We have recently taken over an individually designed cash balance plan effective 11/1/2007. The prior TPA argues that because it was an individually designed plan, it was not required to be restated for EGTRRA. The plan was, however, amended for 436 and HEART. In addition, I find it concerning that the original plan document does not come with a favorable determination letter. Is it correct that this individually designed plan does not require a FDL or any restatements? Would appreciate any guidance you can provide. 

The 2018 census indicated that an employee was on leave as of 01/01/2018 (given the nature of the client's business, this is common).  The 2019 census indicates that the employee is retired as of 01/01/2018.  Participant's DOB is 10/20/1948.  Should this participant be required to take an RMD now for 2018 which would have been due by 04/01/19 prior to distribution of her remaining benefit in the plan which will be rolled over to an IRA?  

How do you interpret and apply IRS Code § 411(d)(3) in Defined Benefit Plan termination?

If the plan terminating in May 2020 and  if there were participants terminated in 2019.

Do you make those terminated participants in 2019 100% vested when the plan terminate?

How about anyone terminated in earlier years with accrued benefit in the plan (2018, 2017, 2016, 2015)?

How about anyone terminated in earlier years  whose accrued benefit entirely distributed to them (2019, 2018, 2017, 2016, 2015)?

My client received a 1099R for a distribution taken during 2019 from an Inherited IRA account.   My client was the non-spouse beneficiary of this IRA and inherited it several years ago.  The funds are held in an inherited IRA.  My client is over age 59 1/2 (actually 61 yrs old).    The 1099R is coded with a "1" in box 7.   That seems wrong to me.  If she is over 59 1/2, shouldn't it be a code "7" normal distribution so that the 10% early w/d penalty doesn't apply?

Any guidance or advice is much appreciated. 

Thank you.

Senior moment - where on Form 5500-SF, if at all, would you report a defaulted loan?

2 people whose comp is in excess of 80% of  the TWB +$1.00.  One is the owner who wants his contributions to max out.  That means he gets an $18,600 profit sharing.  His remaining contribution is $9,221.33, which added to 5.40% of his  excess = $18,600.  That means 3.29% goes to staff ($9.221.33/$280,000) -- does that percentage also go to Person #2 who has excess comp?   See example below.  Thanks!!

Does anyone have a good reference they would not mind sharing that shows for which state's taking a plan distribution may affect the individual's unemployment benefits?

Thanks.

AN  employee has quit working except for PRN but had been full-time and  qualified for the retirement plan - took a loan and stopped paying on it when he went PRN  - the asset platform is wanting guidance on whether the loan should be deemed distributed or just in default and accrue interest on it?   If he is PRN then is he  technically terminated if they pay him wages and not 1099 misc.?  What are your thoughts on how this loan should be handled and reported.  Thanks!

My client (P.C.) was reading an article that mentions utilizing the PPP loan to fund defined benefit pension contribution

"CARES Act 2020: Paycheck Protection Loans as Funding for Defined Benefit Pension Plans Sponsored by Small Businesses"

I don't see anything either in CARES Act or PPP Information Sheet that would lead someone to come to this conclusion

Can the same accounting firm have an Audit & Assurance Service line that provides Audit Support to Larger 401(k) Plans, the financials etc. and also have a TPA Service Line perform the TPA services for those same client?   Different Service Lines, different employees, but same Firm.

I hear mixed comments on this all the time, so I'm curious what this board has to say about it?

Our ESOP plan document has the typical provision regarding distributions to terminated participants:  last day of plan year following later of reaching age 65, fifth plan year following plan year in which termination occurs, or 10th year of participation.  (There is no outstanding stock loan.)  Distributions to participants with a balance greater than $5,000 take their distributions in equal installments over five years.  We have a window of time following receipt and approval of the valuation for participants to request a distribution.

An issue I've never been able to figure out is what do you do with participants who are entitled to receive an installment distribution, but do not send in paperwork during the window?  We have ex-employees who want to leave their account open because they think the value of the stock is going to go up, which it has in the past.  However,  we also have people who request a distribution one year, but then forget or neglect to do so for subsequent years.  Our recordkeeper/TPA says that their forms are only good for a current distribution, and participants must send in additional paperwork each year to get the subsequent installments.  As you can imagine, this plays havoc with our cash flow projections.  Is this really how it's supposed to work?

Thanks for any guidance out there!

My apologies if I'm not asking this correctly, I'm not an actuary, and don't do a ton with DB plans. If this has been answered elsewhere, please feel free to point me to that thread. 

Calendar year, small PBGC covered plan (maybe 30 people) has a $300,000 FD from 2018. Minimum required contribution for 2019 (including prior year FD) total $400,000. 

What is the funding deadline? I understand that interest is due for any minimum amounts not deposited by 9/15, but can the full minimum be extended? Or just the additional amount, the $100,000?

And the $300,000 has to be deposited by 9/15 to avoid another year of excise taxes?

