I know this has been discussed on the boards before, but I'm not finding any definitive answer about how to determine if a 403(b) plan is subject to the QJSA rules. Lets say I have an ERISA 403(b)(1) with an annual discretionary matching formula. The plan has never had a transfer in of moneys that are specifically required to offer annuities as a normal form, the plan pays a deceased participant's entire vested benefit to the surviving spouse and choosing an annuity is not a distribution option for participants to choose from. Could my plan still be subject to the QJSA rules? Why?

participant has a 150,000 account balance in a 401(k) plan.  the plan allows one outstanding loan at a time.

lets assume the participant took out a 50,000 loan in 2015.  the current loan balance is 20,000 and the highest outstanding loan balance in the past 12-month period was 30,000.

the participant wants to repay the existing loan balance of 20,000 and take a new max loan.

is the new max loan (after the repayment of the existing loan) 20,000 or 40,000?

50,000 - (30,000 - 0) = 20,000 or

50,000 - (30,000 - 20,000) = 40,000

I was thrown off guard by a client wishing to have age 21, no waiting period but quarterly entry dates. Basic eligibility 101 but is this possible?

Client operated DC plan since 1983 as single employer plan with multiple adopting employers within the controlled group.  Discovered in 2016 that adopting employers were not, in fact, in a controlled group, resulting in the plan really being a multiple employer plan.  Client restated plan in 2016 (VS document) indicating that it was a multiple employer plan.  Throughout the life of the plan, all adopting employers signed participation agreements.  Question - is this a failure that we need to correct through VCP?  Is this a document failure going back to the original effective date?  What parts of the plan should be amended to reflect "multiple employer" status.  Any thoughts?

There is some debate regarding a vesting question: 

Plan B is merging into Plan A effective 1/1/2018.  The vesting schedule for Plan A is better at every point.

The plan sponsor wants to have the old (worse) schedule apply to the old money for all merging participants.

Two questions:

1. Does the merger with different vesting schedules constitute an amendment of the vesting schedule?

2. Must the new (better) vesting schedule apply to old and new money for a participant who works an hour of service after the merger date?

Non-owner participant has continued working past 70 1/2.  Plan has delayed RMD rule for non-owners.  Participant is retiring on 11/30/2017.  First RMD for this participant is due by 04/01/2018.  Termination and retirement distributions are normally done some time in May after the client has determined the allocation for the prior year.

If the plan pays the participant an RMD now (in 2017) based on the 12/31/2016 balance and then the participant elects next May to roll entire remaining balance, must another RMD be made from the Plan account based on the 12/31/2017 balance before rolling to the IRA?

I'm not sure if I have a question or am just musing; here goes...

When converting a self-directed plan we have several options:

1. Cash conversion.  Everything in the old platform is liquidated, and participants make new investment elections and their money is invested according to those elections.  I think this is best from the participants' standpoint, since they get to pick what they want.
2. Mapping.  Everything is liquidated and mapped to "like" funds.  This seems to be preferred, and I guess is "ok" from the participants' standpoint, since they are more-or-less getting what they elected, even if it may have been some time ago, and even if "like" may be stretching it.  We're working on one now and it's interesting that the receiving platform doesn't want, and is more or less insisting, upon not having an enrollment meeting until after the conversion, basically to streamline everything.  Participants will be notified and can change investments in the sending platform, before the conversion, so they'll have that opportunity, but I think it's kind of a crappy way to handle it; I mean, it puts all of the burden on the participants to get things lined up ahead of time when they haven't even had a re-enrollment meeting.
3. Target date conversion.  Everything goes into TD funds unless participants choose otherwise.  My hangup here is that if you have the enrollment meeting before the conversion, and if someone elects something other than the TD default, then someone is supposed to identify that and change that election manually.  Definitely not good for the "someone" who has to manually check all that.  It seems like a mistake to have an enrollment meeting first because it creates that burden.  OTOH, going back to #2, I think it kind of sucks for the participants because they're not given any choice in the matter, and then have to actively go in and change things if they want to. 

I guess the Q is, am I off-base, p*ssing into the wind on all of this, or...?  I guess the latter have become industry standards and I should just accept it.

Can a stock option award be amended to extend the term AFTER the original expiration date? Set aside any ISO/NQSO and accounting issues for now, I'm just trying to determine if it can be done.

Award agreement states that option expires upon the earlier of 10 years from the date of grant, or the expiration date shown on the grant notice.  Grant notice shows a date about 3 months earlier than 10 years from date of grant (related to date vesting begins). 

Example:

- Grant date: 12/31/2007

- Expiration date (as shown in grant notice):  10/1/2017

Can this award be amended to extend the expiration date to 12/31/2017? 

Is there a list or can someone point me in the direction of a resource that would detail the required notices for a One-Participant Retirement plan?

Thanks

I have a client who is taking Stock out of a previous employer's 401(k) plan. The data given to us from the distributing plan was broken down between Prior to 2016 and After 2016 amounts and cost basis data. The sources of money are after tax and company matching. Why would the 2016 before and after be significant?  Any ideas? 

Quick question:

When filing the Form 5500 for a plan AND when paying taxes for the plan; are both instances paid under the company's EIN # or the Plan's EIN #?

