A profit sharing plan sponsor has appx 2.5 million in their personal accounts and the couple are in their mid-80's.  They will take a hit with estate/inheritance taxes if the funds were ever distributed.  They are wanting to establish a trust and make it the contingent beneficiary.  I am of the opinion this is permissible, but want to be aware of pitfalls, if any, such a designation would result in. Has anyone had experience naming a charitable trust as a beneficiary?

As far as I can see, as of now -- Monday Nov 19, 2:45 eastern -- the IRS has still not yet released the October 2018 segment rates for minimum present value (lump sum) calculations.

In the past, it has tended to post each month's rates by the 15th of the following month, or earlier. I don't track every updates, but I can't recall their being this late before

Has the IRS changed when the rates are released? Or are they out there, but I'm just not seeing them?

Was thinking of trying something new.  How can I change my avatar?  I didn't see anything in the settings.

Our NQ plan allows participants to take a lump sum distribution or elect a 10-year payout at a Normal Retirement age of 59.5 Our industry competitors seem to have a Normal Retirement Age of 55  in their NQ plans.  We're considering lowering the age but are  concerned about complying with 409A. Does it make any sense to consider lowering the age or is there too much risk of 409A violations?

I feel like I must be overlooking a prior discussion around this topic but was not able to locate one in my search.

Plan has highly comped individual that switched jobs earlier this year. He made significant  401(k) elective deferrals at last job before coming to new job.  He enrolled in new plan and has been deferring to new plan for several months now.  Last week, he realized he is well over the elective deferral limit for 2018 and is seeking correction from the plan.  Since this has been discovered in 2018, the record keeper is proposing to correct through negative contributions within the next payroll runs.   Sounds like that is fairly routine (been awhile since I've had one discovered in the same year as the deferral) but am curious as to what sort of paperwork / documentation all this generates.  Also, still trying to get our arms around potential earnings in the account but assume if he has earnings on the excess that will have to come out too?  How does that happen with negative contributions?

I think I understand this, but I'd love any input, 'cause maybe I've got it wrong.

Plan has premium conversion account, and an FSA. Plan document, and plan forms/administration appear to be at odds.

My understanding is this: No premiums can be paid through the FSA. Premiums for group health insurance offered by the employer, or individual policy premiums for "excepted benefits" such as dental or vision, can be paid through the premium conversion account. However, premiums for individual "health" insurance may NOT be paid pre-tax through the cafeteria plan.

First, is that right? The document appears to support this interpretation, yet the forms/administration have been allowing pre-tax treatment through the cafeteria plan for individually purchased HEALTH insurance, as long as it isn't purchased through a federal or state exchange. I believe this is incorrect?

Thanks!

Is a money purchase plan sponsored by a governemnt/government agency subject to the same spousal waiver rules applicable to private money purchase plans?  i.e., must the spouse consent to non-annuity payment of benefits?

Form 5500-EZ wants to continue mailing in paper forms. Owner says he mailed it in on 7/31/18, it was not extended.

He has received a $250 penalty letter for being late (10 days) and cannot find or remember if he mailed it certified.

Question: He did extend his Federal taxes. Seeing as he cannot show evidence of mailing it in timely, can he amend as filing under extension to remove the tax penalty?

Incidentally I find it odd that if he mailed it in 7/31 as said, that the IRS would mark it 10 days late.

One person plan, never hired anyone, no intention to hire anyone, so he is the only participant in his plan. He would like to take out his first loan. I recommended interest rate of prime as reasonable. He wants to know if he can take the loan with zero interest. Is that possible? If not, I've never used a rate below prime, is there something, ie prime-1?

To allow a convenience in collecting the assets of a small estate, some States’ laws permit an affidavit in which one claims she is entitled to the decedent’s property.  Under a typical law of this kind, one might collect up to $50,000 without any court-supervised proceeding.

If a participant dies with no surviving spouse and no other designated beneficiary, some retirement plans provide that the participant’s estate is the “default” beneficiary.

If a plan you administer or serve is in this situation, is the plan willing to pay a taker based on a small-estate affidavit?

If a plan is willing, does the administrator use any extra steps to manage the risk that an affidavit is false (or even innocently incorrect), leaving the plan exposed to claims of the estate’s beneficiaries or heirs?

Or does a plan refuse to pay on a small-estate affidavit?

