Connor

Thank you for your responses - yes, her allocation was at least 1/7th.

An overfunded 1-life DB plan terminated, with the final return filed for PYE 9/30/22 - all of the assets were distributed in 2022. An RMD was paid, the assets representing the participant's remaining PVAB were rolled over into her IRA, and the excess assets were transferred to a new 1-life qualified replacement 401(k) plan whose first PYE was 9/30/22. The excess assets were placed in a suspense account within the QRP, with only a small portion allocated to the participant by 9/30/22. Is only her 9/30/22 balance used in calculating her 2023 RMD, or do you have to also include the amount that's still in the suspense account for this calc? The plan also excludes service before the 10/1/22 effective date of the plan, so she's 0% vested since there's a graded vesting schedule and NRD has the 5 YOP requirement. I cannot recall - is it DB or DC benefits that are always considered 100% vested for RMD purposes regardless of what the vesting schedule indicates? If the actual vesting can be used, is she not required to take a 2023 RMD? I'm also hoping that the terminated DB plan can be disregarded for this purpose. Has anyone been involved in such a situation?

Hard to believe the doc purposely wouldn't discuss the timing - you may wish to double check with the vendor on this. I imagine such a small plan uses a pre-approved doc. Many (if not all) such docs offer the provision for death benefits to be paid up to five years after the participant's death. If this option hasn't been selected, and only if the unpaid status of the benefit is not currently running afoul of the document, couldn't the provision be amended to the five-year option? Some docs allow options to delay the payment even longer for spousal beneficiaries if I remember correctly.

If the presumption is that both companies only employ their respective owner, can't she talk her husband into amending his plan to allow for the RE investment, participant direction, etc? A second plan would not be needed.

Don't be surprised if FTW just tells you to consult with ERISA counsel, the answer I usually get when I ask for a clarification in their doc provisions.

We're interested in working with an actuary who is an independent contractor and can provide all of the actuarial support electronically for the couple dozen or so DB plans that we have. While we would do all of the administration on the plans, we would just rely on him/her to certify the schedule SB and AFTAP calculations, calculate RMD amounts, do cross-testing when DC plans are involved, and any other actuarial tasks that may come up in the normal course of a plan's life. Please PM me if you are interested or know of someone who would be. Thank you.

Thank you for your response and for the cite. A discount is being considered for a prepayment, but I wanted to start with the basics. It also makes me think this type of relief could be abused by setting the maturity date many years into the future, even for small amounts. Regarding its reporting on the 5500, I imagine showing it as a payable would be the way to go. Also, would you happen to know where a sample of such loan language may be available? This a first for us and, though we could try to modify promissory notes for other types of loans, we want to make sure all of the appropriate terms are in order.

Regarding the PTE that permits a plan benefit to be paid from the employer's corporate account due to the plan's illiquidity as long as there's an agreement in place for an interest-free, unsecured loan, does anyone know if there are any limitations for the term of the loan or repayment frequency? For example, can the loan be for 18 months with the entire amount repaid with one payment at maturity or sooner? Thanks in advance.