(stealing Belgaraths topic to try out the poll feature )

There is a SH plan and a Non-SH plan in a control group. They both pass coverage on their own, so aggregation for ADP/ACP is not required. However, there is at least 1 key employee in each plan, so they must be aggregated for Top Heavy purposes. The plans are top heavy. My question is this: do the Non-Key employees in the SH plan have to receive the Top Heavy minimum contribution? Since that plan is SH, my thinking is that they don't. Do you agree?

Taxable third party sick/disability pay (e.g., where the premiums are employer paid or are treated as such because they are made pre-tax through a cafeteria plan) would be included in a W-2 definition of plan compensation.  As a practical matter, how are deferrals on these amounts handled where the amounts are paid by the third party insurer directly to the participant?  Do any insurers actually withhold deferrals and forward to plan sponsors for deposit in the plan?  I have seen this issue discussed on a number of threads, but I haven't found any that reached a conclusion.

Thanks!

ER uses a uniform formula for allocating profit sharing contributions. The formula utilizes various classes of employees based on years of service. The ER wants to further prorate each employee's share by the number of weeks in the year that the employee is actively employed. Is this what is intended to be allowed under 1.401(a)(4)-2(b)(2)?  If not, is there another basis for allowing the proration? THANKS!

Does anybody know of or have a template for a Permanent Opt-Out Form? 

Thanks.

I am trying to determine when the first RMD is due for this participant in a Cash Balance Plan.

Details:

- Participant is 100% owner of the plan sponsor.
- Participant turns 70 1/2 in 2018.
- Plan's original effective date = 1/1/2018.
- End of year (12/31) valuation date.
- Plan excludes service prior to the effective date of the Plan for vesting purposes, and the vesting schedule is a 3 year cliff.

Would the first RMD be due 4/1/2021?

My mom had a Pension. A QJSA. She divorced in 2006 and retired in 2011. In her divorce they each retained their own retirement acts. Free and clear from any claims of one another. Through her employer I was her beneficiary on her life ,ad&d, 401k while she was working. She has passed and the company said the beneficiary had been notified without another word spoken to me. Her attorney said that state law (Ohio) predeceases the ex in retirement plans with decree which she thought all would go to me (pension and other acts) I am her only child. Now, her employer said I was not the beneficiary although I showed them paperwork that I was, which was done at her retirement in 2011. EVEN THOUGH THEY NOW SAY, after 5 months of back and forth, that I’m not the beneficiary they want me to send in her death certificate? It does not make any sense. 
 

Not only am I dealing with the death of my best friend but her employer is making me feel like crap to be honest. It’s all so very sad and don’t know what to do at this point. Do I just give up? Do I let it go? My mom did not want him to have anything because he had his own and it was always her intentions for me to have her acts. I was also her power of attorney and we had bank acts together. I have taken a full notebook of notes with the conversations I have had with her benefits center and Human Resources.  Any insight would be appreciated. Thank you so much! 
Quinan

I don't think this is the proper forum for the question, but ... do TPAs ordinarily require that a participant sign that they received a copy of an SPD?

If so, any samples available?

Does the 10 year rule to non spousal beneficiaries apply to death benefit payments after 12/31/2019 or to deaths after 12/31/2019.

That is if a participant died prior to 12/31/2019 but the distribution is not elected or processed until after 1/1/2020 can the non-spouse beneficiary still take advantage of the old "stretch IRA" rules by rolling to inherited IRA or are they locked into the new 10 year payout rule?

I note box 4 is split on the 2019 Schedule K-1 into a, b & c

are both a & b self-employment income?

(Don't have a completed k-1, just have a question asked me about it that I can't answer and just wondering how it will work.)

thanks 

Taking a poll here. Or maybe a survey. Do you prepare these for your retirement plan clients? If not, do you notify them that it is required when there's a change that would require it?

In your opinion, is this (or should it be) the job of the TPA, or the CPA, etc.?

Small plan with two owners and a hand full of eligible employees.

Owners' wives were each provided a $19,000 deferral in early 2019.  I just received the company's 2019 payroll information, and neither of the spouses received any income for the year.

How to correct?  Forfeit their deferrals (and earnings)?

Thanks!

One of my clients is looking for a speaker who can educate their employees on student loans, how to pay them off, etc.  Note - they are NOT looking for a service that they pay for - just education. Anyone have a speaker they would recommend? Austin, TX area is where they are located, although, I suppose a web-based education could be possible.

Hi everyone,

I have a client with a closely held c-corporation who is deferring most/all of his income into a NQDC plan. The earning that are put aside/"invested" for him are currently put in an index fund. However, he would like to have the NQDC fund lend him money. I feel like this would not workout in an audit, but he has consulted with a tax attorney who states that the NQDC plan is making him a loan with interest/principal to be paid as lump sum in the future (20 years from now) similar to a mortgage. I feel as though this is more a scheme and will not work in the best interest of the client.

