Terminating traditional DB plan. Owners spouse age 75 has been receiving installment payments to satisfy RMD requirements but will now elect a lump sum. Election forms with spousal consent were completed at the time.

I feel good that this is a new ASD, all optional forms must be provided, a new spousal consent is required, and that using current 417(e) rates is correct.

To date she has received 6 annual installments out of an 18 year certain benefit.

Is the lump sum value:

1. The 417(e) value of the normal form accrued benefit reduced for payments received.

2. The 417(e) value of the remaining certain payments. Optional forms would be calculated from that value.

3. Something else.

We are having a debate in the office. I think it's #1.

Plan with a 3% non-elective SH wants to merge with safe-harbor plan with basic SH match. Under IRS guidance re: mid-year amendments to SH plan, you can't change the SH type mid year. Can these plans merge? Does their merger mean the plan will lose SH status for 2016 year and be subject to testing?

If yes, why?

If no, why not?

My employer (financial institution) merged with and into another financial institution on July 1st, 2015. The ESOP plan was to be terminated and distributions/roll-overs were to occur shortly thereafter. The acquiring institution filled an application for a IRS Determination Letter thus informing all ESOP participants that distributions would not be made until the IRS issued the Determination Letter. HR was not forthcoming with information, however in early May, after several ignored emails, we were informed that the IRS issued the Determination Letter on 4/26/16. Distribution letters were mailed last week and received on 5/16, however, inquiries about the distributions revealed that our employer would not release distributions until after July 1st. Requests for ESOP SPDs have been ignored thus far.

Is the normal operating procedures for ESOP terminations?

Thanks.

Foundation has a 403(b) for deferrals so they have no ADP test.

They put 5% into everyone's SEP-IRA.

Can anyone tell me the advantages to put the discretionary non-elective into the SEP instead of into the 403(b)?

when does the COBRA election period begin?

e.g. date of termination of employment i 5/6/16; medical coverage ends 6/1/16

The Notice was given 5/12/16; notice indicates Election formmust be received no later than 7/11/16

I would have thought the ex-employee had 50 days from 6/1 or 7/30 to elect COBRA continuation?

does it matter if it'd a non-ERISA governmental plan?

thanks

Lexy

Haven't done any research on this yet - thought someone might know off the top of their heads.

Non-profit organization is terminating DB plan, effective date is 12/31/2015. They have substantial excess assets. Plan currently is written so that excess assets upon termination revert to the employer.

Can an amendment be done post termination date (i.e. currently) to allow reallocation, if they want to, or would that amendment have needed to be done on or before the termination date? P.S. - if they want to transfer to an existing 401(k) plan as a Qualified Replacement Plan - same question. As I said, I haven't done any research yet, but I'll have to do some as soon as I can...

Safe harbor 401(k) Plan, 1owner, 5 staff. Discrepancy exists for 401(k) deposits only for owner back to 2014.

Owner ran payroll as if one amount was being deposited each time, but actual deposit made was less. Taxes were filed as if the larger amount was deposited.

(Example - W-2 showed $10,000 but 401k trust received $5,000)

Contemplating best means to correct - owner would like to make late deposits on own behalf, rather than refile personal/business taxes.

Calendar year ESOP freezes in May. Generally all earnings and service eligibility end as of the date of the resolution to freeze, correct?

Can I get a hardship withdrawal from my 401K to prevent "eviction" from my primary residence if that residence is an extended stay motel? This is my primary and only residence. i have been living in motels for 4+ years, since I lost my home during cancer treatment as an uninsured patient. If so, what should the plan be willing to accept as proof as i will have no formal eviction notice? But believe me, if my weekly rate is not paid by noon on my due date, i will be evicted from the property. This request is not made lightly. I am trying to save for retirement in 10 years at 62 as my health will not allow me to work forever, and i have been making catchup payments. but this is an emergency.

I have a participant who has to take an RMD this year and wants to take it now... He has Roth Deferrals and regular pre-tax deferrals. Are the Roth deferrals used in the calculation of the RMD. I have never had this happen so I am unsure what to do. Thank

Participant A passed away leaving a 401(k) account balance. The beneficiary form indicates 3 beneficiaries - Beneficiaries 1, 2 and 3. The balance to each beneficiary is greater than $5000, the involuntary cashout threshold.

