT employees that would be eligible under even the most stringent eligibility. He asks me to do a 401k/PS plan document so that the owner could participate and defer $19,500 on 12/31. I immediately think this is not allowed. Where is the chance for the other employees to participate? Even if there was an actual payroll on 12/31 for everyone, this certainly doesn't sit right with me on a BRF basis. Definitely violates the spirit of many of these discrimination rules. If the owner participates and no one else does, the Plan is TH and ADP fails so there would need to be an employer contribution anyway (QNEC and TH) which would be very high if it worked at all. I offered a cross-tested PS option but the FA said he found another TPA that provided him with what he wanted. The case is lost to me so it doesn't matter now but I am curious. Is there a specific reg that would be violated by starting the 401k on 12/31? 

ABC LLC is a multi-member LLC taxed as a partnership.  One member, John, was incorrectly classified as a W2 employee for many years, and is a participant in the company's 401(k) plan.  Beginning 1/1/2021, John is receiving guaranteed payments on K-1 instead of W-2.  Is John able to continue to participate in ABC's 401(k)?  There has been no match or profit-sharing in the past though there may be in the future.  If so, how does this happen?  Does John need to set up his own corporation or LLC to receive the guaranteed payments, and to be the participant in ABC's 401(k)?  If he is eligible, will he then contribute once a year to the 401(k)?

Hello to all

This might be a rhetorical/stupid question but have been thinking about it.

Let's assume, the plan year=corporate year aka calendar year 2020.

SECURE Act now allows pension plans to be set up after corporate fiscal year end and prior to the due date of the 2020 tax return. Let's assume 9/15/2021 is the extended due date.

A candidate approaches for a new plan in July 2021 for a new plan effective 2020. Profit sharing combined with cash balance - no can do on the 401k for 2020.

I get a census for 2020 and also thru July 2021.

I notice that some eligible employees on the 2020 census are no longer there as of July 2021 i.e. terminated sometime during 2021.

With this knowledge, I do not see a problem designing the 2020 plan in July 2021 with the events taken place in 2021. This way, I can anticipate any issues for 2021 and take that into consideration for the 2020 design/testing, done in advance.

What do you think?

Thank you.

Noted that DOL/IRS have eliminated filing a form 5500EZ as Form 5500-SF (One Man) electronically. Going forward you can now file Form 5500EZ electronically. Just checked ASC/DGEM this morning and see that one of the first questions on EZ screen is whether efiling or paper.

That is all well and good, but have filed several final 5500-SF (One Man) filings that had short final plan years in 2020 due to termination already (filed using 2019 series of forms as usual for short final plan years).  Question is what to do about those filings given this late sea change in eliminating 5500-SF (One Man)?

I'm a little (a lot?) confused on this. So, say an ESOP plan that was individually designed (weren't they all until relatively recently?) applied for and received a determination letter in 2014 - back when individually designed plans were on a 5-year cycle. That letter said it expired 12/31/2019.

But, didn't Rev. Proc. 2016-37 eliminate the 5-year cycle, and isn't it true that you generally cannot file for a determination letter currently (except for initial qualification, plan termination, etc.)?

So even if the plan sponsor wanted to apply for a determination letter, they can't? Or, is there a special situation for an ESOP that I'm missing?

There are three threshold for key determination- 

Key Employees

1. An officer of the company earning $180,000 or more annually;

2. 1% owner with a salary of $150,000 or more; and,

3. 5% (or more) owner regardless of salary.

Situation 1: Mr. David got compensation in 2019 $ 140,000 and in 2020 $480,500.

Question 1: Do I need to  consider him as KEY Employee in 2020 plan year (plan year end 12/31/2020)?

Situation 2: Mr. David Mr. David got compensation  in 2020 $485,500 with 1% ownership. 

Question 2: What will be his key status for 12/31/2020?

Thanks in advance.

When starting a new plan, must eligibility be waived for ALL employees?  Or can we say "eligibility is waived for ALL full time employees"?  However full time is defined.

if a plan is reallocating forfeitures only to all active employees (hce & nhce) and 70% coverage does not pass but abt does pass, can you use the active employee status as an allowable determination class to use this option to pass coverage.

Happy New Year!

Wondering if anyone is aware of functionality that allows the plan's advisor to view participant-level transactions and, if permitted, execute transactions or act on behalf of the participant?

Do providers allow advisors to view participant-level transactions? If so, is this something that's common? I received an inquiry today and was unfamiliar. 

Thank you!

LawnBoy

Never seen this one... client wants to NOT allow prepayment on participant loans. Not seeing anything in 1.72(p) or 2550.408(b)-1 specifically prohibiting this, but it seems wrong on so many levels that I've got to assume this has been addressed somehow before.

First, it doesn't seem like ERISA would pre-empt state law on this question, so if state law doesn't allow for such a provision on loans, then that nixes it, perhaps. Then I start thinking about fiduciary issues - if a participant wants to pay it off early, and the plan/fiduciary won't allow it, then the participant is, in essence, being forced into an investment that is perhaps "underperforming." Etc., etc., - anyone ever heard of this question coming up?

