An executive left 501(c)(3) Org#1 and is now an employee for 501(c)(3) Org#2.  Both organizations have 457(b) plans and both allow transfers - into and out of the plans. This executive is not eligible to participate in the Org#2 457(b) plan.  Can he still transfer his 457(b) account from the Org#1 plan to the Org#2 plan?

The Org#2 457(b) plan document never mentions "participant" or "employee" in the transfer section.  It simply states states "...the Plan Administrator may accept a transfer of assets to the Plan..." and "A transfer shall only be permitted to the extent that it is permissible in accordance with Code section 457(e)(10) and Treas. Reg. section 1.457-10(b)."  I have read both and they mention "participant" but when mentioned they are referring to the transferring plan, not the receiving plan.

My take is that this transfer can occur and I use the analogy of a 401(k) rollover.  An employee does not have to be eligible to participate in a 401(k) plan to rollover money into the 401(k) plan so long as the receiving plan permits the rollover.  The 457(b) plan document for Org#2 doesn't provide a specific restriction so I'm inclined to tell them to accept the transfer.  I would appreciate other opinions whether you agree or disagree.

Two related companies (A and B) participate in a 401(k) plan that has a 3% SHNEC as well as an enhanced match (not more than 4% and not based on more than 6% of comp and meets the other requirements).      No ADP or ACP test is needed, correct?

Company B wants to withdraw from the match.   What testing is needed in the year following the change?   Q1: Presumably the match for Company A must be tested for 410(b).  Or is this just BRF?   

Q2  Presumably Company A now needs ACP testing, right?   Is Company B included with 0 match rates, or excluded because they are ineligible for the match?   I believe they would be included because they can defer, is that right?

Q3 If company B were moved to a separate plan and each plan passes 410(b) then Company B would not be in Company A's ACP test, correct?

Thanks for any help.

I have a client who has an EIN specifically for the plan.  We have had the plan for years and have had the EIN for years.  We have always used the EIN on the Form 5500 and the 1099-Rs.  Several years ago, the plan name changed.  We have continued using the same EIN and have never had any problems - except for this year.  The plan is terminating so I prepared 1099-R forms to reflect the distributions.  Taxes were withheld on the cash distributions and remitted using this EIN.  Now, when participants are e-filing their individual returns, the EIN errors out because the name of the plan does not correspond with the original name of the plan.  Has anyone ever had this problem?  I just need to amend/correct the name associated with the EIN.  I have searched the IRS website and cannot find how to do that.  Any ideas?

I have been searching for a forum such as this for several months.  I have read some of the threads which have been very helpful.

If I can please provide a short summary, than a list of questions.  Last Spring, I was terminated from a very successful ESOP company that is 100% employee owned.  I worked for the company for over 26 years and held the position of VP.  I was one of the 5 top share holders of the company.   I ran afoul of the company President and CFO when I questioned (when I was asked to sell back shares due to the top heavy rule) the low price of the ESOP shares that I would be paid a few years back and the same situation was to occur in 2019 also.   Some numbers to justify why I question the value:  The ESOP shares, approximately 40 participants, have a total book value of $10 million.  Recent five year sales for the company between $58 - $65 million and there are $10 million + in assets alone if liquidated.  Net profit 15% minimum prior to reinvestment and bonuses annually.

Any help with the following questions would be appreciated:

*  I received as statement indicating how many shares I owned and a dollar amount per share.  What can I do to find out how the shares are valued or have them checked by others?  What rights does an employee have?

* Is it standard / acceptable for the President and the CFO to run the company and the ESOP?  There is no board of directors.  Taking very high annual bonuses and controlling the ESOP seems to be a conflict of interest.

*There is a third party appraiser, but I'm sure they were asked to keep the value low.  

*There is more to the termination in regards to questioning the ESOP direction, are the ERISA employee rights for retaliation termination.  I did not ask a question that I did not feel was permissible per the plan document.

* Are there law firms that are knowledgeable to represent the employee in ESOP disputes.  

I am in an at will state and have met with an attorney, but I am finding out he has very little knowledge of ESOPs.  I'm ready to reach out to the DOL, but would like to educate myself as much as possible before that.  

Thanks for your help.

I have a new company with 111 participants at the beginning of the year.  Can they file as a small filer?

