1) Does family attribution apply with RMDs?  In other words, a 70.5 year old man is an employee of his wife's company.  Is he considered "more than 5% owner" for RMD rules?

2) If someone starts taking RMDs, and later discovers she doesn't have to (never should have started), does she have to keep taking RMDs each year?

Thanks all.

Client's plan sets normal retirement age at 59.5.  We have 6 active employees, all over 59.5, who are invested in the guaranteed rate investment option in the plan.  Per the group annuity contract, if a plan participant takes a non-benefit sensitive withdrawal from the guaranteed rate option, the withdrawal is subject to a market value adjustment.  The market value adjustment formula is punitive. 

The annuity contract specifies that "Participant retirement, as defined in the plan document" is considered a benefit sensitive withdrawal.  The plan document also allows in-service withdrawals at 59.5.

I'm interpreting this fact pattern to say that if I recommend to these 6 participants that they roll over their moneys in the guaranteed rate option to an IRA, that they should all be able to do so without imposition of the market value adjustment.  And they don't have to retire to do so, they can continue working and contributing to the plan.

Is my interpretation defensible?

Interesting question, I think.  (Maybe not!)

In determining HCE status, Employer does NOT make the top-paid group election for its five 401(a) plans.  It is desirable for coverage testing that it not make that election.

Does the "consistency" requirement of the top-paid group election rules mean that the Employer cannot make the election for any of its non-401(a) plans where HCE status is relevant?  In this case it is for a 129 plan. 

Hi- I am at the point I am going to need to take a $8000 401k hardship withdrawal to pay medical bills. I will be paying a penalty and taxes on this  My question is, can I then deposit the money into my HSA account and reimburse myself tax free for these medical expenses?

A plan sponsor has been notified by Social Security that 2 of its employees have invalid SSNs. These 2 employees have worked for the plan sponsor for several years, W2s have been issued, and both are Plan Participants.  This recent notification has come as a surprise to the plan sponsor, given until now there has never been a notice of any kind. The plan sponsor asked each employee if the SSN being used was provided in error and if either has another SSN (either due to typo or ascertaining a valid SSN) - to which both said the SSN the plan sponsor has on record is correct and that they have filed tax returns... the plan sponsor is still trying to get to the bottom of this.

Qs: If either or both are in fact illegal aliens using invalid SSNs (stolen or otherwise), are they entitled to their plan accounts? If so, what taxpayer ID number would the plan need to report on 1099R when distributed, or would the Plan use the one on record currently even though it is known to be invalid? If not, is it a forfeiture or is there some other action necessary?

Thank you for any insight anyone can share on this matter.

 I have a client whose SEP Plan was recently audited by the IRS resulting in corrective contributions to employees.  As part of the closing agreement, the IRS wants the client to adopt a prototype SEP plan document and also provide notice to employees of their benefits.  Anyone know where I can find a sample notice letter?  Just want to make sure I don't leave anything (important) out.  Thank you!

Need to file 5500s back to 2002 for a small plan.  Have a few questions.

Will all the filings appear on EFAST2 for public viewing?

If so, how should the Schedule P be handled since it requires a signature and will be attached as a PDF?  Should it be treated as an SB an only have the fiduciary's initials?

Participant A is age 77, so he has been taking annual RMDs for 7 years. In his first RMD year, he took out his RMD in December. Every year since then, we have advised taking his RMD in December and not any earlier to satisfy the "generally consistent" annual annuity distribution that he would be receiving from an insurance company if his annual annuity came from such as source.

Now, he is really pressing us to allow him to take his RMD earlier in the year. Can we make some sort of one-time adjustment to allow this? He would like to switch to taking his annual RMD on March 15th every year.

Let's say the plan failed ADP testing and a participant has both Roth and Traditional sources. If the plan document does not state the order in which the corrective distributions should be done, how would you process the corrective distributions? Would you process it proportionately from each source or would you start with Traditional source first and then do Roth source if the amount exceeds Traditional source.

Thank you. 

So we have and existing 401(k) plan that wants to add a SHNEC, this can not be done mid year?  I assume it needs to be started January 1 for a calendar plan year.

