austin3515

You would presumably lose reliance on their opinion letter.

It seems like the providers the advisor has been talking to will not write these annuities for cash balance plans. Anyone have an educated guess as to why?

It wouldn't be a fiduciary violation merely because the document restricted where the money could be invested. Mind you most the so-called "free documents" are for Solo 401k's anyway and last I checked they were exempt from ERISA :P

Anyone see an issue using an individual annuity to fund a cash balance plan? The attractiveness of this option is that the paying rate on the annuity reasonably mirrors the crediting rate in the Plan. But in reviewing the paperwork it appears that it is requesting an individual's name as the annuitant? I assume that would have to be the Trustee's name, but is that ok?? Can you use an individual annuity in this way? IS there a "Cash Balance" plan specific annuity provider?

Does anyone have a nice template that they work with which you use to tell clients "Fund A is being replaced with Fund B and here is the explanation" or "Fund B is being eliminated because no money is the plan" or "Fund C is being added as a new option" It seems to me I'm not the first person to realize that a template for this would be quite helpful, especially one that envisions all of the different scenarios, so you can just delete the sections that do not apply.

I like it a lot... It's a good enough story that you could tell it with a very straight face upon audit. Thanks!

That's just employer contributions. 408p5a(I) is the problem. HAs anyone ever heard of a "late" deposit being an issue for a self employed individual in this situation? I have to imagine it happens ALL THE TIME that people deposit in April when they file their taxes...

I know, I know, 30 days after the end of the plan year-end. But isn't that just based on the DOL's plan asset rules? For deduction purposes, shouldn't they have until they file their 1040 or business tax return?

Anyone have any info on either EFAST 3 or the DOL's project to completely revamp the 5500?

OK, thanks.

Actuary retires from Actuarial Firm. His partner at actuarial firm takes over his cases and signs his SB’s. Does this get reported on Schedule C as a termination of actuary? The instructions are clear that an enrolled actuary is an individual, but does not clearly define what “termination” means…

That is what we do too, but because so many providers will indicate "Recordkeeper" I was hoping the DOL clarified in a more "obvious" manner. Almost all of them indicate their service provider role as the relationship.

Preparing a presentation on 5500's and curious to know if anyone has seen this?

So the recordkeepers always enter "Recordkeeper" on their Schedule C reports under the field for their own relationship to the Employer. I believe the DOL has said publicly that that's not what they mean - they mean something beyond their relationship as a service provider (which relationship is already obvious). Can anyone point to something? I already checked the 2 FAQs and found nothing...

Geeze, if I look at the words used by the IRS I just don't see how it doesn't fit in perfectly. If I don't defer, I don't get the match. If I get the match, my expected payment is greater than what I otherwise would have received. I have to tell you, if the option were provided to me, I would take the match. I like my job, I have no intention of leaving. I fully expect to be here for 3 more years. And that's an extra $2,500 for just being patient.

"Section 1.409A-1(d)(1) provides that an amount is not considered subject to a substantial risk of forfeiture beyond the date or time at which the recipient otherwise could have elected to receive the amount of compensation, unless the present value of the amount made subject to a risk of forfeiture is materially greater than the present value of the amount the recipient otherwise could have elected to receive absent such risk of forfeiture." You're telling me a 50% match would leave doubt??

I don't understand where the concern comes from. Did you notice I mentioned a Match? They are doing it specifically because the Employer will give them more. So they can get a $5,000 bonus, or make a $5,000 deferral and receive a $2,500 match. They increased what they get out of it by 50%. That's pretty much the ratios that are being discussed in my example.

Plan design is this: Participants are able to choose between a cash bonus today, or an Elective Deferral to the Plan in the same amount as the bonus PLUS a matching contribution. The idea is that if people would prefer the cash in their pocket they can take it, but if someone is comfortable with a 3 year rolling vesting schedule they will get the extra match as a kicker. Anyone have a problem with the participant signing this election form on or before the date the contribution is funded? 1.409A-2(a)(5) seems to suggest that this is ok. Now I also have a provision that the participant will vest upon termination without cause. I believe in order to comply with the above, I have to "insist" that the termination without case take place greater than 12 months after the initial deferral election. Thoughts?

Well, but there was no new promissory note or anything...

Participant repaid a loan for $3,000. The Plan allows for just one participant loan outstanding at a time and his intention was to take out a bigger loan after repayment. He subsequently found out that he could not take the bigger loan he wanted because the plan does not allow for loans from Roth (due to a recordkeeper limitation). Since his plans were foiled he demanded that his loan repayment be returned to him, and the recordkeeper complied because the transaction was based on bad information that they provided. The money was in his account for a week. Now the client meanwhile thought the loan was repaid and so has not collected any loan repayments for almost a year and of course now the loan is in default. We were recently engaged to file a VCP application. Question: Was the loan fully repaid with a subsequent impermissible distribution? Or would it be fairly easy to suggest that the loan was simply "reissued" after discovering a misunderstanding?

yes, but 4/15/16 is a federal holiday. I'm willing to chance it knowing full well they will never match it up! I swear I've heard that even if I had said March 15, the mere fact that I sent in an extension means that I have until 4/15 (at least operationally).

Was it pushed back to 4/18/2016 like the 1040's?

Ahh, I bet that's it. You're saying he recordkeeper is going to treat 100% of the loan as taxable? I buy that for sure, especially considering the recordkeeper in this situation. They're good, don't get me wrong, but it's not Empower-grade technology.

I think there is a school of thought that says it is very bad to take a loan from Roth accounts. Can someone point me to an article that explains this, or please enlighten me on the logic? I have a client whose prior provider said it was a fiduciary violation to allow for Roth loans.

I do not recommend an -11g amendment to correct an egregious coverage failure with the stroke of a pen and nothing more. "My plan fails coverage because I left out 100% of the NHCE's, so the NHCE deferrals are zero, so no correction" just doesn't seem reasonable. Does it follow the letter of the law? Sure, I suppose, but we are still left with a plan that benefitted 50% of the HCE's and zero NHCE's. I think there needs to be some pain here.