I need a little help from anyone who has some reference material from way back.  What year did the eligibility requirements drop from age 25 to 21.  In a plan termination audit by the PBGC I was asked to provide an explanation as to why someone did not enter the defined benefit plan until 4 years after their initial employment date.  I do not have census information for the early 1980's so I can only speculate that it had something to do with the change in eligibility requirements.  This individual was only 20 when he was hired.  I do not have a copy of the original plan document.

"S" corporation shareholders are wife. Husband and daughter. They opened a self directed 401k with profit sharing for the business. In lieu of making salary deferrals they want to contribute real property (land). This land will come from a  partnership which is same husband, wife  daughter ownership. How can this be done. Then they are wanting the "s" corporations match to be land that the "s" owns.  How can they make contributions without a salary deferral? How are they going to put land into three different 401k accounts? 

A TPA who is not responsible for providing payroll services sets up a 401k plan and instructs the employer more than once in writing that deferrals are taken from/come from participants' paychecks and are tax deductible.  The employer, being a thrifty sort, does her payroll herself on Quickbooks and does not indicate such to the TPA. 

A few years down the line, after making deferrals most years, she figures out that they were incorrectly contributed from her corporate account rather than from her paychecks and her accountant never deducted them on the business returns.  She also paid federal and state income taxes on her unreduced W-2s.  Now she is blaming the TPA for just assuming that she was using a professional payroll service and not specifically instructing her how to process the deferrals on Quickbooks.  The accountant, who probably put her up to this since he must now charge her to make it right, is also taking the same stance.  The TPA believes the accusations are inappropriate for various reasons, including the belief that it's on her since she decided to do her own payroll without realizing all that's involved.  I am curious as to what TPAs think about all of this and what details they usually provide on this matter during the installation process.  Thanks in advance for any assistance.     

Completing a Form 14568-D for a VCP submission. My question is, do I leave the box empty that is asking for the plan number?

I found no instructions for the Form 14568 Series.

(Instructions for the Form 8950 submission say to enter 990 as the plan number.)

A plan is transitioning into our platform from another provider.  We provided blackout notices to (mostly) everyone.  Due to a census snafu, a terminated participant was not included in the notice distribution.

Now he is calling the broker saying no one told him his money was moving.  The broker is yelling at us saying we are in violation of ERISA.  (BTW, we provide 3(16) Administration)

What is the remedy besides sending out the notice and typing up a mea culpa?

The violation isn't self-reporting is it?  Do you think we are not he hook for $131/day?

If a plan document allows forfeitures to be used to fund corrective contributions for missed deferrals and associated match, may forfeitures also be used to fund the attributable earnings on those contributions?

Took over a client - whose 5500-SFfor 2017 was filed using an incorrect EIN.  They have terminated the plan after only two years... (no money) and I assume I need to amend 2017 before I file the FINAL 5500 for 2018 using the correct EIN.  I am just wondering if I only  fix 2018 and mark as FINAL if that will be confusing to the DOL/IRS.  

Opinions?  

How is 5 years of participation figured if a plan restricts in-service distribution to age 59 1/2 and 5 years of participation?

What little information I could find seems to indicate using elapsed time, 60 months.  Is it permissible to count 5 years for someone with a 7-1-15 entry date as 2015, 2016, 2017, 2018 and 2019 to consider this 5 years of participation?  The plan document says 5 years, not 60 months participation.

Partnership has a calanedar year plan  putting deferrals for 2018, for partners in on July 1st.  How do you think the IRS would view this on an audit?

If an ESOP adopts an amendment and switches from forfeitures only after a 5 year Break in Service to forfeitures effective immediately if a participant takes a cash distribution, how do you treat prior terminated employees? It seems you can’t forfeit their shares until the 5 year BIS even if they earlier took a distribution. 

Attorney X had a one-participant profit sharing plan at Fidelity for his one person law firm until he established a partnership with attorney Z on Jan 1 2018.  The merged company adopted the plan (as successor employer) of the attorney Z (who is our client) as he already had a cross-tested 401k with a number of employees (all of whom were employed by new partnership).

Anyway, attorney X , unaware as to how all this worked, made a $15,000 contribution in May of 2019 to his OLD plan, despite the fact that he had no income from his prior sole proprietorship in 2018 or 2019.  A contribution for the new partnership for 2018 is still being determined.  Attorney X wants to fix his mistake before rolling over old plan assets to new plan - but I'm not sure what kind of mistake or error this should be classified as in order to determine the proper correction method.  Any help greatly appreciated???

Thanks

A 501(c)(3) Employer maintains a 403(b) annuity with employee contributions only as well as a profit sharing plan with a fixed formula of 3% of compensation.

Apparently the two plans were never coordinated and one has recently learned of the other.

As far as 5500s, since the 403(b) contains only employee contributions, no 5500s have been filed; 5500s have been filed for the profit sharing plan each year of its existence.

We do not handle any 501(c)(3) organization plans, but something seems a bit "off" here, and think it should be corrected, but how???

Hi to All,

We just got a phone call from HR lady of our client to say that a certain participant who has a participant loan is in the process of dying of pancreatic cancer and has been out on medical leave for the last 6 months.  He's not really expected to ever come back to work, but she hasn't really officially declared him to be terminated, either.

