Has anyone heard of the IRS's new "Retirement Plan Burden Survey" sent to randomly selected Plan Sponsors?

https://www.irs.gov/statistics/rpbsurvey

I haven't ever encountered an actual question on this. Most of the pre-approved documents I've seen contain a provision that "Reclassified employees" are excluded for employer contributions (but not for deferrals unless it is a Church) UNLESS the employer elects, either in the AA or in an Appendix, to INCLUDE one or more categories of "Reclassified employees." My assumption is that such employees are excluded, but not EXCLUDABLE for coverage testing, etc. 

Agree/disagree?

I have some vague memory that these provisions were instituted due to Microsoft or similar situations, where employees who were treated as independent contractors subsequently were determined to be common law employees.

We have a client looking to purchase 100% of the equity interests of an LLC that is currently disregarded for tax purposes. In the course of diligence, we discovered that the LLC is party to two agreements under which it provides deferred compensation to each of two employees. The agreements were not drafted with 409A in mind and so are neither structured to be exempt from or clearly compliant with 409A. We are currently evaluating the extent to which we can argue that the agreements are operationally compliant with 409A. Based on the language of the agreements, we cannot take advantage of any 409A exemption.

The agreements include a change in control as a payment trigger. We understand that, even though the 409A change in control rules (payment trigger and permissible termination rules) are only explicitly written to apply to corporations, the IRS has indicated that these rules apply by analogy to entities taxed as partnerships. See, e.g., Notice 2005-1, Q/A 7; 70 Fed. Reg. 57,930, 57,948, Proposed Preamble VI(E). Is it permissible to apply these rules by analogy to a disregarded entity as well? That is, is it permissible to take the position that a 409A-compliant change in control is triggered when 100% of the equity interests of a disregarded entity are sold (to a non-related entity)? Or, to be compliant with 409A change in control rules, must the change in control be triggered with respect to an entity that is taxed as a corporation or partnership?

Any thoughts are appreciated - thanks!

One person solo 401k was terminated  and assets were rolled over middle of Dec 2023. At the end of December, a small  dividend was posted. It was rolled over to IRA on Jan 2nd 2024. This was for a business that was closed. 

I understand a final form 5500 ez needs to be filed for 2024 selecting short year plan. Answering questions regarding number of participants and asset totals at the beginning and end of the years, not sure what to select. At the beginning of Jan 2024,  balance that was on the account was only the small dividend that posted on Dec 29th.

Total plan assets -  is the beginning of year total the amount that was first rolled over in Dec 2023 plus dividend? Or is it the dividend from January? I know ending balance is zero. 

Was the participant still an active participant at the beginning of the 2024? Since plan was terminated in 2023, what would be the correct answer? 
When answering Contributions received from employer and participant - are these amounts for the entire time the plan existed? 

Thank you for any feedback. Hoping to get clarification soon since the form is due today. I would appreciate any comments. 

One person solo 401k was terminated  and assets were rolled over middle of Dec 2023. At the end of December, a small  dividend was posted. It was rolled over to IRA on Jan 2nd 2024. This was for a business that was closed. 

I understand a final form 5500 ez needs to be filed for 2024 selecting short year plan. Answering questions regarding number of participants and asset totals at the beginning and end of the years, not sure what to select. At the beginning of Jan 2024,  balance that was on the account was only the small dividend that posted on Dec 29th.

Total plan assets -  is the beginning of year total the amount that was first rolled over in Dec 2023 plus dividend? Or is it the dividend from January? I know ending balance is zero. 

Was the participant still an active participant at the beginning of the 2024? Since plan was terminated in 2023, what would be the correct answer? 
When answering Contributions received from employer and participant - are these amounts for the entire time the plan existed? 

Thank you for any feedback. Hoping to get some advice since it’s due today. 

Mr. X has his own IRA, is receiving RMDs on that, and is receiving distributions as a beneficiary of an inherited IRA from his father. 

He passes away in 2023. His wife gets part of both IRAs and his niece gets part of both.

Someone decided it was ok to combine the personal IRA proceeds and the inherited IRA, and set up one IRA for the spouse and one for the niece. Is that ok? I'd think that the inherited IRA has to continue at the payout method set up, so if the spouse claims the new commingled IRA as her own, that would be stretching out the inherited IRA payments longer than they otherwise should be. The niece's part would probably be ok under the 10 year rule although I'm not sure what the remaining payout period was on the inherited IRA so maybe not.

I appreciate any thoughts. I'm not sure I've seen a situation with the death of an inherited IRA beneficiary but it doesn't seem like you should be able to ignore the original payout method on it.

For an employer who files a Schedule C and has a few W-2 employees. Is the plan deductibility limit for employer contributions (employer's net Schedule C + w-2) * .25? 

Does anyone have any information on this? 

Just a curiosity.

Plan had an extension filed, and lo and behold they filed 5500 by original due date, with form indicating 5558 had been filed.

Not that this is a particularly important question, but would the SAR due date be 2 months after original due date, or after extended due date?

