austin3515

"First, the "forever" standard is part of ERISA - maintain records as long as necessary to determine benefits payable - and frankly, it isn't that burdensome" :P :P :P (now that is snarky!)

Sorry, but it just seems like some of the "suggestions" (such as the forever standard, remembering obsure details from decades ago that people would be willing to testify to under oath no less) while they are commendable in a utopian world, are just not practical. I swear if Microsoft got this question they would say to the participant "Are you kidding me??" and promptly hang up on them. I'll tell you what, one of these days I'm going to call the big 5 accounting firm I worked for when I graduated and ask them for my money and see what they say! I took the distribution in 2000... Better yet, I'll wait 10 years and give it a shot...

LEt me be clear. There are no files. There are no memories beyond actually remembering the person. There is no one who will testify. I'm sure the owners would testify that they would not have forfeited the money.

Oh yeah, absolutely MoJo. Will call the participant today and see if they would accept $10,000 just to leave us alone. That would be a terrific precedent to set...

What if someone didn't get that good advice of keep records forever until it was 20 years too late? Also, I can see the rationale for not keeping the records supporting a distribution that took place 20 years ago. Certainly they would be kept forever for people who still have money in the Plan.

I don't think even the best in class companies would be able to satisfy this. It was about $30K, definitely not a force out. I suppose we can just tell him no and see if he sues.

Any suggestions on an employee who walks in with a statement from a pooled account from 1993 and says "I never got my money!" Are there any options? Is it ok to just say "we don't have it."

The loans were repaid though with real money, and they were applied to a real obligation. It is where she got the funds that presents the problem. I'm not suggesting that the courts can't garnish the money, I actually have no idea if they can. I'm merely saying the plan did nothing wrong here and there is no operational failure to correct.

I disagree. The Plan accepted loan payments. I think someone else said this too. The real crime here was the stealing from the Employer. I think the Plan is an innocent bystander.

Most companies have a fidelity bond protecting the employer from theft of the employers assets. Not sure how much she stole or how much the deductible is (or if they even have such a bond). I actually think this has nothing to do with the Plan at all. She stole from the Employer, not the Plan.

Not if payment is contingent upon termination, which it almost always is in these things.

Ok ill give him your number and you can explain it to him... maybe imnoverthinking it but I think he'll be upset and incredulous.

The math was just easier with 100k. Clearly the exec wants not only the tax savings but also the we contribution. I try not to think people unreasonable when they are being reasonable.

Right. Imagine the shock when I tell Executive A that because he voluntarily chose to contribute $5,000 to the 409A Plan, he is going to lose $150 of Safe Harbor. See my concern?

https://advisor.fidelity.com/app/proxy/content?literatureURL=/969837.PDF "Income deferred does not reduce any other employer-provided benefits, such as employer matching contributions to a 401(k) plan or benefits under a qualified defined benefit plan. Generally, this means compensation used in determining benefits under the qualified plans should not be reduced below the qualified plan annual compensation limit ($255,000 for 2013)." Am I the only one who feels like this is generally ignored?

Participant makes voluntary deferred compensation contributions to a 409A Plan. His gross wages are $100,000 (just to keep it simple) and he contributes voluntarily $5,000. Is his 3% Nonelective Contribution based on $100,000 or $95,000? Note that "deferrals to a NQDC Plan" is NOT an add-back listed the way other pre-tax deferrals are. I am pretty sure it is $95,000 but can't understand why that doesn't get more press. I've had it crop up as an issue more than once.

http://www.relius.net/News/TechnicalUpdates.aspx?T=P&1=1&ID=1088 Nice write-up from Corbel

http://www.ferenczylaw.com/Documents/FlashPoint/2_2_16_FlashPoint_The_IRS_Giveth_Yay_and_the_IRS_Taketh_Away_Boo.pdf Just wanted to make sure everyone saw this, in particular what the IRS is trying to taketh away...

Compliments to TAGData for pointing me in the right direction, SECTION 6. CORRECTION PRINCIPLES AND RULES OF GENERAL APPLICABILITY .06 Special rules relating to Excess Amounts. (2) Correction of Excess Allocations. ... If the improperly allocated amount would not have been allocated to other employees absent the failure, that amount (adjusted for Earnings) is placed in a separate account that is not allocated on behalf of any participant or beneficiary (an unallocated account) established for the purpose of holding Excess Allocations, adjusted for Earnings, to be used to reduce employer contributions (other than elective deferrals) in the current year or succeeding year. ...

Plan has a safe harbor match only - no other er contributions (other than discretionary contributions). Have a plan with around $10,000 of "forfeitures" being generated related to a correction to Safe Harbor Match (they used comp over the a17 limit). The IRS prohibition of using forfeitures for SH is based on the fact that the contributions needed to be 100% vested "when made." These were, as they were intended to be SH Match. Anyone have a problem using this to offset the match? The Plan is not audited, and $10,000 is about 5 years of my fees! I would assume this has come up before, and perhaps addressed by the IRS?

Participants deferred a significant amount from deferred comp payouts that was ineligible for contributions during 2015. We have done the "pay the distributions in 2016" to correct this sort of thing when the correction was a few hundred dollars or maybe $1,500. This will be almost $10,000. Does that option get pulled off of the table in that scenario?

I agree. Great job IRS! Credit where credit is due! They took off the handcuffs for sure. They applied reason and equity.

It's so long I've been reading it for 3 days and I haven't gotten to the end! BTW, it's polite to warn over spoiler alerts like that!

It was nice of them to put this all down in one place. Great example of how regulations can destroy something that's supposed to be a nice benefit. https://www.irs.gov/pub/irs-tege/irs_reporting_disclosure_guide.pdf

A separate EFTPS account for each client, or are you doing essentially what the recordkeepers do with omnibus accounts? Personally, I would not want to have responsibility for client funds. But I will say PenChecks adds quite a bit of time to the process for all of its convenience.