I’ve had been granted divorce in 2019 where per judgement, we are to split the IRA 50/50 as well as all assets. She (during the divorce process) sells all assets leading to 60k ordered to be returned to me. Yet she does not report this information to child support upon seeking help. She as well was (while married) involved in a class action that she didn’t report, which was recently found.

So arrears have been accumulated, while I’m in and out of the hospital and therapy for an accident I was in back in 2023. The child support agency put a freeze on my possible winnings, took my license, claimed to release it if a payment was made, and closing by depletion of 12k from my IRA.

No QDRO used, no judgement orders, just an order to withhold letter directly from the agency. No levy only the request to withhold. This was not made known at last hearing, caught us by surprise, and the bank doesn’t have any answer to how they deviated from my best interest to forfeit my money. They say CSS is identical to state, but if that’s true, we’re all screwed. What can I do now that they’ve taken all I have and violated the divorce decree?

I do have some very generous plans that allow deferrals immediately.  Most concernedly, I have a MEP that allows it - and now we're bringing on our first 10+ employee employer post-12/28/22, so welcome to automatic enrollment.

Amongst all the other issues is timing for the automatic enrollment notices.  Obviously, it's going to be difficult to give the notice before they are eligible.  What is the best solution for implementing it?  It seems counter to the intent to say "Welcome to Company X.  Since we are part of Y's MEP with immediate eligibility, you can elect to defer starting today, your date of hire.  But if you don't make an election, then in 30 days you will be subject to the plans' automatic enrollment provisions as outlined on this notice I'm giving you today."  Is that really the way to go?

Thanks in advance...

Employer has history of reimbursing some COBRA for terminated employees being provided severance.  Company is concerned about number of individuals on COBRA for general health insurance renewal purposes as well as with possible switch to a PEO with benefits.  Former employees generally have no contractual right to COBRA reimbursement and there is no severance plan or program--the Company has just offered to reimburse some limited COBRA on a discretionary basis with past terminations.  Company would prefer to avoid more COBRA beneficiaries if possible.

Any concern in stopping the old COBRA reimbursement practice (maybe forever, maybe just temporarily) and implementing a new severance arrangement where the amounts provided for COBRA reimbursement are instead provided as special "transition health insurance benefits" (or whatever you want to call them) for use in covering the cost of transition health coverage either through an exchange or COBRA and requiring proof of coverage?  If that is a problem, any issue in simply providing that amount generally earmarked for transition health coverage but paid no matter what--i.e., they get the cash and can spend however they want without being limited to reimbursement.  Employer would not limit ability to elect COBRA and would provide all required COBRA election packages but may highlight the potential benefits of exchange coverage as part of the exit process.  Thanks.

401(k) plan participant dies.  Spouse is sole primary beneficiary.  Based on advisor's recommendation, spouse -- pursuant to SECURE 2.0 -- elects to treat 401(k) account balance as if she was the employee.

Participant also had a SIMPLE IRA.  Spouse is sole primary beneficiary of the SIMPLE IRA.

With spouses having full rollover rights (402(c)(9)), is there any issue with spouse rolling over the SIMPLE IRA death benefits to the 401(k) plan and having the recipient 401(k) plan treat such rollover as if she was the employee for purposes of paying RMDs to the spouse?  Any help would be appreciated.  Thanks.

For a single-employer individual-account (defined-contribution) retirement plan, typically the employer, or some committee or officer of it, is the plan’s administrator.

Of those, for some a bank or trust company is the plan’s trustee, but for others only people associated with the employer are trustees.

(For the question I ask here, let’s leave aside an investment adviser, even if it is a fiduciary.)

So, how often does it happen that both the administrator and trustee roles are filled by the employer?

My query is only to support a lesson I teach my law school students. Any information you share I’ll use only with nothing identifying, and only in a very wide generalization.

I'm using the client's 9/15/24 extension for Form 5500-EZ, which I have not done previously for any client.

Do I check 5558 at the top?

I was thinking of checkin 5558 at the top and including the Corporate extension as an attachment.

As the title states, the original IRA depositor (a Florida resident) passed away leaving the assets to his spouse. Hours after, the spouse passes away prior to the assets moving to her IRA. JP Morgan is saying the only option is a distribution to the estate resulting in some hefty tax implications given the size of the IRAs. 

Has anyone dealt with a situation like this? I am sure there are some PLRs out there that help with the tax side of things, but ultimately this is a contractural matter between the estate and the custodian.

I have a cash balance plan that is terminating.

We sent the distribution packages to the participants the beginning of August. 

Several the of participants have a lump sum balance less than $3,000

The owners are anxious to get there money. 

I know we need to do a diligent search but I can not find anything that give a time frame we need to wait before we can send to the PBGC.  

Is there a time frame?

Thanks!

