What agency has oversight over Governmental DC plans?  Are Governmental DC plans ever audited?  If yes, by who?  

I am restating a traditional defined benefit plan from a prior provider’s document to our pre-approved volume submitter document.  The plan credits all service with related employers (i.e., members of a controlled or affiliated service group) for eligibility and vesting.  However, for purposes of benefit accrual, service with related employers is counted only from the date the related employer adopts the plan (or, if applicable, from the date an employee transfers employment from a non-adopting related employer to the plan sponsor).  The IRS did issue a favorable determination letter on the document prepared by the prior provider.  I suspect the application was filed using a Form 5300, but I do not know for certain.  (The document is in an individually designed format vs. on an Adoption Agreement.)

Under the terms of our pre-approved volume submitter base doc, all service with related employers is automatically credited for all purposes.  (I see this was a required provision under Section 14.03 of Rev. Proc. 2015-36.)

If we move forward with the restatement, I understand the provision limiting credited service for benefit accruals will negate reliance on the IRS advisory letter.  Since the plan already has an FDL, I don’t believe there is an option to file for a new letter using a Form 5300.  The question I have is this:  could we reasonably argue that this provision is a “minor modification” to the pre-approved volume submitter language such that we could apply for a determination letter using Form 5307? 

Trying to get people's opinion of if it makes sense to add 3(16) services as a TPA.  I would assume it is an add on service and not required (more of a convenience for the client.)  I am a small TPA about 180 clients right now and not sure if it makes sense or is a way to prepare for the possible open mep legislation.  Is there certification to become 3(16) authorized and how are people billing clients for this, are a couple of my questions.  

Any input would be greatly appreciated.

Good afternoon,

In a takeover case, the employer would like to do the following in his new document:

1. Annuities are the normal form of benefit in the current 401(k) plan document.  The employer maintains that he did not know this, that nobody has ever been offered an annuity nor have they inquired about one, and certainly nobody has ever taken one.  He was genuinely shocked to hear that this provision is in is current document.  He maintains that they never had a Money Purchase Pension Plan, a Target Benefit Plan or any other plan at all besides the current one, which started life as a profit sharing plan in 1969 and eventually had 401(k) provisions added to it. The incoming account balance report does not have a source where MPP money or related rollovers are being tracked.  It would appear that there never was any reason to have annuities as the normal form of benefit.   He wants us to take out any reference to annuities and put in lump sum only.  

2. Normal retirement age has been plain age 65, and he wants us to change it to the statutory definition of age 65 or the completion of 5 years of service, whichever comes later.  

Does anybody see either of these changes to the document as a violation of anti-cutback rules?

Thank you for your thoughts.

In November 2018, while still employed full-time, I received an early distribution from my Prudential retirement plan that my (former) employer now claims was not available under the terms of the plan.  Subsequently, Prudential Retirement informed me that I "received an overpayment in the amount of $8614.18 that was not eligible for a rollover."  Prudential is requesting that I pay back this amount in full. 

I conacted Prudential to explain that this 2018 early withdrawaI was NOT a rollover to an IRA nor to any other retirement plan.

At the time of my initial withdrawal request in 2018, I explained to Prudential that I needed the money to pay down miscellanous household, credit card, and medical care expenses. This early distribution was processed without delay, and was ultimately reported on an 1099-R for tax year 2018. 

I retired in July 2019, and am now receiving monthly payments from that same Prudential retirement plan. However,  I'm extremely dismayed over this recent issue, and Prudential has been vague about my options or rights. Bottom line: I am unable to pay back this overpayment amount. 

I believe I'm the victim of an egregious clawback. What must I do?  What can I do? 

Is there a timeframe within which to file an "amended" return?

I do not see any reference in the 2018 Instructions to Form 5500-SF/

We have a defined benefit plan that is a lawyer and his employee. They are not covered by the PBGC. Do we have to file the standard termination process in the PBGC instructions for terminating the plan including the 60-90 day notice prior to the termination date? If not, what is the timeline? Thanks!

With the Social Security Administration announcing its COLAs on the taxable wage base as well as the increased Social Security retirement benefit, the IRS now has all the information it needs to be able to announce the 2020 dollar amounts as indexed for the cost of living. Any indication of when this will happen?

Thank you in advance for any help in this matter. Client with DB floor offset plan left and went to new firm. The new firm is asking for written explanation of how the offset calculation (ie accrued benefits after offset was determined). Question: How much work and time are we required to spend in explaining how the plan was administered.  2. Can there be a charge for our time etc. in putting together this information? Thank you.

Do you have to do a QDRO if your ex-husband is deceased and the court ordered that you get half his retirement. Years ago I started the paperwork for the QDRO because  I was granted  half his retirement on the day we divorced. The only thing was my husband never finished them.  Now he is deceased and I am getting his social security.  The social security informed me of my entitlement to his companies pension.  I have the paperwork pleading for joinder and summons. Do I still have to do a QDRO????