BenefitsLink people, what are your experiences?

Question,

it is my understanding you can withdraw from a 401k penalty free at 55 if you retire from your job during the year you turn 55.

question, my wife left her job when she was 53, however she will receive bi-weekly severance up until the year she turns 55, her 401k funds are still with the same plan, will she be able to collect penalty free in the year she turns 55?

any help would be appreciated!

Safe harbor match per payroll.  Plan excludes bonuses and vacation pay.  Plan is projected to fail 414(s) test for 2018.

I believe we have to amend plan to include some of the excluded pay.  Question is:  can we amend to include excluded comp for SOME of the employees, not all, under the 11(g) provisions.

Any other ideas?  Thanks!

I have been asked to propose a 401(k) Plan for a business (LLC) that covers a family (father, mother, and child) group. The owner wants to set up the plan solely for the benefit of his daughter, who is an employee of the company and receives compensation that will be reported on a W-2. He and his wife do not anticipate utilizing the plan for themselves.

My question is that if this plan is set up, does the plan file a Form 5500-EZ or the SF Form? The Form 5500-EZ is "Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan. Would the EZ apply because the daughter is an owner by attribution? Or, since she is not an actual owner or their spouse, is the 5500-SF the form to file?

Thanks for any replies.

In a qualified plan, an employer could not say have a 3 year vesting period apply to each year's contribution, which could for example have an employer with 20 YOS but would not be vested in that year;s contribution until she had 23 YOS.  

But if this were a church plan or other non-qualified plan, that type of vesting is acceptable, is that correct?

Per our subpoena, we need to produce a large amount of emails to an auditor; over a few hundred, easily.  How have you guys produced emails in the past?  I can pretty easily get the totality of messages in an mbox format, or .EML, but I'm concerned we're going to need to produce as PDFs, which is going to take an absurd amount of time since batch export to PDF, frankly, doesn't work well.  

I appreciate any input you all may have, as I'm getting pretty concerned.  Our email is housed with GMail, but I can import to Thunderbird pretty easily and export that way, as well.  Thunderbird doesn't export attachments with PDF, however.

I have a client that set up a retirement plan in October 2018. One of the employees makes $400,000 and had already contributed to his deductible IRA in early 2018. Since the employee is eligible for the plan, does this make his IRA contributions made in 2018 retroactively non-deductible?

403(b) Plan sponsor wants to start offering a discretionary match in 2019.  The formula they are considering is dollar-for-dollar match up to $250, determined each quarter.  Participant's could received a maximum match of $1,000 for the year.

They want to throw in a twist:  They participant's can take the match either as a contribution to the plan or have it paid to them as cash each quarter.  Is that acceptable?  I think we could try to do something like this if it was pertaining to a PS contribution and we have each participant as a separate rate group.  But for a match, can that option be available?

Thanks

I have a question on what if any amended 1099R is required in the event the plan issued a premature in-service distribution of the vested account and the participant rolled it over. The Trust will be expected to issue a 1099R with the coding for a direct rollover, however this was not an eligible rollover and the participant is being notified per EPCRS 2-8-52 Section 6.06 that the overpayment is not eligible for favorable tax treatment. Does the recordkeeper issue 2 1099R's with the first being the direct rollover and then the second one being a correction showing the full amount of the distribution as taxable? It was a 2018 distribution and the 1099R will be issued in January 2019 however the distsribution has been made and the 20% tax withholding was not taken. So I would think the recordkeeper should issue a corrected 1099R. The other option is for the recordkeeper to contact the IRA custodian, but that approach does not seem as clean. Has anyone worked on this before or received IRS direction?

Thanks!

Just wanted to make sure I've got this right. IF someone qualifies for this, it is a deduction taken on the individual owner's 1040. In other words, for unincorporated owner you would calculate Schedule C income and corresponding contribution as usual, and THEN, when they file their 1040, they would take an additional deduction from the otherwise taxable income (if they qualify).

I have a client whose assets are in a brokerage account. The owner took a loan and never made payments. They apparently never intended to and now  want it defaulted.  I don't have confidence she is going to have a 1099R produced even though she said that's her intention.  My question is: What are the ramifications/fixes for a defaulted loan on a brokerage account when a 1099R is not done?   We do utilize Penchecks, but that may result in 2 1099Rs. 

Thank you in advance-