I have a new plan, everyone is part time.  It's a SH Match.  To be eligible to defer you only need to work for the company for 6 months, no  hour requirement. CAN the SH eligibility have a hour requirement?  will that screw everything up?  My ADP test?

Employer withheld premiums for welfare benefits from employees' pay, but only deposited a portion of such premiums into the VEBA/trust. (Reasoning is unclear, but may have been to avoid UBI/UBTI, as VEBA is overfunded.)

Employer held in its general assets the remainder of those employee "premiums" apparently for its own use.

If the "surplus" premiums never went to the VEBA is it a reversion? Does it matter that the contributions were not dictated by the VEBA but rather simply by open enrollment materials? How does one correct an issue like this? Is there a correction program for VEBAs?

Appreciate any thoughts!

I’m 99% retired, but have a couple people I help take care of their EZ filing on their solo k plans.  I understand the feds want the EZ to be filed electronically, and that this is apparently mandatory for many filers for the 2024 returns to be filed in 2025.  But I’ve seen conflicting guidance where some say it’s mandatory if the plan sponsor files at least 10 returns of any type (e.g. payroll, tax, 1099s, etc) in a year, and other sources say this threshold is 250 returns in a year.  Obviously this makes a big difference in who must file the EZ electronically.  Can anyone help clarify this for me?  Thanks.  

Quick question on the 70% coverage testing.  If a client fails, is there any alternative correction method than a QNEC?  I didn't believe so, I just wanted to be 100% sure.

Thanks!

Deleted post - information originally provided to me is incorrect.

P and K divorced 7/29/15. Decree says P is to split 401k from marriage 1997 to divorce w k.  QDRO finally started in 11/23, signed by courts 3/24. 401k plan transferred to IRA by P’s previous Employer. Unknown to both P and K.
 

QDRO relates to 401k not IRA and does not correspond with decree, (K manipulated documents and P signed thinking the had to match decree or courts wouldn’t have signed, not the case) So it’s a blessing that it got transferred to an IRA. When P contacted 401k company-Fidelity to see if QDRO was being processed in March, that is when he found out about it being transferred to Insperia Financial as an IRA. That company does not process QDRO and Ca Labor Retirement Service stated that QDRO is not Valid as it relates to a 401k not and IRA. Insperia Financial says that P and K have to agree on either a percentage or an amount. Funds are locked down until then.

k won’t sign unless the split of the 401k includes Child Support and Alimony as well. K has now levied P bank acct for child support and on Sept 9 a withholding order will take the total child support from his IRA, K is willing to sign for a lump sum agreed amount.
 

Question: Can a settlement agreement be made, staying the they agree on this amount, and that it covers the split, child support, and alimony. Have them both sign with notary. Is that legal to be done? If so do you know someone who could it?

Hi

Another new one for me (usually had multiple schedule c's with 100% ownership)

Joe owns ABC LLP 50/50 with his son - no other employees. K-1 income was $250,000 for each partner.

Joe owns 3 other partnerships, 50% each and other 50% is unrelated. 2 partnerships had $50,000 k-1 losses each for Joe and 1 partnership has $25,000 of k-1 income for Joe.

If want to set up a DB plan for ABC LLP, what is the K-1 I can use?

Thank you for your comments.

Is the Beneficiary desigantion form required to be notarized if the beneficiary is a spouse?   Is it even needed for all practical purposes?  Our plan docs name spouse as a default beneficiary in the pecking order.  Interested to hear thoughts and opinions.....

We have a non-profit church that wants to start a 401k plan.  They will have more than 10 employees.  Are they required to have auto enrollment starting in 2025?  There is an exception for "church" plans.  This is a plan with a church as the plan sponsor.  I do not think that these carry the same meaning and that this 401k plan will need to offer auto enrollment.  

Any comments are appreciated.

I received half of my exes retirement. The QDRO has been sent back twice. In the mean time ex was terminated from job. The agreement to give half was awarded in the final decree. Would plan give him all of retirement because he was fired before the plan approved the QDRO?

We have a multiple employer plan with two companies, Company A and Company B.    Company B is a participating employer in the Plan sponsored by Company A and the document says ADP/ACP testing is using prior year method.

Company B came into existence in 2022, with only one employee who was classified as an HCE.    In 2023, Company now has 2 employees, the one HCE and now one NHCE who transferred over from Company A and was previously eligible under Company A.    The document counts past service between the two Companies.

What is the prior year deferral percentage for the NHCE when testing for 2023 in Company B?  0% or 3% since it is the first year Company B has NHCE employees?    Can Company B elect to change to current year testing or must both Company A and B move to current year testing?

I've broached the topic of an ASG with a client, and of course they want more information before deciding to engage an ERISA attorney.  DWC has a good article on their website about ASG; is there anything else that you've found that is relatively understandable that can be sent to accounants (and/or plan sponsors)?  Thanks.