We file one 403(b) 5500.  It is a TIAA 403(b) plan document.  I assume the plan sponsor should have a copy of the Opinion Letter for 5500 purposes?

Thanks

So, corporation A purchases 100% of corporation B in a stock sale. Both corporations sponsor a 401(k) plan. 2 weeks after the sale, they now decide to look at the plan issues.

So, clearly a controlled group now. Corporation A crediting service with Corporation B, etc., etc.

Corporation A wants to now terminate Corporation B plan. But this brings in successor plan rule. How is this mess typically dealt with? 

We have a plan that allows for in-service distributions.  A participant who is over 59.5, but under the age for an RMD, has already taken 3 smaller in-service distributions this year and is now inquiring about another.  I've always been told that the Plan can't be used like a bank account, and these consistent in-service distributions could cause an issue.

So, that leads to two questions:

1) How many in-service distributions are viewed as excessive and, if audited, could cause an issue?
2) What would the ramifications be if it was viewed as excessive?

Thanks in advance everyone!

Having a discussion with someone about SSRA as testing age. 

I do not believe it can be used as it is not a uniform testing age and nowhere it says it is ok, at least from what I have been checking. 

Per EOB, non-discrimination answer book and other sources, if there is no uniformity then use 65, nowhere it said it is ok testing using SSRA ages.

What say you?

Hi

I am looking into a DB plan design for a professional boxer and researching what a reasonable NRA is for a new DB plan. Currently, age is mid 20s.

I looked online and on average, it is age 37.

Some retire in the 20s, early to late thirties. On very exceptional situations, past 40.

So, using NRA of 35-37 seems reasonable with a 10 YOP for a DB plan. Apparently planning to retire within 5 to 7 years.

Any comments?

I've got a pooled plan where the plan sponsor doesn't want to show the investment fees separately from other gains/losses.  He says that it's net gains that matters - if the net is better than 'average', then the participants are fine.  He is fine with it showing on the SAR, and he is happy to tell his participants that the fees on the SAR are net against the total gains on their statement.

That isn't sitting well with me.  I'd think that in a pooled plan, the disclosure standard is even higher since all the assets are controlled by the trustee.  The fact that there are lawsuits about fees seems to indicate that disclosing fees so they can be monitored is the right thing to do.

So my question is, is there something in black and white that supports either side?  If it's a gray area, then that's fine, too, as long as I can present as such and tell the plan sponsor that this decision is on them.

Thanks.

A 401k plan is going through the correction program to make amends for not giving quite a few individuals the opportunity to make 401k contributions.  When calculating the associated match on the MDO, is it required that the match be 100% vested even if the plan uses a 6 year graded match vesting schedule?

Thank you

We have a situation whereby the client is attempting to get information to us about a potential first time 5500 filing.   We could file an extension to be on the safe side.  Is there a problem with then not filing the 5500 if it ends up there is no filing requirement?  I know we could file one anyway but this could go on for years when it wouldn't have to.

Thanks

Does anyone have any insight on Curaechoice?  It appears to be a medical provider network entity that contracts directly with employers.  Also, I've read a few articles regarding these entities as well, some pro and some against these type of contracts.  Does anyone know whether there is any IRS guidance on these entities?  From what I can tell, as long as the entities are following employee benefits laws, there should not be any issues. There is a guest article in benefitslink that I reviewed, but I cannot tell how long ago the article was written.  Thanks in advance.

We have a client who gives premium incentives to the employees for getting a physical- I know that's fine. But now they want to require spouses to have a physical if they are on the plan as well-- and "require" them to do so to be on the plan. Can they do that?  I know they can probably give an additional premium discount, but can they require the physical for them to be enrolled? That seems extreme, but I need to know the rules so we can forward it to them. 

Will a Court sign a Qualifed Domestic Relations Order if it is only signed by one party and the party refuses to sign?

My ex-husband died 4 years ago. He had a TBI for 12 years.  I got a letter from the fire department he worked for telling me contact his previous employer because the pension company saw his obituary and they wanted to contact family for his pension. We were married while he worked for this previous employer and then moved to Florida.  He never contacted them again.  We were divorced and no QDRO was completed. 

I read some ERISA regulations that stated that the wife is beneficiary unless signs a notarized paper go give it someone else. Documents, such as, who is beneficiary must be kept indefinitely by company while other documents only kept 7 years.  They say they have no documents, of course.

I was told 3 different stories from the previous employer:

1. Wife gets pension, if divorced and no QDRO filled out then ex-wife gets pension.

2. Will go through his estate and give to his daughters.

3. I appealed the decision and now they say that no one gets his pension.

This sounds a little fishy.

How can they just keep his pension funds??

Supreme Court Case Egelhoff vs Egelhoff decision sided with ex-wife to receive pension money since it came under ERISA and she was his wife at the time he worked for company and no QDRO or changes made to beneficiary.

So, my question is - how can my ex-husband's previous employer and the pension company legally not disperse his pension?  The company searched me out because I did not know him being entitled to this pension.

Thanks for any information someone might have to help me.

LisaPension information for ex-wife and Supreme Court Ruling.docx