austin3515

Sorry about that. Mimecast is some email protection thing we use. I reposted the link it should work now!

No need to yell at ESOP guy!

If something doesn't say it is irrevocable, then it is revocable. That's why certain legal documents include the word irrevocable in the first place. The document says it is discretionary. The document is not amended to make it mandatory merely because someone makes a decision to exercise their discretion a certain way even if that decision was made in a Board Resolution. That's how I see it anyway!

What does MEC out mean?

[edited to fix link] https://www.forbes.com/sites/davidrae/2018/09/20/rich-person-roth/#4b7ddee471fe Whenever I read "backed by life insurance" I just think used car sales man. Is this legit? I have a client who is doing this.

Fortunately for me this is a solo 401k. But contributions are discretionary so my understanding on the matter is even if declared a contribution it is not irrevocable even if participants lose out. I had a plan once many years ago where profit sharing was allocated and participant statements were distributed. Plan sponsor fell on hard times and had no money and the ERISA attorney we consulted said no problem to take it away because it is discretionary. PR nightmare notwithstanding.

Do you know if that would cover the substantial risk of forfeiture issue on a 457f? and thank you!!

Employer A deducts a $10,000 profit sharing contribution on his 2018 1120. The contribution was inadvertently never deposited, and is just being discovered now. Is there any way to "Cure" the deduction or is the only option to amend 2018 to remove the deduction and pay the new taxes?

What are the considerations regarding terminating a 457(f) Plan. I am obviously aware that we need to be concerned with presumption of a substantial risk of forfeiture. Are there guidelines? Let's say for example scenario A) is the organization voluntarily terminates the Plan; and scenario B) is the organization is actually ceasing operations (perhaps because they lost their primary grant). These are hypotheticals, but I am curious to know what the rules are concerning terminating one of these things.

There is no deferral election. The Organization is contributing an employer contribution of $10,00 a quarter in my example. The first quarter is 3/31/2020, and the last I suppose could theoretically be 12/31/2025. The question is, is substantial risk of forfeiture applied to each deposit separately (in which case the latest contriubtions seem problematic) or can it be applied to the scheme as a whole, in which case there is a clear substantial risk of forfeiture. Hopefully what I'm driving at is clear enough...

I understand that the IRS position is that amounts are not subject to a substantial risk of forfeiture if the future service is less than 2 years. So lets say all contriubtions made between 2020 and 2025 will vest on 12/31/2025. What about contributions that accrued during 2024 and 2025? I can;t find anything that addresses this precise scenario. Obviously overall there is a significant risk of forfeiture with this arrangement. But is there a significant risk with respect to the 2024 and 2025 contributions? Has the IRS ever addressed this? I think in practice this is quite common because "cliff vesting" is quite common.

The point I'm trying to make is, where is the rule itself? I have yet to see the text of the rule itself which should include effective dates, etc.

CB Zeller, this is insanely awesome... Can someone point me to the actual rules that specify this with special effective dates, etc.?

Does anyone know the answer to the question regarding anyone whose first RMD is due for the 2020 distribution year? Does that person have to take an RMD? Assume they are 5% owner and 70.5 but not 72. I assume the answer is no, but I know enough to know that the details are critical.

Thank you, I'm vesting and paying out on essentially the same day. Good point though!

Well not yet... And there's probably 20 users. The benefit of Access is (if you know how to use it) you can mold it to your operations/processes as opposed to the other way around. It's pretty darn powerful. We're pretty much at the point where we need to be upgrading the backend to a SQL server, but it would hurt to let it go. Interestingly when I was in public accounting we use ProSystem FX Engagement (it was ePace at the time) and that was actually the template I had in my head for my Access thing. There is something to be said for using a mainsteam program. Thanks everyone!

Deferred comp plan provides that benefits accrued will vest based on a rolling vesting schedule. The sponsor and the Participants want the money to become vested if the sponsor is bought. Any words of advice and/or caution?

What are people doing for paperless binder solutions? i.e.. saving all of the workpapers... We currently have an Access program that we are using but may be outgrowing it.

" I understand that the new process requires a declaration be signed by the applicant" I think that's the point of the requirement of the applicant to sign a "under penalty of perjury" statement. That's the declaration you are referring to. But I'm glad you bumped this up, we're doing ours in a week or so, and would love to see some more talk!

You are free to speculate

I don;t like to use his name on these boards because I feel like his answer was private and it wouldnt be appropriate for me to represent that my regurgitation of his answer was his answer. Plus he gets paid to give advice so it feels a little pickpockety.

Well I have referred to a "pension celebrity" who answers questions through a service and he says that we need to pay him the difference between the two rates cumulatively because he was harmed from a fiduciary perspective (we're talking peanuts here). Then he said we can ask the participant to re-execute a new promissory note with the corrected interest rate. But if he declines (which I don;t think will be a issue for this one) we should probably pay all of the difference. Anyway, that's what he said. And again the dollars involved are so small (and the client is so good) that I'm inclined to do that. He said failure to follow the established loan procedurs was a problem and somehow he felt pretty strongly that there PT issues here as a result. He also indicated quite rightly that if this was an HCE there would be other problems as well because of the requirement that loans be available on a similar basis for all employees (that doesn't apply in my case thankfully...

Not to agree or disagree, but it was caught by the CPA auditors

Plan uses Prime + 1% normally. We made a boo boo where we did a loan for someone but just forgot to add 1% to Prime (Prim was 5.25%). I've never run into this before. What would the correction look like? OR I am also floating a threory that Prime is not an unreasonable rate so maybe there is no correction at all. Or maybe we need to pay him 50% of the additional interest he would have accrued from inception to date? What about going forward? Why should he agree to a refinancing to "fix" the rate if his promissory note says 5.25%? Fascinating topic!

It does!