Would anyone be willing to share a set of distribution paperwork for an estate, to be completed by the executor of the estate?

I don't understand this letter so I hope someone can tell me what I am missing. The new rules regarding amendmending safe harbors expressly allow you to amend for ANYTHING except the 4 expressly prohibited amendments.  Why are they asking the IRS to approve certain other amendments when there is nothing prohibiting those amendments?

http://www.asppa.org/Portals/2/PDFs/GAC/Comment Letter/final170606_Safe_Harbor_Mid_Year_CL.pdf

Participant loans give me a headache.  We have a plan with a few (3 or less) missed payments on loans that are otherwise in compliance with IRC 72(p). It is a construction company, and the Plan sponsor did not start up payroll deduction payments on time, or there was a short lay-off at the time that payments were to commence.  We are well inside of the cure period. 

We would like to reamortize the loans (rather than doubling up payments to get them current, or demanding a lump sum).

Is this really a loan refinance (meaning the loan program must permit refinancing)? Or is it just a reamortization (keeping the terms otherwise the same)?  And is something that is eligible for SCP, or does it require VCP?  I have been under the impression these types of loan errors could be self-corrected (within the cure period) . 

Curious as to both strict interpretations and "real life" if different. The following is (really, really) a hypothetical question.

Suppose you have a 125 plan, and despite a couple of mid-year tests that passed, it still ends up failing the Key Employee 25% benefit test. Let's say only one Key, and $10,000 deferred, and to pass, Key could only have deferred $9,000.

You find this out, of course, after the end of the year. So, under the regulations, is the entire $10,000 taxable to the Key, or only the $1,000 excess?

Now, if the answer is the entire $10,000 - is there a "real life" fix where if caught before end of January, the W-2 would simply show $9,000 as a contribution/deferral, and the other $1,000 would show up as normal W-2 taxable income? Or some other "real life" fix? Doesn't seem quite legit to me...

Thanks for any discussion/answers/insights!

I have recently gotten a letter in the mail on a 401k loan I defaulted on over 15 years ago. Apparently the company managing the 401k never finished foreclosing on the loan after my employment was terminated. The account is being held in escrow and has accrued some interest over this time frame.  

The income was reported on my tax return back when the company sent me the 1099 for the income derived from the original default. 

in the time frame between now and the termination of employment I did file for bankruptcy. 

My question is: Can they still foreclose on this loan after 15 plus years or can I calm the principal held in escrow on this account ?

Client first institutes a DB plan after attaining age 70-1/2. Has a 3-year cliff vesting schedule (to delay RMD's). Suppose the end of the 3rd year is 12/31/2017.

Must the first annuity payment commence by 4/1/2018, or 12/31/2018? My reading is that he has until 12/31/2018, but I can see an argument for 4/1. Particularly if taking an annual annuity payment, it is hard to see how it really matters, since he would receive it all in the 2018 tax year anyway, but that's a separate issue. The later date seems a bit easier administratively, since the vested accrued benefit as of 12/31 often isn't known until later in the following year anyway...

does anyone think or know whether the fiduciary rule includes a duty to monitor IRA service providers that might take rollovers from plan participants?  I am having a disagreement with a colleague. i say there is no duty to monitor IRA advisors who deal with participants.   

ok so the client isn't going to make any profit share for the plan year.  there are forfeitures to be reallocated.  Most vendors (even some of the largest in the 401k arena) don't have an easy mechanism for the forfeiture reallocation process.  Yes - they allow a "contribution" and then fund it with forfetiures but then it shows on the annual reports as a contribution and not as a forfeiture reallocation.  Why does this seem to be so difficult...?!  I understand that the forfeiture reallocation is a contribution of sorts, but since it isn't deductible again I would like it to show as a forfeiture reallocation and NOT as a contribution.

mostly just venting but was wondering what others thoughts are on this.

Client is a local government entity that has a FICA replacement plan, so employees who participate in the plan don't pay into Social Security OASDI or receive those benefits.  

My question is - the requirements for replacement plans are framed in terms of what the employee must receive.  Is there any requirement that a replacement plan provide spousal benefits?    

Thanks - 

Mom dies at 99.

Son inherits her IRA.

Can it be rolled to son's 401k plan?

I think...(a lot of possibilities but I can't find anything that says yes or no, explicitly.)