Beneficiary 1 works at the company sponsoring the 401k plan while Beneficiaries 2 and 3 do not work at the company sponsoring the 401k.

What options are required to be shown on the form? Would I show Lump Sum and Rollover to IRA or do I need to give the beneficiaries a 3rd option to leave the balance in the 401k plan and take annual RMDs or installment payments?

If I showed only Lump Sum and Rollover to IRA and received no forms back from Beneficiary 2 or 3, would the balance just stay in the plan, moved to a separate account in the beneficiary's name and be subject to RMDs on the beneficiary's life expectancy?

Just want to be sure I show the correct options required on forms. Thanks!

Plan is going to remove 2 funds and add two replacement funds.

Participants will receive notice 30 days prior to the change date.

Question:

Does the notice to the participant regarding the fund change need to include the information about the new funds: i.e.. expense ratio, benchmark, performance history etc.

The platform for this plan stated all the client needed to do was add the link where the participant can access the fund data sheet. Not the platform does no work on these notices, leaves it up to the client.

With other platforms they provide the specific data about the new funds i.e. expense ratio, benchmark, performance etc.

When changing funds is it sufficient to just provide the platform's web link for the fund?? What if the participant does not have access to a computer ( these employees still exist!!).

Profit sharing plan has annual valuation. The market is up quite a lot since 12-31-15. What rules do other people use to decide whether or not to do an interim valuation? Or I should say when to recommend it to the trustee?

I have a group ancillary LTD policyholder (100% employer paid) that allows new hires to enroll only on the plan anniversary. The inforce carrier allows this to occur but I wonder about the discriminatory aspect. In other words, if the group has a June 1 effective/renewal date and they hire someone May 15; the employee would go on the plan about 15-days later. At the same time if they hired someone on June 2, that employee would have to wait almost a year before being eligible for the same benefit. This does not sound fair and thus the discrimination question.

Can anyone provide me with feedback or guidance here that I can provide the client?

David M. Block, CLTC

President
Insurance Specialties, Inc.
PO Box 1809
Candler, NC 28715-1809

800.358.8844 toll free
828-667-1119 local
828-667-2229 fax
www.insurance-specialties.com

Any reason to not offer employer stock fund in a supplemental 401(k)? Thanks!

Let's say we are using ABC brokerage company's prototype. It has a

paragraph in the doc that says "all assets will be held at ABC
Brokerage firm"

Does everyone follow this completely? What would happen if you didn't?

Hello,

I'm working with some US Citizens who are resident in Japan. They are business owners there that own a Japanese company. They typically do have income in excess of the FEIE level.

I was wondering if they would be eligible to open a plan in the US based on their Japanese company..from researching this it seemed like a Solo (k) might have worked if they weren't a partnership, but I can't find anything solid.

If anyone is aware of a plan that they could adopt, I would be glad to hear from you about it.

Thanks!

I ran across an interesting thread on a financial advice website. The OP is terminating employment on 6/22/2016. However, the administrator will not allow him to take a distribution after this date because he was still receiving severance payments, and therefore is technically active.

A couple of proclaimed administrators from "big banks" posted that this was accurate and was standard procedure.

If the plan document indicates the termination date is when you stop providing services, and it also provides for immediate distribution, I don't see how treating a participant "active" in this situation is correct. What further surprised me is multiple industry people confirmed it.

I am curious of the opinion of the people on this board, in case a similar situation comes up with a client.

I am new to the topic of qualified charitable distributions (QCDs) where the donor neither has taxable income by reason of the distribution nor is entitled to an income tax deduction.

My understanding is that such can be made from an IRA, but not an ongoing SEP or SIMPLE IRA.

If benefits are rolled from an ongoing SEP or SIMPLE IRA, or from a 401k plan, into an IRA, may the QCD then be made from the regular, 'rollover' IRA or is such subject to the step-transaction doctrine and treated as if the QCD was made directly out of the 401k plan, ongoing SEP or SIMPLE IRA?

Any citations to authority would be greatly appreciated as well.