I have esop through lowe's my last date of employment was 4/29/1998 over 10 years now I have my statements and I will be 59.5 years of age in November and I would like to cash out, currently lowe's do not handle the ESOP plan any more and went with the 401k plan partners of WELLS Fargo Bank do I go to them or is there another direction?

A client has decided to terminate one of their two pension plans.  They are not merging assets (403b and a 401a).  An active employee who is over age 70.5 has been deferring receipt of their RMD.  That employee has elected to rollover their benefit from the terminated plan into the continuing plan.  We are processing as a rollover and will be issuing a 1099.

Question:  Is an RMD required to be distributed from the terminating plan prior to the rollover?

If the participant were to rollover to an IRA I would say the RMD is required, but I cannot find if there are any exceptions since it’s the same sponsor.

Any input is appreciated.

the participant is 72 (already reached RBD).  ex wife does not receive her share of account pursuant to QDRO until 2017. does ex spouse have to pay her share of the 2017 RMD?  she had no account to value as of 12/31/2016 therefore i would say no RMD due from her. anyone agree or disagree?

We have a plan where the owner (more than 5%) started to participate in the plan when she was 72 years old (in 2015). When would be her RBD for the first RMD distribution?

In 2015, she made some contributions, but had no required RMD, because her 12/31/2014 was $0 in the plan.

In 2016, she is required to take an RMD because she has a 12/31/2015 balance. Does her first RMD in the plan have to be processed by 12/31/2016 or 4/1/2017?

This seems like a unique situation because the owner started to contribute to the plan after turning 70 1/2. The regulations state that the RBD for owners is April 1 following the year in which the owner turns 70 1/2. However, would be RBD for this participant (who at the time of the first RBD) is over 70 1/2 be April 1st of the following year or 12/31/2016 of the same year since the participant is over 70 1/2 at the time of the first RMD?

Thank you.

the Sept CPI-U was released today

so we should see

deferral = 18500

comp 275000

415 limit 55000

DB 220,000

no change to Key ee and HCE, they were very close

no change to catchup

(with my 'useless' spreadsheet)

indexed limits.xls

Hi, 

Hoping for some wisdom.

Plan has loan policy saying a participant may only have 2 outstanding loans at a time with the stipulation that one of the loans has to be a primary residence loan.  Sponsor is not involved in loan process having delegated all things loan related to vendor.  In 2016 vendor issued second loans to 3 participants that were not residential loans.     Sponsor would prefer not to ask participants to repay the second loan, though would be open to a refinance of the first loan if possible.   My only other thought is to retroactively amend loan provisions, but I believe this means going through VCP as this situation doesn't meet self-correction by plan amendment.

Thank you in advance for any thoughts.

Can a Qualified Plan invest in foreign ordinaries.

Seems to me that would be an investment not subj to US courts (like ADRs) so that answer would be no but I really don't know.

Any one know the answer?

Thank you

Does having a negative balance in my flex spending account allow my employer to say I am not qualified for COBRA? Thank you for you answer.

A 403(b) plan currently has a non-elective employer contribution.  It is proposed to implement a soft freeze on this formula, allowing existing participants to continue to receive the non-elective contribution while new participants will receive a matching contribution.  Can this new contribution be designed as a safe harbor match?  I guess the technical point is can the plan be restructured into two component plans for the different employer contributions that each satisfy 410(b), and then satisfy the safe harbor match requirements by including only those participants eligible for match (i.e., only the new participants)?

Thanks.

Does anyone know if the award instructions in a QDRO need to be clarified (e.g., the parties' intent regarding how to treat the loan balance, to include it or not in determining the balance), can the two divorcees submit a letter with both signatures?

I have cross tested Profit Sharing and Cash Balance plans. The plan sponsor did not make the minimum required contribution by 9/15, so they will be paying the 10% excise tax on the unfunded minimum. Now, the plan sponsor is also saying they are unable to make the minimum required profit sharing contribution for their employees- safe harbor, top heavy, and gateway. What happens if they do not make this? Are there penalties like the CB plan or is the plan disqualified?? 

We have a plan sponsored by a licensed speech therapist.  I am told she has a PhD but is not a medical doctor or psychiatrist.  Would this be considered a professional service organization and exempt from PBGC, or would this be subject to PBGC?