I have a question about some plan language I have seen.  The plan provides 3 year cliff for matching contributions based on "Years of Participation".  Years of Participation are defined as, "Any Plan Year during which you both complete at least one thousand (1,000) Hours of Service and receive a match for at least six different months of the Plan Year."  An employee receives matching contributions for a payroll period if he/she defers at least 3% of compensation. Eligibility is date of hire and entry date is the date is based on the date you elect to defer.

I believe that minimum vesting requirements under 411 require counting all years of service for all Plan Years in which an employee earns at least 1,000 hours of service, unless the year of service is can be excluded.  The closest language I can find for this situation is Treas Reg 1.411(a)-5(b)(2), which states, "In the case of a plan utilizing computation periods, a year of service completed by an employee under a plan which requires mandatory contributions (within the meaning of section 411(c)(2)(C) and § 1.411(c)-1(c)(4)) to be made by the employee for such year, if the employee does not participate for such year solely because of his failure to make all mandatory contributions to the plan for such year. If the employee contributes any part of the mandatory contributions for the year, such year may not be excluded by reason of this subparagraph." (emphasis added) 

My reading of Treas Reg 1.411(a)-5(b)(2) is that a year of service for vesting cannot be excluded for any computation period in which some mandatory contributions (matching contributions in this case) are made (i.e., even if just for one payroll period), so that there may be an issue with requirement that an employee receive matching contributions for at least 6 months in the computation period (Plan Year in this case).

My question is, am I misreading Treas Reg 1.411(a)-5(b)(2), or is there some other guidance that permits the requirement stated by the plan?

Is there a way to check to see if a late 5500 was through DFVCP?  

I can see on the EFAST website that the filing was accepted (late), but I don't have a record that it was filed through DVFCP confirming payment of the $750 fee.

Happy New Year everyone.

Any help is appreciated.  If more information is needed let me know.

Around 50 doctors/partners in a medical management group.  Each partner receives a K-1 of around $100,000 annually from the management group.

The same doctors are also part of a very large regional hospital network from which they are maxed out in that the 401k and DB plan through the hospital.  Their compensation directly from the hospital is over 7 figures.

Can they establish a retirement plan through the management company and, assuming no discrimination problems, max out with a 401k and/or cash balance plan as well?

Thank you

I had a QDRO done back in 2015 (California).  My date of marriage were 12/2000, my date of separation was 5/2011 and divorce was final on 11/2014.  I was looking over some old files and the figure used for the QDRO was gathered from my 401K Plan on 12/2015, and lets say it was $362K higher than the plan balance on our date of separation. The alternate payee received close to 300K (compared to the $216 I believe she should have received) which was separated and placed into an IRA for her.  As far as I know she hasn't taken the payment yet.

Do I have any grounds to appeal this?  They clearly used the wrong valuation date in my opinion.  What options do I have? Or am I just missing something?

Below is what my plan guidelines outline for AP.

Amount to be paid to the Alternate Payee.  This order hereby awards, assigns and grants to the Alternate Payee and, as otherwise provided in this Order, the Plan shall pay to the Alternate Payee an amount equal to ____ percent of the total account balance of the Participant’s account accumulated under the Plan as of [specified date], plus any interest, earnings, investment income, gains, and increases, or losses, attributable thereon from such date until the date of total distribution to Alternate Payee.  For purposes of determining the value of the Participant’s account in the Plan, outstanding loan balances as of the relevant date (shall or shall not) be taken into account

Here are the facts:

1) A participant submitted a written request to their employer to raise their deferral rate.  The written request was received and acknowledged by the employer (voice and email).

2) In the acknowledgement email from the employer, they told the participant to expect an email confirmation from the record-keeper.

3) At year-end, the participant realized they never did receive a confirmation from the record-keeping, and their request to raise their deferral rate was not implemented.

4) When the participant contacted the employer, the employer said the participant should have noticed that they didn't receive a confirmation from the record-keeper of their request.  Consequently, the employer deems the participant responsible for the mistake, and the employer won't make the retroactive corrections.

Who is responsible for the mistake?  The participant or the plan sponsor?

I cashed out a 401k in February 2020 . I lost my job in March. Will I need to pay the penalty for withdrawing?

I was legally separated from my spouse in 2009. We agreed on our legal separation (filed in court) to split all retirement 50/50. The value of my 401k/IRA was worth about the same as his Municipal pension + IRA at that time. The intent was that he got 50% of my 401k/IRA and I got 50% of his Pension. We never got or filed a QDRO.

Fast forward to last year. He could start collecting his Municipal pension. Since no QDRO was ever filed we filled out the paperwork together. I signed off on him getting his full Pension during his lifetime and I get 50% after his death. He signed off his rights as beneficiary on my 401k/IRA & Pension (all of the Pension was earned after 2009) and I sent that in and it was approved. 

Do we / should we still get a QDRO or is the the paperwork we sent in to his Municipal pension plan and my 401k/Pension plan enough?  

For whatever reason, the payor EIN on the schedule R has been the company's tax id for several years.  Up until 2015, they were using the EIN of the custodian.

Should we amend those filings for that little thing?

Is it permissible to use a county or city tax assessment value for retirement plan purposes.? This would apply to any plan as far as annually reporting plan asset values on a 5500. For a defined benefit plan, it would also affect the minimum and maximum required contribution amounts each year. It would  also be a factor in valuing distributions in kind and be especially important as to whether 415 is complied with for lump sum distributions which include real estate.