401(k) Plan - A terminated participant was added to Form 8955-SSA in 2016. In 2018, they started receiving their RMD's. The Instructions to the Form, for Code D, states "Use this code for a participant previously reported under the plan number shown who is no longer entitled to those deferred vested benefits. This includes a participant who has begun receiving benefits......"

Do we interpret the above quotation to include former participants that have started to receive their RMD's?

Not sure if it matters, but this Plan does not permit annuity forms of payment.

DB plan was established for 2018 for S corp; accountant called last week to mention that the was no W-2 for 2018 and wants to use Schedule C income.

I would think the plan definition of "compensation" would need be amended as well who would be participating.

Would a Joinder Agreement suffice in this instance?

Good afternoon everyone. Forgive me in advance if this is simple question, but I don't know anything about HSAs except that it is a Health Savings Account. 

I have a HSA from an old job where I had a HDHP. I no longer have a HDHP. I have also since married and had a child.

My question is can I use some of the money from my HSA to pay the medical bills, that are in my wife's name, from having our baby last year? 

I seem to recall that this is permissible, but it has been a long time since I have looked into the matter and I have not been following any changes to HSA legislation to know if anything has changed (assuming my understanding was correct from the beginning). 

Are there any potential issues to look out for if I proceed as described?

Thanks in advance and let me know if you have any questions.

Thanks!! 

Corp sponsors 401(k) SHM plan, definition of compensation is 415 safe harbor, about 10 participants, including the owner.

Box 1 and box 5 of w-2 have different amounts, Code D is $18,500.

Accountant not taking into account medical premiums for the 2% + shareholder.

Getting conflicting answers, isn't medical a fringe benefit?

Notice 2016-16 states that a permissible mid-year amendment for a SH plan can be:

Quote

(iii) Reduction or suspension of safe harbor contributions or changes from safe harbor plan status to non-safe harbor plan status (permitted only as described in §§ 1.401(k)-3(g) and 1.401(m)-3(h)).

1.401(k)-3g says you can change SH plan mid year if

a) there the company is operating at an economic loss OR

b) the ER adds the the annual notice a statement that the plan may be amended during the year to reduce or suspend the SH NEC contributions provided a supplemental notice is given at least 30 days before the reduction.  

I checked the SH notice that comes out of or doc system (FT William) and I don't see such a paragraph.  So, are we out of luck under b)?  How would they stop it, then, if they can't afford it but not operating at an economic loss?  Can they just send a notice now that says:  effective Sep 1, we are stopping the SH?  (plus all the other conditions, like letting participants change their deferral elections, etc).

Does anyone know how long it generally takes the IRS to respond to a VCP submission?  We sent it in back in January and the check was cashed, but we haven't gotten any actual response.  Is there a phone number we can call to see the status?

Thanks in advance!

We have a sponsor that allows loans in its plan.  Someone took a loan a couple weeks ago.

Thing is, the ER's payroll system has no mechanism to deduct and remit loan repayments!

The sponsor is a big company with a proprietary payroll system, so switching to another program is NOT a solution.

What can they do?  Can we somehow cancel the loan?

I’ve been divorced about a year and a half now and the judge denied me to getting half of ex’s 401K.  He stated we needed a QDRO.  Not knowing what that meant we contacted the court house and said we each had to sign papers.  Once that was done my lawyer got her lawyer license revoked..  so we never got around to bring it back to the judge.  What do I do in this situation??

Three employers are members of a controlled group (A, B, C) and they each sponsor a 401(k) plan with different features.  Each plan passes coverage separately - but barely.

Let's say an employee transfers mid-year from Employer/Plan A to Employer/Plan C, is that employee considered in Plan A only or Plan C only or both plans for coverage purposes?

Thank you for any insights and references!

Do employees with balances under $5,000 have to be given distribution options or can they simply be forced out?  One of my plan sponsors wants to go hyper-streamlining in the distribution process and the day that an individual terminates employment, if they have under $5,000, send them a check and inform them they have 60 days to do something with it.  Assuming only lump sum distributions are permitted, could they do this?  Doesn't the plan sponsor at least have to give them their options and maybe a 30 day window to decide before taking the force out route?  Plus, if over $1,000, the only force out option is an IRA.

