Owner died last week. 2024 RMD has to be processed to his wife (not his first RMD). Can she request the entire amount, $55,000 plus, be withheld as taxes?  TYIA. 

The Notice says the Plan seeking recoupment notifies the recipient plan and the participant of the overpayment. It states the tax consequences and how the overpayment can be transferred back without the participant incurring taxable income.  What I do not see is authorization for the recipient plan to just transfer the money back without the participant's consent.  Can the recipient plan transfer the funds back solely on the basis of the notice and the Notice?  That is, can this be done without liability to the participant?

A minor (17) qualifies for medical benefits under ACA (just a hair over 30 hours) during open enrollment. Wont turn 18 until April. Can we legally offer them their own benefits even though they are not yet 18? Or, do we have to wait to offer until they turn 18 in April? They work in a state where the # of hours worked is not an issue (they earned the minimum hours all within the labor laws). I worry we will be out of compliance with ACA if we don't offer it during open enrollment since they are flagged but have also never offered benefits directly to a minor before.

I've not seen definitely how the age limitation works.  It is clear that someone who is age 59 on 1/1/2025 and turns 60 in 2025 are are eligible for the additional catch-up.

What about the person who is 63 as of 1/1/2025 and turns 64 before the end of 2025?  Things I read seem to say they must be 60-63 by the end of the year and might not be eligible for the catch-up if they turn 64 by end of year.  So early in 2025, at age 63 they should not defer the extra catch-up since they will turn 64 before end of year.  Payroll systems will handle this correctly in any event. 

Thank you,

Tom

In NC, my friend married a probation officer. They were married about three weeks when the officer committed suicide. The state was not informed of the marriage. The payout was given to a beneficiary and my friend received nothing. How does she combat the problem?

EBSA opens voluntary "Retirement Savings Lost and Found" database for submissions - First submissions should be made as soon as possible before December 29, 2024, and
updated at least annually thereafter.

Links to the Official RFI and Fact Sheet included in a just-issued BenefitsLink Newsletter Bulletin.  (Those links will be updated when the RFI is published in the Federal Register.)

Ft William doc, 12/31 PYE.  Eligibility is age 21, 3 months - elapsed time (not consecutive) and monthly entry.

Hire date: 2/25/24

Term date: 4/11/24

Rehire date: 8/22/24

When should this person become eligible ?

If I have an executive making $500 a year, and he participates in a 403b plan, isn’t the employer nonelective contribution (assume 5% of base) limited to the $340,000 401(a)(17) limit?  In other words, he contributes $23K in employee contributions, plus $7500 catch-up, and the company does a quarterly nonelective of 5%. Currently, they’re contributing 5% of $500,000, but shouldn’t it be 5% of the $340,000 max?

Do you include accrued income (especially dividends and interest) in the fair market value used to calculate the RMD for an individual?  Do you know of any specific guidance from the IRS on this?  I am wondering if the accruals are excluded for a cash basis taxpayer.

Thanks,

I have an HSA that comes with my Employer provided HDHP. This year i elected for self only coverage in my HDHP. The HSA max is 4300 in 2025. My spouse is electing self only coverage through her non-HDHP provider. If i understand correctly my spouse (we just got married in Sep 2024) who is eligible for FEDS-FSA through her federal government job enrolls into FSA this will make my HSA contributions disqualified/disallowed?

1. If that is the case can i contribute up to the HSA max of 8550 instead? I've already completed my enrollment with self-only coverage and she is not associated to any of my insurance(s).
2. If #1 is not possible. Can she enroll in a Limited Expense Health Care FSA?
3. Regardless of the above answers am i allowed to use HSA funds for my personal expenses with contributions I've made before getting married?

If Brian answers this i give an advanced thank you! The info he provides is immense in this community.

We have a client setting up a Mega Backdoor Roth contribution in his 401(k) Plan.  The question is, does that contribution need to show up on his W2?  I didn't think so, but I wanted to confirm.

Thank you in advance!

Good morning!  I'm just trying to see if we can setup an additional plan for someone due to it being a controlled group:

1) Employer #1 - Husband owns 100% of the company, his wife is the only employee

2) Employer #2 - Wife owns 100% of company (and is the sole employee)

So the question is, the wife is getting a benefit under her husband's Plan (and a sizable one).  Can she also setup a Plan under her own company or would that not be allowed?

because the participant loan will be used to purchase a principal residence, can you use an adjustable interest rate? Just because the interest rate is to be established at the time of the loan, to me that does not necessarily mean you can't use an adjustable rate because the adjustable rate would be established at the time of the loan. any thoughts? Anyone seen this before? 

Because this participant loan is being used to purchase a principal residence, the repayment will be much longer than the five years. May I use an adjustable rate of interest? Has anyone had any experience with it?

I like to take 401 K

415(h) expands the 1563(a)(1) controlled group set of connected entities. This expansion perforce affects the reckoning of amounts for 415 compliance, both the annual additions and the 415(b)(1)(B) and 415(c)(1)(B) limits. 