Thank you

An employer has over 100 participants and has a stop loss policy for it's health insurance benefit.  They received a Schedule C from the insurance carrier.  It's my understanding they don't have to complete the Schedule C if there isn't a trust because there aren't any plan assets.  Can someone please confirm?

I have a question about bottom up QNECs. Let's say the employer wants to give a 5% QNEC to his employees because of the failed ADP test. Does the employer have to give the first contribution to the lowest paid employee and then give it to 2nd lowest paid employee, etc. until the test is passed, OR is the employer permitted to give the QNEC to anyone?

Every example I've seen has the employer giving the QNEC to the lowest paid employee first, but I was wondering if that's a requirement.

Thanks.

Just musing before going in to a meeting.

Under the new DoL Fiduciary rules, wouldn't a promoter of a ROBS plan become a fiduciary under the new rules?  They are being paid a fee and recommending the client move funds from and IRA to a qualified plan for the purpose of purchasing employer stock.

I got to go.

2016 RMD missed for an owner :(.  ERISA counsel suggested reporting the income on 2016 1040.  Do you guys think a code P on the 1099-R would do the trick?  Not sure if it is 100% the right code, but man it seems like operationally the easiest thing to do...

Is a husband required to make a new 2nd wife his profit sharing beneficiary?

I have been researching this all over, including BenefitsLink, and cannot find a definitive answer.  I'm finding dramatically different answers.  I'm working with the client's attorney who is doing the client's estate planning before the marriage takes place, and this the one loose end we cannot conclude.  Does anyone know and can point to the authority (ERISA, DOL, etc.) with which we can confirm the requirement and the client can not worry?  He want's to leave his PS account to his kids, who he named as PS Plan beneficiary after his divorce. Or, he's willing to give his new wife 1/4th.  He's opposed to asking her for a release since she blew up when he asked for a pre-nup.

Also, as I understand it, IRA's are not required to make spouses beneficiaries.  This gentleman is retired and would have no problem transferring all his PS Plan assets to an IRA, if it would work. 

Big mess just fell into our lap:

DB terminated 12/31/2006, distributed incorrectly calculated lump sums August 2007, employer finally files PBGC 501 (without any EA involvement) November 2012, PBGC audits and notifies ER last month (May 2017) that lump sums were calculated incorrectly and substantial additional sums likely owed to participants (plus lost earnings).

Since it's been almost 10 years since the initial distributions and over 4 years since the filing of the 501 we're wondering if there's a statute of limitations that might save this client?

When a medical insurance company provides its own insurance to its own employees, would that be considered Self Funded to the extent they would not file a Schedule A on their medical plan 5500? Should they be filing a Schedule C?

so i was asked the question- what are the consequences of the failure to issue 1099-R for the P,S. 58 costs. My thinking is it is the same as the failure to issue any other 1099-R. a reporting failure which according to the ERISA outlines is $250 penalty per incident.

I saw an older thread on here that said it was optional and that if the participant didnt pay the tax on the P.S. 58 the entire death benefit would be taxable. I don't agree with that answer .  the code is pretty clear that the tax on the P.S. 58 cost must be paid.

Have a 401(k) profit sharing plan, with safe harbor match provisions.  The plan is top heavy and the effective date of the plan termination is 7/1/17.  The owners made salary deferral contributions and received the match (or will, through the termination date, as will the couple of regular employees that participate in the plan).

I believe the approach to take for top heavy purposes is to consider it a short plan year of 1/1 - 7/1/17.  Anyone employed as of 7/1/17 would be eligible for the top heavy contribution.  The problem is, this employer has a number of seasonal employees that normally would not be employed as of 12/31, thus ineligible for the top heavy contribution.  If we go with the 7/1/17 date, this will pull in quite a few employees that have never received a contribution, and the amounts will be fairly small.  It doesn't seem like this would be the intent of the regulations.

Thoughts are appreciated!

Having a brain cramp. Suppose an owner of an LLC taxed as an s-corp sells the business. Plan is a calendar year Safe harbor plan. My understanding is that all employees terminated employment as of the sale date. (Is an LLC that is taxed as an S-corp automatically "dissolved" as of the sale, or does it continue to exist as a legal entity, until "dissolved"?) If the former owner wants to maximize contributions, do you see any problem with having the plan termination date of 12/31/2017, so there is no short plan/limitation year, and therefore no prorating of limits?