I know how to figure a Integrate with TWB but for some reason this is confusing me. What percentage do you use for staff when 2 people (1 owner) have compensation in excess of the TWB? 

Hi all. I'm a participant-sided ERISA attorney but not as familiar with ESOPs as other plans. I have a client who owns shares in his company's ESOP. From 1998-2005 he had a Company Stock Account (CSA) and in certain years he also had an "Other Investment Account." The CSA and OIA are defined in the Plan. He left the company in 2005, and at the beginning of 2006 the company moved the value of his CSA (.724) shares ($15k+) into a "Segregated Investment Account." To my knowledge he was not notified of this move nor given investment options. We do not know the SIA investment vehicles. The plan does not mention or define SIAs anywhere, even though balances, investment gain/loss, and distributions/transfers are listed under a section called "Segregated Investments Account" on the year-end stock certificate (or what looks like a stock certificate). The Plan defines an "Undistributed Account" as comprised of the "CSA" and "OIA" of a participant that remains at the end of any year in which the participant has terminated employment. The Plan states that the "Trust shall exchange any cash or other liquid assets held in the OIAs of Participants for the shares of Company Stock held in the UA." The client returned to full-time employment in 2007 but his SIA balance remained in the SIA account, mostly losing money. His CSA share accumulations for employment in 2007 started over from zero, as did his vesting for new CSA shares. The SIA balance was always 100% vested. The company admits he should have been fully vested in his (new) CSA accumulations after he returned to work, but claims no harm was done because he didn't take a distribution and he was fully vested in those shares by 12/31/2010. (In 2010 the company entered a consent decree with DOL related to improperly low share price upon termination of employment and segregation of the terminated employees' account balances to the SIAs and my client received a very small adjustment to his SIA balance as it went into his OIA in 2010.) As noted, the $15k+ balance in his SIA remained there until the end of 2010, when it was moved to the OIA, and then to the CSA (it appears in all 3 categories in varying amounts on his 2010 certificate). As noted above, at the end of 2006 he had CSA of .724 and with the return to work in 2007 the "new" CSA shares started over from zero. The $15k amount the company moved from SIA back to CSA in 2010 had nearly the same value in dollars as it did in 2006 when it was moved from CSA to SIA, but when they moved it back and added it to his "new" 2007-2010 share accumulations, they added it back as .514, not .724. The share price was higher in 2010 than 2006, but it sure seems like he lost a lot between starting his CSA accumulations from work in 2007 all over again, as well as having that SIA balance sitting in SIA until 2010.  The PA responded to my first information request basically saying they had a right to move everything into the SIA when he left in 2005. The company does not have a knowledgeable PA and it is not using an ERISA attorney to respond to our questions, so that is part of the problem. But can anyone advise me as to what further questions to ask at this point? I don't want to spend this client's money spinning my wheels, but it does seem like something isn't right with his accumulations. Thanks in advance for any assistance!

I believe any returns due after 04/01/20 and before 07/15/20 are automatically extended to 07/15/20, and that this includes 5500s.  Hence a plan with 06/30/19 Year-End already on extension to 04/15/20 is now due 07/15/20.

Is this correct?

Some plan sponsors would prefer to adopt, once, a provision that allows whatever loans and distributions can be provided without tax-disqualifying the plan.  Some would like such a provision to include what becomes allowed under future Acts of Congress.

If a sponsor of a prototype or volume-submitter document presented such a provision, would the IRS approve?

If a sponsor of a new individually-designed plan presented such a provision, would the IRS approve?

Assume an employer sponsors 2 defined benefit plan, running concurrently, and the Plan document for Plan A states that "the aggregate 415 limitation for all pension plans shall first be applied to Plan A"; and Plan B also says the aggregate 415 limitation shall first be applied in Plan A". 

Assume further that in Plan A that the computation of the Annual Accrued Benefit, before taking into account the "aggregate 415 limitation", would be X. And in Plan B it would be Y.

The aggregate 415 limitation is  Z, and assume further that X+Y > Z. In preparing the valuation and  benefit computation, including lump sums payable,  my interpretation of this provision is that X is limited to Z-Y. Is this correct? Is there another possible interpretation?

Just processed a wd of $100k and $10k was withheld for federal tax. I am in FL so no state tax. 
 

assuming I had no other income for the year, should I expect any additional taxes next year?

Client is self employed with $204,000 in self employment income. Client claims no need for a pension as a 401k profit sharing will allow $62,000 in contributions because he is over age 50. Client's advisor states the 25% of pay rule does not apply and the client also is allowed $6,000 as the phase -out due to income does not apply. Client files jointly. Is the client and advisor correct. The advisor states also 415 does not apply.. .Hence no need for a pension. No employees except the owner.

I submitted a form 5330 as of 12/31/2018, there were over 12 times that contributions were deposited late in 2018.   They deposited the earnings in 2019 and all deposits are now on time.    When filling out the 5330 for 2019,  do I have to list each late 2018 contribution individually on the 2019 5330 or can I just put one date and use the total.