The participant took out a participant loan on 12/18/2018 in the amount of $11,650.00.  He made two bi-weekly payments of $119.40 on  01/14/2019  and  01/22/2019.  He went out on medical leave at that point and has not made any more payments.  This quarter ending June 30 is his cure period and so far he hasn't made a payment.

HR lady wants to know what his options are.  Can he make some little tiny payment like $100 and get another cure period running July 1 to September 30th?  Could he do that twice and thereby keep his loan from going into default in 2019?  I think she's asking if he can just keep this thing running until he actually passes away and then it becomes someone else's issue at that point.  All the situations I have seen so far were "all or nothing" - the person was either making payments, or stopped.  I don't know what happens when someone pays a little something but not enough to bring a loan up to date.  Of course I know that the loan is supposed to be paid within 5 years of the loan initiation date, but does it get re-amortized each quarter, with higher payments, such that it would still be paid off theoretically within the original 5 year period?  Is that even permissible?

He could, of course, just let it default and pay the taxes on the deemed distribution at the end of 2019 if he's still alive and has the money to pay them.

Any of your thoughts and experiences will be appreciated.  Thanks in advance!

401(k) plan has designated Roth accounts. Participant receives a QUALIFIED distribution - over 59-1/2, over 5 years.

Reported as a 7 B on 1099-R. IRS is saying it should be a code "Q." When you look at the 1099 codes, "Q" specifically states that it is for a Roth IRA. There is no letter code for a qualified distribution from a designated Roth account.

Are we wrong? I can find nothing to indicate that this should have been reported as a code "Q."

Thanks.

A doctor, who recently passes, adopted a 412(e)(3) Plan in 2014, funded the first year, but not the three years following, as such he froze the plan in 2018.  Note: we urged him to freeze the plan, in 2016 when he didn't fund the 2015 benefits.  He didn't want to, he stated he wanted to fund the plan, after three years of not funding, he finally allowed us to freeze the plan in 2018.  After that he was ill and could no longer fund the plan.  We were going to terminate our services if we could convince him to fund the plan, but he since passed away on May 30, 2019.

The brother of the deceased owner, is trying to keep the business open and ownership transferred to his name, but he refuses to fund the plan.

Has anyone dealt with a plan that is not covered by PBGC, not fully funded and the sole owner/trustee has passed? 

Can we force the business to fund the plan?

Can we go to his estate get the plan funded?

Can we just pay out the NHCEs with the funded assets?

Any help would be greatly appreciated.

Thank you.

If an alternate payee is also a participant in the 401(k) plan that is subject to a QDRO (i.e. the divorcing couple work for the same employer and both participate in the same plan), must the plan create a separate account for the alt payee, or may the plan transfer her QDRO award into her existing account under the plan?

Thanks for any insight on this issue.

Code 3b - Use this code if the plan covered self-employed individuals in the return year.  Does this mean if someone was a Schedule C or K1 employee (not w2) in the Plan?  Thank you.

In IRS 417(c) - QPSA - Spousal Benefit it is stated:

"A qualified plan, like a defined benefit plan, money purchase plan or target benefit plan, must provide a QPSA to all married participants unless the participant and spouse consent in writing to waive the QPSA."

"it must give a participant a QPSA notice during the period beginning when he or she is age 32 and ending with the close of the plan year before the participant is age 35,or within one year from when an employee becomes a plan participant if he or she is hired after age 35."

Is this practically true that as practitioners we must provide the QPSA notice for all affected participants of all the DB/Money Purchase/Target Benefit Plans that we administer within the applicable QPSA election period as stated in the code?

Does it mean the surviving spouse will receive a lump sum instead of annuity if a participant/spouse consented to waive QPSA in writing and the two were married more than 1 year when the annuitant/the participant died before retirement?

The 403(b) regulations require 403(b) plan sponsors to provide an effective opportunity to eligible employees to make 403(b) deferrals to the plan.

According to 1.403(b)-5(b)(2), this requirement is satisfied by providing a notice to the employees at least once a year that tells the employees that the 403(b) plan is available, and also tells them how to make or change the amount of their 403(b) deferral election.

1. What does this annual universal availability notice referenced in the regulations look like? Is there a published or sample form?

2. If there isn't a published or sample form, what other types of notices and documents satisfy the annual universal availability notice requirement?

3. When is the annual universal availability notice distributed? Does it have to be no later than 12 months after the last notice, or literally no less than once per plan year? (For example, is a notice provided in January 2018 followed by a notice provided in July 2019 okay?)

4. Are all eligible employees supposed to get the annual universal availability notice every year, regardless of whether they are actively deferring to the plan or have previously declined to defer?  If yes, what if they're currently in the midst of a deferral suspension following a pre-7/1/2019 hardship distribution? Or, what if they've just exited a deferral suspension due to a pre-7/1/2019 hardship?

5. Do plan sponsors need to get employees's signatures or otherwise record the date that they sent the notices to eligible employees and the date the eligible employees received the notices in order to document that they have satisfied the universal availability requirement?

An employer that is fully owned by one individual sponsors a qualified plan in which several employees participate.  This individual has also set up a separate shell LLC (in which she also has 100% ownership) that does not perform any business transactions, and for which no business tax returns are ever filed.   She does not receive any income from the shell company, and it does not have any other employees. 

I'm trying to determine whether I should indicate that the plan sponsor is a member of a controlled group on the 5500-SF.  Is just signing a document establishing the shell company the only thing needed for it to be considered a controlled group member?  Or would it also need to first have an EIN issued?