CARES Act says tax is ratable over three years. lets say he pays back the distribution in year 3. what happens to the tax paid?  

We have a plan that had a partial plan termination in 2019 because 20% or more of the employees were involuntarily terminated. My understanding is that anyone who was terminated in 2019 (whether or not it was involuntarily) should become 100% vested. However, what if there are a few of these affected participants who already took a distribution (that was not 100% vested) from the plan? Should the amounts they forfeited be restored?

Corporation A has no Plan, and buys Corporation B which has a 401(k) in a stock purchase. Corporation A wants to keep the plan. What is the simple list way for them to do that? Change plan name and tax ID?

Thanks

So the legislation doesn't count a participant as an "eligible" participant if the participant's SPOUSE gets laid off due to Covid-related employer financial issues at the spouse's employer. I'm guessing the odds are  that Treasury will add this situation to the list of "other factors" to be determined? Anyone heard anything on this? I'd rather expect that there will unfortunately be a huge number of such situations.

What do you think about the following statement?

“Individuals who continue to work full-time on a reduced salary are not eligible.” 

So if I have a self-employed individual that has the ability to work full-time, but can't drum up the work for obvious reasons, can't take a distribution for adverse financial reasons.

I didn't make this up.

Thoughts?

If a wife takes a loan from a 401k plan and passes away before it is paid off, can the husband pay off the loan before the end of the quarter following her passing? Or is it automatically defaulted?

A Client's wife inherited an IRA from her mother in 2017. The wife passed in 2020, so now the husband is the beneficiary of the Inherited IRA. Ignoring the waiving of RMDs for 2020 due to the virus, does the SECURE act now apply and does the husband have to take the full balance out within 10 years?

I know there was an extension in funding an IRA with the due date of tax returns being pushed back until July 15.  I haven't seen anything that states the same is true for Employer Contributions for the 2019 Plan Year.  Has there been any clarification on that?

Thanks as always!

Hi

Looking at a 2018 k-1 for a takeover plan (partnership and each partner is making the same amount). I am not sure if I am providing enough information but something does not seem right, at least to me.

K-1 line 14 is 125,000 (same as line 1 - ordinary business income)

Partner pension deduction is 25,000

Partner employee portion deduction is 1,000

Partner health insurance deduction 15,000

The amount subject to self employment tax was calculated based on 85,000 (125k less 25k less 15k)

My approach to calculate the amount subject to self employment tax would be 124,000 (125k less1k - employee portion)

What am I missing here? Your comments are appreciated.

Thank you

Since Many/all are working remotely will the fye 6/19 5500s that were on extension until 4/15 be included in the new extension?  It's hard to understand if it is not further extended. Thank you.

Participant elects flat dollar amount to be withheld from paycheck.  Pay amount for this pay period is less than the election amount.  Should the election be ignored or 100% less tax withholding be withheld?  The document, deferral procedure and enrollment form are all silent on the issue.

Thanks for any guidance.

Do you think it was intentional or an oversight that the criteria for a qualified individual includes reduced work hours, but not reduced compensation?

If a salaried employee is required to work the same number of hours at a reduced salary are they out of luck to be considered a qualified individual?

Thanks.

The CARES Act says that minimum required contributions due in 2020 can be delayed until 1/1/21.  If a calendar year DB plan has a 2019 MRC of $40k due and a maximum allowable contribution of $200k and the employer wants to contribute $100k, a literal interpretation of the Act could imply that $60k would still be due by 9/15/20 while only the $40k MRC can be delayed until 1/1/21.  In other words, the seemingly unintended effect would be that an amount greater than the MRC would be due by 9/15.  Should the new rules be taken to mean that the whole contribution can be deposited by 1/1/21 even if it exceeds the minimum required amount?

Can someone confirm that a FICA Alternative Plan functioning under a 457 or 403(b) plan is covered under the CARES Act. 

Hi there, we are having a debate about the repayments of COVID distributions back into the plan, and if they should be coded as normal (pre-tax) or as after-tax.  I understand that ROTH has to be accounted for separately.  I believe that since the repayments offset the tax burden, the monies become pre-tax once again.  I can't find anything specific on this, so I thought I'd come to this forum for guidance.  Thanks in advance!