A client let it slip today that the employment contract for two of their new employees prohibits them from participating in their safe harbor match 401(k) plan.  At their request, the plan (effective 1/1/16) has immediate eligibility and no excluded employees.   So, both employees are participants.  Both are non-owner doctors hired late enough in 2017 year that they will be NCHEs for both 2017 and 2018. I'm trying to sort though potential problems.  So far, I have:

1.401(k)-3(c)(6)(i) says it's not a safe harbor match if there are restrictions on NHCE deferrals other than those listed.   This doesn't fit any of the allowed restrictions, so I read it as goodbye safe harbor.

I haven't seen the employment contract, but I will be shocked if it contains a one-time irrevocable election under 1.401(k)-1(a)(3)(v).  Besides, the plan does not allow such an election.  So, it appears we either have an operational failure or the employment contract provision is a CODA.

Does anyone see anything I missed? or have any additional comments?

What code is used on Form 1099-R when rolling over pre-tax qualified plan assets to a Roth IRA?

I could not locate any reference in the 1099-R Instructions.

Does anyone have an ESOP client (unleveraged) that allocates dividends on any basis other than share balance (e.g. comp or hybrid).  If so, has the client survived an IRS/DOL examination without challenge?

We have one takeover client that allocates dividends based on comp (and am anecdotally aware of others that do so).   While the client negotiated the allocation language with the IRS and was issued a favorable DL, the plan hasn't been subject to a more rigorous audit/examination.

Grateful for any insights and comments!

So after deferrals stop for 6 months, who is to initiate the re-start of elective deferrals?  Seems the plan sponsor would monitor this and automatically re-start upon the expiration of the 6-month period.  Or I can see asking the participant to complete a new election.  Thoughts?

Employer offers HDHP with maximum family deductible and out-of-pocket of $13,100.

Employer funds maximum HSA for family coverage of $6,750.

Can employer also offer a Medical Expense Reimbursement Plan for the spread?

Thanks.

Bob had a SOLOK, and died.  He was not married and had no children.  He had designated his Living Trust as his beneficiary.  It is my understanding that the benefit due to be paid into his Living Trust is not an eligible rollover distribution, and the executor of the trust can submit a W-4P to elect no FIT.  Then the benefit would be paid directly to the Living Trust, and from there, paid out according to the terms of that trust.  Is that correct?  

I thought it was prudent but not required to provide participants of notice the plan was terminating.

However, today I found the following on the IRS website.  Did I miss a change?

https://www.irs.gov/retirement-plans/retirement-plan-participant-notices-when-a-plan-is-to-be-terminated

Page last reviewed/updated August 3, 2017.

When a plan is to be terminated, participants should receive a written notice of the company’s intention to terminate the plan and a notice of plan benefits. See Terminating a Retirement Plan.

Notice of intent to terminate the plan

Description: Written notification that the plan sponsor intends to terminate the plan or cease benefit accruals.

What it should contain: The notice should contain sufficient information to notify the participant of the termination of the plan. The notice might include identifying information such as:

• the plan name and number;
• the proposed termination date;
• a statement concerning the cessation of accruals (benefit accruals are ceasing); and
• a statement that there are sufficient plan assets to meet the accruals provided under the plan.

Timing: The notice must be provided to all affected plan participants and/or beneficiaries at least 60 days and no more than 90 days before the proposed date of termination.

Who is responsible for sending it: The administrator of the plan.

Notice of benefits upon termination of the plan

Description: A notice to each affected participant or beneficiary that specifies the amount of the participant’s benefit as of the proposed termination date.

What it should contain: The notice should identify the amount and form of each participant’s benefit including any personal data used in determining the amount of the benefit, including lump sum conversions, mortality and interest rates used to compute the benefit.

Timing: Promptly to any affected participant or beneficiary after the proposed termination date and on or before the distribution date.

Who is responsible for sending it: The administrator of the plan.

Form 5330 has places for the filer (plan sponsor) and paid preparer to sign. It's not clear to me from the instructions if both of them need to sign. Do they?

Also, I see that the Form 5330 instructions only provide a mailing address for filing, which suggests that they need original signatures, but the instructions also allow for the paid preparer to electronically sign.

Is it true that this form must be mailed and that the plan sponsor's signature must be a wet signature?

Thanks for any responses!