TIA! :)

I have a scenario that I need help with.  My parents divorced back in 1996 and as a part of the Divorce Decree there was a Consent Order stating that my father in these exact terms quoted: "shall pay the legal fees for and cause to be drafted as part of the decree a QDRO directing the Federal Office of Personnel Management to pay to the wife, son the husbands retirement, one half of the marital portion of the Husbands net annuity and, further, in the event of the Husband's death, to pay to the Wife a survivor's annuity based on the marital portion of the Husband's annuity."  It then goes on to give a formula for how the "marital portion" is to be calculated.

In 2003 my mother died unexpectedly and I settled her estate.  I never knew that there was a divorce decree until last month when I had to search for the file because my father tried to claim her retirement benefits from her previous employer and I had to send it in to show that they were divorced and at that time after receiving the divorce decree info I ended up also finding out  that he also waived any right he had to her retirement benefits in the same divorce decree.  After seeing this divorce decree and the Consent Order within it I have a few questions that I am hoping that someone here can give me some direction on:

1)  How can I find out if a QDRO was ever completed?

2)  Under these circumstances, would I, as my mothers only child and heir, inherit the benefits from the QDRO?

3)  Based on the Wording in the Decree it was my fathers responsibility to get the QDRO completed and paid for.  If he never did can it still be required of him to be done post my mothers death by her estate and how would I go about doing this?

Other possible pertinent information:

My father is a federal government employee

He has not retired yet but may be doing so within the next few months

The divorce and everything pertaining to it was done in Washington DC

My mother died in North Carolina and my father is a Maryland Resident.

If you have any additional questions that could be helpful to giving some direction please let me know.

Any Direction that can be given here would be of great help.  Thank you in advance.

Let's assume the following:

1. We have a 401(k) plan participant that has $25,000 in his account which is all 100% vested.

2. He decides to take a $5,000 loan.

3. Assume no additional contributions and/or earning to this account.

4. He fails to make the repayments and is issued a 1099-R for the deemed distribution in the amount of $5,000.

5. The loan amount of $5,000 will stay in his account until he either repays it, in which case he will have basis, or the loan is offset by his accrued benefit, in this this case $20,000 once he is eligible to receive a plan distribution. 

He now terminates from the plan with a $20,000 cash balance and a $5,000 participant loan receivable. At this point, his loan balance is offset by his accrued benefit. How much does he get? $20,000? $15,000? Also how is the final 1099-R handled? How would this offset be reflected on the 5500? 

Client has 2 plans.

Thought he efiled both plans for 2014 in 2015. We recorded both as filed also

Definitely efiled both plans for 2015 in 2016 and we recorded same

Filed 2 plans in Oct 2017. We noted one plan still wasn't filed. Told him to go back and file 002 which he did

He just got a IRS penalty notice for 001 for 2014 for $15,000

System now says 2014 5500 for 001 was not filed in 2015. First filing he made in 2017 was the 2014 form that was still in the system

2 questions

Is it worth it to try for reasonable cause or system or human error, he filed the other and thought he filed both etc

If DFVC is the best way to go, should it be filed again with just the DFVC checked?

I know this has been kicked around but i couldn't find concensus on either question

https://www.aicpa.org/interestareas/tax/resources/compliance/downloadabledocuments/due-dates-summary-chart.pdf

What did they do?? This is so complicated... Does anyone know of a website where you can etner the details (entity type/fiscal year end) and the system will spit out the due dates??

We have some deferred compensation awards, subject to 409A, that were granted in 2016 and we've discovered they violate 409A.  The errors are such that they cannot be corrected, so several participant are in violation of 409A and subject to the 20% penalty.

Now we  have corrected the plan errors going forward and would like to award some of these participants similar awards for 2018.  If we do that, will the 2016 and 2018 awards be aggregated, such that if the 2016 awards violate 409A, so will the 2018 awards, and ALL that deferred comp is subject to the 20% penalty?

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Over a year ago, someone posted the below message.  There were no responses, but I am hoping to get some feedback for this exact scenario. Please let me know if you have any thoughts. 

Company A (surviving plan) acquires Company B and the plans will be merged effective 1/1/2017. For the company match, Company A (surviving plan) has a 1-5 year graded vesting schedule and Company B has a 4 year graded schedule.

Can Company B increase the existing matching vesting schedule to 100% vesting for existing participants and then be on the same vesting schedule as Company A (surviving plan) for any new matching contributions effective 1/1/2017?

Or does the merged plan need to keep the Company B employees who were eligible before 1/1/2017 on the more favorable 4 year graded vesting schedule

In a profit sharing plan that had reallocated forfeitures, three of the participants were allocated one cent in forfeitures. Does anyone have experience making a check payable to the participant for one cent? I see another participant has a balance of thirteen cents and while it is small, that isn't as bad as one cent. The small reallocation came from a relatively new participant who received their share of reallocated forfeitures, was not fully vested, and then terminated their employment, thus creating a forfeiture of that small amount. We are lucky there was no loss in the plan or their one cent could have dropped lower.

Hello, 

A participant is demanding a copy of the Adoption Agreement. She was provided will all the other required notices. Here is her email response. I have researched and all parties I have spoken to state that the employer has discretionary choice to provide the Adoption Agreement. Has anyone encountered this and what was the response?