Is it allowable for a participant in a 401k plan to max out his ROTH  deferrals in the plan, and also contribute to a ROTH IRA for the same year?

A participant did not remove his 2019 IRA RMD prior to the rollover to his 403(b) earlier this year. Approximately $4000 was not eligible for rollover. I understand the 2019 IRA RMD cannot be satisfied by simply cashing it out of the 403(b), but can the IRA RMD amount be treated as an excess in the 403(b) and pushed to the participant that way? That is how the sending firm wants it to be treated. Would treating it as an excess also satisfy the IRA RMD?  I am not familiar with treating RMD amounts as excess and could use some guidance. TIA

Anyone familiar with a tax strategy using an ESOT?  Gist of the strategy is payments are made to an administrative services company (S corp) owned 100% by an ESOT.  No income tax due at the ESOT level obviously but then they say only 15% of the profits are allocated to the rank & file.  That's the part I'm struggling with as I would assume allocations would need to be based on compensation???

Large Payroll company has both payroll services and PEO.  Sponsor A signs up with payroll service in 2016.  Sponsor A has its own 401k Plan.

Sponsor A's 401k is mistakely moved to PEO 401k plan (don't ask me how).  Sponsor's employees have been making contributions to the PEO plan since 2016.

1. I assume this is a VCP Correction under transferred assets.

2. Who makes the application for VCP.  Sponsor A, PEO, or both?

3. Assuming it can be self corrected, is the money in the PEO treated as if it were in Sponsor A's 401k plan all along?  Or, are the contributions and its earnings taxable as that money didnt belong in PEO plan in the first place?

4. Can the money that is wrongfully in the PEO, be moved to IRAs?

Thanks in advance.

We are looking at a prospect, small law firm, one 100% owner, his wife and about 6 staff.  Entity is an S-Corp.  It's been a while since i've dealt with an S-Corp, but back then i remember the S-Corp owner being paid by W-2.  I remember, I hope correctly, that they had be paid by W-2 for plan purposes.  This S-Corp has K-1 income.  Can that be used for similar to partnership calc for retirement plan contribution purposes (without SE tax)?   Or must it be be W-2 comp?  Thanks in advance for all replies.

In July, our team filed Forms 5558 on multiple plans that would need to be extended.

However, we had a new one-man plan that we filed Form 5558 for that didn't end up needing to file a Form 5500 because his assets were below $250,000.   Client received the acknowledgement letter stating the extension of time was received.  

Will we receive a notice stating the filing was late?  Are we better off to just wait and respond to a notice when one is received or attempt to call the IRS or write a letter in response to the extension letter?

The situation is simple. Nowadays many people will roll their retirement funds (401k, 403b, IRA, etc.) into a ROBS account to self-fund a business. So imagine for a moment, you take out retirement funds, self-fund a business. The business technically is 95% owned by your Retirement Accounts (call them 401k for simplicity) and 5% funded by you. 

As a business owner, you take an SBA loan, your bank of course never gives the correct amount of working capital, so you end up using personal credit cards, personal funds, etc. to help your business succeed. And in fact your business does succeed. But you are left in the unenviable position of being essentially bankrupt. But you have a business that has a great chance of success. You still have monies in your 401k funds. And to survive you need to consider personal (not business) bankruptcy as your debts exceed your ability to pay them. And you are not taking a salary from your business because it needs the working capital to continue growing successfully. So the question becomes, if this individual files for personal bankruptcy, and if there 401k retirement funds are protected, and it so happens that the 401k owns 95% of the business, is that business protected??

The question posed here - Is a 401k funded business (ROBS) protected or exempt from personal bankruptcy???

If a loan is delinquent with loan payments (or in default for that matter), the situation can be corrected by either making a lump sum payment to bring the loan current or re-amortizing the loan within the maximum loan amortization period permitted for the type of loan.  Or in the alternative a combination of both methods. 

My question is can the loan be re-amortized if the plan specifically does not permit a participant to refinance a loan?  Could you make a distinction between re-amortizing and refinancing if there is no addition amount added to the loan amount?  Say for example the participant or the plan sponsor pays any accrued interest on late loan repayments and only whatever remains of the original loan amount is re-amortized?

Thank you to anyone who wishes to respond.

A calendar year plan still hasn't deposited its Safe Harbor Non-elective for 2016. The operational failure can be Self Corrected as long as it's done within the Correction Period. Regs say the Correction Period starts the year after the failure occurred......but in this case, did the failure occur in 2016 (the year the contribution is for), or 2017 (12/31/17 was the latest the contribution would have been considered timely)?

Thanks

I have a client with a safe harbor match only plan, which excludes union employees. The union plan is DB. Employer now wants to include only one of their 14 union employees in the 401k plan. All union employees are NHCEs. Assuming the CBA allows it, and aside from creating dissention in the ranks, is this ok?