austin3515

How about this perspective: The owner (age 40) of the sponsor lives in a $2MM dollar home. The pool is damaged in a storm and requires $75,000 of work. The hardship is processed for $75,000 to repair the pool. The plan is selected for an IRS audit and the auditor wants to see the support. How worried are you? I would be telling the client that he/she should be inquiring about legal counsel... Now I know, there is a needs question, but do recall that you are allowed to rely on the representations of the Participant with respect to the needs part of it. For all I know, the owners money is all tied up in overseas junk bonds.

But at least when you are buying a home that has a pool, the actual dwelling is included in the use of proceeds. That would not be the case in my situation, so I still find J Simmons argument persuasive

Got a participant pushing hard about how he should be able to use a hardship distribution to pay him back for a pool liner that was damaged in a storm. I say no because the pool is not part of the "principal residence", and when I went to prove my point by looking up that definition I found it was not defined. So perhaps one persons definition of residence might include the pool (as distinguished from say a car which can be moved away). Let me know if you have any light to shed. It certainly seems that there is room for a casualty loss deduction under 165 for the pool liner - but there does not appear to be a requirement under 165 that he principal residence be the property that is damaged.

Another interesting question would be what about the 5500? I actually have a similar situation now but we are discussing the 5500. Can the POA sign the form? The trustee is not currently in a position to do so (business actually closed down, plan is being termed, etc.). Someone of course has POA to sign all of his other tax documents.

But do they apply separately or in the aggregate? That is the question. I didn't feel like looking it up .

On principal I would not do anything. Sometimes I think people just need to take a deep breath and ask "is this really a big deal"? We leave small over-deposits in peoples accounts fairly often (Johnny was over-deposited by $8, etc.). If they're underpaid that is different, we usually correct all under-payments. But tiny little overpayments?

That's brilliant... Our document has a whole different section for the "additional match."

401(k) plan has discretionary match, calculation = ever pay-period, but currently there is NO Match. Is it too late (for calendar 2014) to change the match calc to a plan year calc? If they were making a match, the answer would be "duh, of course it's not because everyone can only get more." But what if they are not making a match? One could argue that when allocating a fixed sum every pay-period (through a giant excel spreadsheet that looks at every pay-date) vs an annual calculation, some people will get more and some less. What do people think? Or would the switch only really be permissible if the match is hard-coded into the document (i.e., in that scenario no one can get less)?

Bird, we have the same exact approach except that I boneheadedly missed the "e-mailing is ok if email is an integral part of the job." Better late than never I suppose.

Don;t I know it. I tell all my pooled clients that they dodged a bullet.... But back to my discussion: it seems like the sole distinction related to the "alternative method" is the continuous access web-site - that is, an email is sent saying "hey, you can log into the web-site to get your disclosure" as opposed to attaching a pdf to the email. Any thoughts greatly appreciated.

So I'm reading up on the fee disclosure requirements and the use of electronic media and I am Dazed and Confused. I'm reading that for the Investment related information (the chart, etc.) that the DOL Safe Harbor IS available. Meaning: -If email is an integral part of your job; OR -You opt in to electronic delivery; then You can receive the disclosures electronically. Otherwise, you need to receive paper. Then there is this ridiculously complex Alternative Method which as far as I can tell is a far less efficient way of obtaining the very same result. So what gives? What is the practical purpose of this Alternative Method? The Alternative Method requires participants to receive paper notices asking them if they want to opt-in and then they must receive a paper annual notice each year, etc. Until now, I thought the Alternative Method was the only e-delivery method available for the fee disclosures. I did not realize it was in addition to the existing safe harbors. I just cannot figure out what you get for all of your efforts in complying with the Alternative Method...

My question wasn't "how do I handle this situation in my plan" it was "what is this person thinking of?", hence the plan document is not necessary for this discussion. I knew it was not gong to be an option that was available, I was just trying to give a better answer re: why it could not be done. And now I know!

This plan is NOT subject to any QJSA or QPSA stuff. I'm not looking for what this plan says. I'm only trying to determine if this person is talking about something where I can say to them "you're thinking of the QPSA rules, but those rules do not apply to this plan." Is that a QPSA rule, where the participant can name 50% for the spouse and 50% for anyone else? The thought being the spouse gets her half - it's the participant's half that is being assigned elsewhere? If yes, I think this is what is being referred to.

Got a call from an advisor who has a participant insisting that if the spouse is the 60% beneficiary than the other 40% can go to someone else. I'm sure it is not true but was wondering if someone reads this and says "oh yeah, they are thinking of governmental 457(b) accounts attributable to pre-1982 accumulations in their after-tax balances" or something equally obscure (my example is fictitious of course). If anyone knows it is one of you...

I think it's actually kind of clever although they should have had non-key HCE THM go in as PS. Although I suppose a regular document gives you the option of going either way (PS or QNEC) and I like discretion

Bless you, I could NOT find that in the EOB!

I agree - take for example a participant with $500 of investments and a $20,000 loan balance (they took an in-service after they took a loan). Because of this example alone I cannot imagine a different outcome. But nevertheless, I cannot find anything concrete. I will check with Corbel to see if it is buried in their document somewhere.

To whom is the loan offset taxable? Deceased participant's estate or the beneficiary? And why can't I find any sites at all! http://benefitslink.com/boards/index.php?/topic/51842-deceased-participant-questions/ I found this thread, but there was nothing conclusive... How could this not be well documented??

I don't see how this would not be considered an eligible rollover distribution. Talk about sticking it to the Participant if it was not eligible for rollover. If it was me, I would just do the 1099-R on the employer's ein and call it a day. I guess I might feel differently if this was a "large" distribution. But if we're talking about $5,000 I would not go crazy with this.

I don;t love Relius, but I do love that you can create custom reports in Crystal which we rely on heavily. Frankly without them I wouldn't like Relius much at all (or any other platform for that matter). But regardless, the idea of converting to another system makes me shudder at a) all the work and b) all the time mastering a new system. I barely have time to time to tie my shoes

Any updates to this? I have the same issue pretty much right now...

Sorry, but if there is real estate in the plan, can you still use the SF (i.e., because that particular question on qualifying assets is not asked)?

Well, there you go... From the SF Instructions. Eligible one-participant plans need complete only the following questions on the Form 5500-SF:  Part I, lines A, B, and C;  Part II, lines 1a–5b;  Part III, lines 7a–c, and 8a;  Part IV, line 9a;  Part V, line 10g; and  Part VI, lines 11–12e. Note: 6a regarding eligible assets is not asked, so even if the plan invests in real estate it can still use the SF. Would everyone agree with that statement?

When filing the SF instead of the EZ, are there questions that we do not need to answer because those same questions are not on the EZ? I'm getting the message from someone that the SF they filed has a lot of blanks because those questions do not apply to an EZ.

Scratch that... I just read the cited reg - I didn't realize there were parallel regs in 401k and 401m on this topic. Amend away, just make sure you follow all those rules including the ACP test...