Thanks

These audits are ridiculous. After the initial document/information request, the answers to which were properly and timely submitted to the DOL, they then came back some months later with a list of over 70 different requests - and any many of those questions have several sub-parts. All this for a nice, clean little non-audited 401(k) plan.

Our tax dollars at work...

Edited for typo.

A participant would like to prepay the remaining semi-monthly payments for the remainder of the year.  Assume 6 months (12 payments) being made in a lump sum right now to cover all payment from 7/15/19 - 12/31/19.

Assume the participant loan program allows for these ad hoc payments and sponsor is OK with it.  Is this acceptable from an IRS stand point or is it a violation of 72(p)?

I realize 72(p) requires level amortization with payments no less frequently than quarterly but this is essentially paying the payments before they are due not in arrears and will not extend the term of the loan just reduce the overall interest paid. But is this a form over substance thing where it can't be done?

If it was just prepaying the next quarter instead of the next 6 months would this be OK?

Plan was amended effective Jan. 1, 2018 and plan was operated in accordance with these amendments.  For some reason, the actual amendment was signed and adopted until April 2019.  Is there an issue and if so how is it corrected?
 

Plan was amended effective Jan. 1, 2018 and plan was operated in accordance with these amendments.  For some reason, the actual amendment was signed and adopted until April 2019.  Is there an issue and if so how is it corrected?

First time I've run into this. At first glance, it appears to be a form of business structure that allows "sub-LLC's" underneath the overall umbrella of the registered LLC. Specific legal requirements, only in certain states, apparently many unresolved or untested tax/administrative issues, blah, blah, blah.

Wondered if anyone had encountered this in the retirement plan arena? Seems like it would be handled rather like a controlled group - that is, everyone in the multiple "sub" LLC's included for coverage/testing, and one or more groups could be excluded assuming you pass.

We would, of course, have them discuss with tax/legal counsel before setting up any type of plan...

Anyone had any dealings with a "Series LLC" in the retirement plan world?

My employment was terminated 6 years ago. 

I'm just now eligible for distribution but now they saying they will pay me in 5 years installments.  So after waiting for 6 years, now I got to wait another 5 to get it all?    Can they do this? 

We currently have 25 DB /CB Plans we outsource.  Fees are going up with the company we work with plus restatement fees so I want to review current relationship.  Anyone work with a quality company for DB/CB outsourcing work?  Outsourcing meaning they provide contributions, valuations and annual 5500 plus SB & schedules.  Thank you.

Hello,

Based on a unique situation that I never experienced before, am trying to figure out what to enter for Line 8(b).

Scenario (with mock numbers but that captures the scenario).

Starting Balance - 300,000

Contributions - 10,000

Dividends/Interest income etc. - 5,000

Ending Balance - 290,000 (there was loss in value of assets in the plan).

So, question is, on Line 8(b) should I enter    -25,000+5000= -20,000, comes from 25,000 loss in assets values and 5,000 income from Dividends/Interest?

Then starting balance of 300,000 plus 10,000 contribution = 310,000 with loss of 20,000 leads to Ending Balance of 290,000.

Thanks,

Is there a way to make some sort of annual company non-elective contribution just to a couple of participants without running afoul of all sorts of discrimination (or other) rules?  The plan I am looking at already makes matching contributions to all participants but does not make any unmatched contributions.  When you stop laughing, let me know your thoughts.  Thanks so much.

Company A is buying Company B in a stock transaction.  Company B participates in a multiple employer 401(k) plan.  In drafting the merger agreement, Company A wants to take on as little liability as possible associated with B's participation in the multiple employer 401(k) pre-merger.  

Company B will be withdrawing from the multiple employer plan and either 1) spinning off the plan assets into a new plan and immediately terminating the new plan prior to the close of the merger, or 2) transferring Company B employees' assets into Company A's 401(k) plan.

Does a transfer of assets into Company A's plan create any more liability for Company A (related to the plan pre-merger) than if Company B's assets were spun off and that plan terminated?