Bird

I think yes. RMDs are based on prior year 12/31 balances and there was a balance.

I never heard it called the popcorn method but you can assume a 3% prior year NHCE rate and thus do 5% in the first year.

If it is a sole prop, yes you can make that case, in that the numbers can work out; not saying it isn't somewhat aggressive. We did it once. I don't think it can be made to work in a corporate setting.

I raised this question a little while ago. I think it is advisable to provide the W-4R, but it does not have to be completed.

It's a DB pension and thanks, that's what I was looking for.

I have some general knowledge on this - I know property can't be contributed to a DB plan - but can't seem to figure out where to research more deeply. A sole proprietor is asking if he can contribute CDs by transferring them. I think the answer is no but need to be pointed in the right direction. There are certainly issues having to do with potential gains and losses at the point of transfer, but might CDs be considered "cash"?

If they aren't reporting dividends and such then there's really no harm. One of many thing that's not "right" but there are no consequences.

I'm guessing the proper procedure would be to adopt a new SEP on the prototype, and then either leave the assets alone or roll them. I suspect the investment company sees the account and the document being linked...or not; I'd ask them.

Any settlement check should be paid to the original owner (the plan) and it is simply different money, still owned by the plan. It is not a contribution. Getting the investment company to recognize that may be the hard part.

I think what you said is the most likely/perhaps only reason - it boils down to simplification; if you're going to allow distributions at 59 1/2 then just make that NRA and be done with it. I don't think most* sponsors actually care about holding onto the money or even the vesting. *Of course there are a few, and if you make an assumption and they find out that Joe Blow who screwed them by quitting is 100% vested and it didn't have to be that way, well, then there will be some unhappiness. I was "raised" with the idea that the typical small plan is mostly a tax shelter for the owner, and anything and everything that limits access and amounts paid out is good. Of course things are different now, but I have a hard time letting go. Only recently did we start writing plans with age 65 and no service/participation requirement. Shrug.

I agree with this. And you may already be aware of this, but with Fidelity, the magic words are "non-prototype account" when you are setting up an account with them but not using their document. Otherwise they will try to set up yet another plan...

As noted above, it's mostly about vesting, and with accelerated vesting schedules compared to the olden days, it often doesn't matter. But sometimes it does...some years ago, my mother-in-law left a job after working only a few years, and they were going to pay her a partially vested amount. But she was over 65, and the plan said NRA was 65 with no service requirement, so we pointed that out and got her the full account balance.

The notice does not need to be signed. Depending on how the plan is set up, there may be other documentation that needs to be signed - an amendment - if it is a SHNE "maybe" or "not" with an annual change to "yes" when desired.

The executor should generally be able to handle the affairs for a sole proprietor (the business owner and decedent are one and the same). If it's a corporation and there are no other officers then likewise, the executor should be able to stand in where the owner did previously.

I would NOT pay money to the sponsor. Bill them for miscellaneous work, like researching the problem and have the plan pay you. Alternative is to cut everyone a $.50 check and bill 3X whatever the amount is for calculating and processing them.

Agreed

There's the minor issue of contribution flexibility. This is a pretty dangerous assertion IMO.

Thanks! That's what I was looking for.

I haven't seen this. Generally some additional documentation/gentle persuasion ("we can take the money somewhere else") should take care of it but some people think their job is to say "no."

We still prep some distribution forms for plans that are not on a platform. For RMDs, we have a box where they tell us how much to withhold, or if they want to elect out. We've always considered this as a substitute W4-P; not sure if it is totally legit or not but it gets the job done. Do we need to do something differently starting next year? I get the idea that this is more about carving up the form into two, one that generally applies to periodic payments (W4-P) and the other for RMDs and rollovers (W-4-R). I'm not sure I see a problem with what we are doing but logic never has anything to do with it in this business.

It's not clear to me if there are two different plan documents or one plan that happens to include Roth deferrals that happen to be held in a separate account.

My remarks are colored by the fact that we (a TPA firm) work in the micro plan market. My worldview is that other people - the plan sponsor, the payroll company - are going to screw things up. If you do calcs each payroll (and I am assuming the plan says this - you can have annual calcs but still make estimated deposits each payroll) you are relying on someone else to make the calcs (I hope the TPA isn't expected to do that). That's "easier" for us in theory, but prone to mistakes (that no one will ever know about, but I digress). It can also lead to unhappiness for those folks who front-load their contributions. Using annual comp is what we're used to and prefer. If someone asks how their match is calc'd, it's easy to show how it is done. If it is done by payroll you just shrug. If matches are deposited each payroll but the plan calc is annual, then yes you have true-ups. That seems fairest to me but may not be convenient. In the large plan market, and I guess some small plans, the idea is to more-or-less pay people out the minute they walk out the door, and the only way to do that is to do the calcs on a payroll basis.

More questions than answers but we need to know the facts. An election is made on a piece of paper or some similar correspondence. The deduction for a partner is taken on the partner's 1040, Schedule 1. Did the partner take the deduction and not make the contribution? Or did they neither take the deduction nor make the contribution? If the latter I would be inclined to just move on.

No need to do anything with the SIMPLE-IRA money - it is in fact an IRA. The critical part is "terminating" and not funding it. (I don't know that there is a formal termination process; it's more a matter of deciding not to do it and communicating that appropriately.)

You have to amend it to include the SHNEC, and the notice.