I understand that the IRS position is that amounts are not subject to a substantial risk of forfeiture if the future service is less than 2 years.  So lets say all contriubtions made between 2020 and 2025 will vest on 12/31/2025.  What about contributions that accrued during 2024 and 2025?  I can;t find anything that addresses this precise scenario.  Obviously overall there is a significant risk of forfeiture with this arrangement.  But is there a significant risk with respect to the 2024 and 2025 contributions?  Has the IRS ever addressed this?  I think in practice this is quite common because "cliff vesting" is quite common.

I am in an employer 401(k) plan and borrowed money from the plan. I had $250,000 in plan, took a $25,000 loan and later prior to making any payments I changed jobs. I did not repay the loan and it was offset against the plan assets, the net amount of $225,000 was rolled into a new employers 401(k). I received a Form 1099 showing the net rollover amount which was coded 'G'. I also received a Form 1099 for $25,000 as both the distribution amount and the taxable amount, meaning the loan is now taxable to me in 2019. I understand that I have until the due date of my 2019 Form 1040, including extensions to come up with $25,000 and put it into the new plan or into an IRA so in effect the entire $250,000 would be deemed rolled over and no taxable income would result since all of the plan had been rolled over.

My broker said I could take another loan from the new 401(k) plan(which received the net amount of $225,000)for $25,000 and put that $25,000 into another 'Rollover IRA' and that would qualify as a repayment of the loan or would be considered as part of the original rollover preventing tax due on the plan loan.

This does not seem correct as the original plan loan was not repaid, the plan was not put back into it's original position of $250,000, the 2nd $25,000 was borrowed from the net rollover and the net rollover is pretax income which I read cannot be used to repay a plan loan.

May I hear from those who have any thoughts on this situation, if it will be considered as a complete rollover, even if the $25,000 came form the pre-tax net rollover funds?

Thanks for your help.

Jay

Hello,

I have attempted to search for an answer to this question on this site and elsewhere and found nothing - apologies if I am missing the obvious. It seems very strange to me that a sale of all assets requires a pass through vote, but a sale of all stock that accomplishes effectively the same thing does not. Is there a good reason for this I am missing?

My other question is if there is relevant law clarifying which plan participants a trustee is expected to act in the best interest of, and the meaning of best interest. A sale that multiplies the stock value is obviously in the financial interest of those close to retirement that likely have the most shares. The further from retirement an employee is, the more uncertain this is. The sale will certainly provide a short term financial benefit, but the long term effects depends on what the future growth of the company would have been without a sale. I saw a claim that in a situation where an offer was made for 10 times the ESOP's value where the purchaser built in a plan to lay off all of the employees (who are plan participants), a trustee is required to ignore the layoff aspect because they are only acting in the best interest of plan participants, not employees. I can see the logic, but this seems like a very peculiar definition of "best interest" and "plan participant" that stretches credulity.

First time poster here, didn't see any pinned rules to avail myself of - please let me know if I have made any faux pas!

Thanks!

I'm generally aware of the IRS position on "linked" nonqualified plans where a formula benefit under one NQDC plan would offset another NQDC plan, i.e., that they generally view any formula under a 409A-covered plan that can offset or change the amount, time, or form of payments under another 409A-covered plan as impermissible.

What about where one plan is (or both plans are) exempt from 409A? 

For example, an employee has a short-term deferral exempt from 409A that provides a lump sum of 10 times his current base salary of $250,000 if he is still working at age 65. The payment is reduced dollar-for-dollar by the amount of any other vested nonqualified plan benefits payable to the employee. Say the employee is age 64 when the employer gives the employee a fully vested 409A-covered plan that provides 10 annual installments of $225,000 each starting at age 65. The employee would receive a payment of $250,000 upon reaching age 65, then $225,000 a year for 10 years.

I don't see this as falling under the IRS's prohibition on "linking" nonqualified deferred compensation plans. For example, Section XI.B of Notice 2010-6, generally addressing the issue, speaks only in terms of a "nonqualified deferred compensation plan" linked to "another" "nonqualified deferred compensation plan." There's only one 409A-covered "nonqualified deferred compensation plan" that is not impacted by another one.

Alternatively, say you have the same lump sum agreement but it's offset by the value of any vested 409A-exempt stock options outstanding at age 65. The options can be exercised for 10 years following termination. In that case, neither one is subject to 409A, but the parties may arguably in a sense "defer" the lump sum by allowing the employer to give the employee options before reaching age 65 that the employee can exercise any time over the 10-year period. 

Apart from the linking, any argument that this is a change to the time/form of payment of the lump-sum benefit? Or an initial deferral of a short-term deferral? I don't see any explicit authority for this, except maybe general anti-abuse. 

Would appreciate any insight.

We have a client where a partner wants to deposit his $63k 415 limit  in January of 2020. His comp will be way more than the max and we'll for sure pass all testing when the year end arrives. Question is that because he is a HCE, can we "fund" his employer contributions before the NHCE's are funded? Or is the only requirement that all employer be funded by tax return due date?