Is there a 30-day notice requirement for simply adding a new fund to a 401(k) lineup, not mapping any assets to it? 

We submitted anonymous VCP in 2017 when the fee was 10k but under the new procedure the fee is only 3.5k.  Is there any provision to apply the new fee schedule?  The VCP process is ongoing.  Thanks!

Employer has partial withdrawal from Central States followed 2 years later by a complete withdrawal.

In calculating liability under the partial withdrawal, Administrator included 2007 & 2008 in calculation. On Complete withdrawal 2 years later, actuary is still including 2007 & 2008 contribution & UVB in calculation. Shouldn't the "first 2 years" drop off when calculating the "Complete Withdrawal" ?

thanks for any insight or citations

Plan loan policy calls for a "level amortization" and repays made through payroll deduction.

Is the plan required to allow a paticipant to pay extra odd amounts (through payroll) if they choose?

As an example, weekly repays are $88.52 and the participant wants to increase that by $20 and pay $108.52 weekly.

PA is tracking the loans and not the investment vendor, which means the PA would have to keep track of the "extra" repays and where they apply, presumably principal only.

thoughts?

Participant under age 591/2 and Roth 401k started in 2016.  Wants to take a $13,000 distribution from her Roth 401k account at this time.  Total contributions to the Roth = 21,896.36 and there is currently an overall  loss on the Roth account of $998.15 - i.e. her balance is only $20,898.21.  How does her 1099-R get set up to account for the loss on the Roth money?  I don't see how anything is taxable to her on the $13,000 distribution since she has taken a loss on the account.  Is that correct?

What say all of you about terminating plans and the current restatement cycle? 

Assume the documents have amendments to bring them other wise up to date, just not restatements. I have a couple of different scenarios. Are document restatement required in any/all of the following circumstances. There has been some debate among our actuaries and senior folks. 

A. Plans that are terminated and completely paid out as of today, but the plan termination date was AFTER the restatement cycle started. 

B. Plans that are terminated and NOT completely paid out, the plan termination date was AFTER the restatement cycle started. 

C. Plans that are terminated and completely paid out as of today, the plan termination date was BEFORE the restatement cycle started, but final payouts occurred AFTER the restatement cycle started. 

D. Plans that terminated AFTER the restatement cycle started, but distributions will be complete BEFORE the restatement deadline. 

When was the termination amendment? Before or after the restatement cycle started?

When are distributions complete? During the restatement cycle or after the restatement deadline?

They have an employee who (it seems) has discretion as to when to be paid on a W2 and when to be paid on a 1099-Misc.  As we know, 1099 income is not allowed for plan purposes.  Thing is, he has been ‘deferring’ from his 1099 income throughout most of 2018 and continuing into 2019.  (This may have happened in 2017, also)  I believe that the 1099 ‘deferrals’ should be considered a Mistake of Fact and the funds should get sent back to the company.

In the past, we have only been considering his income and true deferrals from his W2.  Using only that compensation, he is definitely a NHCE.  However, if we consider his roughly $150k in 1099-MISC income, he is way over the threshold.

So, I’m not sure what to do.  

(A)    Send the 1099 deferrals back and leave it as it is.  
(B)    (A) + consider the 1099 income in my testing and make him an HCE (2017 test will probably fail now).
(C)    Consider both the 1099 income AND deferrals in my test.

Your thoughts are appreciated.

We have a client where we review their ADP/ACP tests and prepare the Form 5500.  The client determined that the ADP test failed and they refunded the approximately $1,500 back to one of the HCE's.  The problem is that the client did not perform the tests properly and the Plan did not fail the ADP test.  Thus, there should have been no refund.  

We now have a situation where deferral money was distributed to a highly compensated participant who was not eligible to receive a distribution.  I am clueless as to how to fix this.

Any thoughts out there....

Can a plan termination be undone by a simple sponsor resolution? If it's a db plan could it also be unfrozen in the

same resolution?

(1) how does one convert a 412(e) plan to a non fully insured plan? Can it be accomplished simply by not making premium payments?  (2) if a fully insured plan is frozen for a year can it be resumed or does it lose the level premium requirement by doing so? (3) what are the options for getting the life insurance out of the plan?