The following excerpt serves as verification of this situation. Proceed forward for the inquiry. 

Pursuant to section 414(b) and § 1.414(b)-1, all employees of all corporations that are members of a controlled group of corporations (within the meaning of section 1563(a), as modified by section 1563(f)(5), and determined without regard to section 1563(a)(4) and (e)(3)(C)) are treated as employed by a single employer for purposes of section 415. Similarly, pursuant to section 414(c) and regulations promulgated under section 414(c), all employees of trades or businesses that are under common control are treated as employed by a single employer. Thus, any defined benefit plan or defined contribution plan maintained by any member of a controlled group of corporations (within the meaning of section 414(b)) or by any trade or business (whether or not incorporated) that is part of a group of trades or businesses that are under common control (within the meaning of section 414(c)) is deemed maintained by all such members or such trades or businesses. Pursuant to section 415(h), for purposes of section 415, sections 414(b) and 414(c) are applied by using the phrase “more than 50 percent” instead of the phrase “at least 80 percent” each place the latter phrase appears in section 1563(a)(1) and in the regulations under section 414(c) (except for purposes of determining whether two or more organizations are a brother-sister group of trades or businesses under common control under the rules in § 1.414(c)-2(c)).

https://uscode.house.gov/view.xhtml?req=(title:26 section:415 edition:prelim) OR (granuleid:USC-prelim-title26-section415)&f=treesort&edition=prelim&num=0&jumpTo=true

URL: https://www.ecfr.gov/current/title-26/part-1/section-1.415(a)-1#p-1.415(a)-1(f)(1) 

Citation: 26 CFR 1.415(a)-1(f)(1)

https://pdfs.semanticscholar.org/b661/5ad7712857a69ffde057d6f233cdc94829ce.pdf

Please indicate if 415(h) affects further amounts for scrutinizing compliance. Perhaps to discourage entities in a controlled group from scrambling or recalibrating ownership to provide more advantageous circumstances for compliance, 415(h) might apply further. 

Employer started 401k plan in 2001 and signed an amendment freezing contributions to the plan in 2008.  Since then all assets have been distributed except for 1 participant and the employer has continued to file Form 5500-SFs.  Employer going through a merger and needs to terminate the plan.  Employer cannot locate the original plan document or any amendments or restatements.  The only document we have is the amendment freezing the plan.  We know the plan must be updated prior to termination, but can we just adopt a Cycle 3 restatement and the requirement amendments since then or do we have to go back to 2008 forward and adopt required interim amendments?  Doesn't the Cycle 3 restatement capture those requirement amendments? Trying to figure out the most cost-effective but compliant method to fix this.  

Last year BCBS Michigan emailed a letter stating they were covering gag Attestation for all fully insured plans.  I have no doubt they are doing it this year as well. However, I can’t find this anywhere on their site (it’s easy to find on many other state BCBS websites). Called employer support and they bounced me around (majority of contacts claimed to have never even heard of Gag Attestation). I googled it to death but can only find Attestation confirmations for other BCBS locations.  Anyone able to steer me towards where in writing they acknowledge they are filing on behalf of fully insured plans again so I can save the document/statement for my records?  It appears every other bcbs state has pushed this information out to their website for easy reference last month.  Thanks in advance! 

For many SECURE 2019 and SECURE 2022 tax law points, recordkeepers set presumptions about which provisions a customer plan sponsor ought to want or is deemed, absent an opt-out, to have instructed the recordkeeper to assume in providing the recordkeeper’s services.

Imagine a recordkeeper chooses to do this about whether a plan provides or omits an Internal Revenue Code § 414A eligible automatic contribution arrangement.

Imagine the recordkeeper practically must set the defaults using only the information the recordkeeper’s computer systems know.

Imagine the system doesn’t know whether the employer “has been in existence for less than 3 years.”

Imagine the system doesn’t know whether the employer “normally employed more than 10 employees.”

If the system doesn’t show that the plan’s § 401(k) arrangement was established before December 29, 2022:

Am I right in guessing a recordkeeper in these circumstance would set a default that an eligible automatic contribution arrangement is on (until the plan sponsor tells the recordkeeper it’s off)?

I've got a 403b plan that tried to move from recordkeeper A to recordkeeper B several years ago.  Despite numerous plan documents saying it is an ERISA plan, RKA is insisting that the accounts they hold are non-ERISA accounts and therefore the plan sponsor can't move the accounts.  The financial advisor did a bunch of presentations showing that RKB has lower fees and this convinced about 90% of the people to move, but there are ~15 who just haven't, for whatever reason.  They are all terminated, and all have $7K+ vested balances.

We're launching a new attempt to reason with RKA, but we are expecting it to fail.  One of the directors asked if they could incentivize the participants to either take a distribution or authorize the transfer to RKB.  $100 cash, say.  Since the financial advisor didn't immediately shoot it down, I said that I'd look into it.

How insane and/or illegal is this idea?  More importantly, are there any other good ideas?

Thanks.