Bird

He has an estate; it's the plan proceeds. Eventually you might have to forfeit it but I'd give it at least a year before doing anything.

No, I don't. I'm not sure what in ERISA would force someone to make loan payments though.

There was another thread on this but it's easier to repeat what I (think I) said there than to find it. I think you have to look at the different relationships in this issue. You've got a participant who borrows from the plan and agrees to make payments by payroll deduction. That same participant is also an employee who can, I think, voluntarily tell the employer to stop taking those payments from his paycheck. I think that some people are suggesting that a loan policy that says "loan payments will be made by payroll deduction" means "you can't ever stop making those payments as long as you are employed." I don't think that's correct. You have very formal rules for just such an event telling you when to deem the loan as distributed.

I'm in the camp that believes you can't force the participant to keep making loan payments - they just tell payroll to stop taking the money out of their pay (assuming it's done through p/r deduction; if they're writing checks then they just stop!). The loan defaults as of the end of the quarter following the first missed payment.

Somehow I think that they actually do communicate on this issue; I can't recall a specific plan where we went from 5500 to 5500EZ filing but I'm pretty sure we have done one without incident. And the worst case, as noted, is that you just write back and explain that it's now an EZ filing.

I know ASPPA has asked for relief and the DOL doesn't care to bend. There's some kind of regulatory relief initiative in process and I just suggested to ASPPA GAC that if there was one thing to pick to fix, this would be it.

Excellent; thanks!

IRA owner dies with no named beneficiary; proceeds are to go to estate. The owner was married and the spouse is the sole estate beneficiary. Does anyone know of any PLRs or other guidance that would allow the spouse to be treated as the beneficiary; effectively looking through the estate to the ultimate beneficiary of the proceeds? (I already told them to double/triple check for papers and/or a default beneficiary.)

I guess just answering the question and ignoring what's right, the answer is "no tax ramifications." That is, if you accept that the PS-58s were never reported, and do nothing to correct it, and surrender the policy in the plan and roll over the proceeds along with everything else, then it's all pre-tax money. Of course it's all wrong. I'd think the accountant would know that and it makes me wonder what the real question is - probably "can we get away with it?"

Wow, thanks. I had a vague idea about it but that cleared up a lot.

I noticed another bogus post by SparkLeo (it's gone now, probably wisely deleted by Dave), and I got to wondering why it made some sense and no sense at the same time, and through a search, found an identical thread from 2000, below. S/he just added a question mark to the topic title. I guess there was probably an embedded link or something in there, but really, can anyone tell me what this is all about? Do these losers somehow get paid for this? Just wondering. post May 31 2000, 01:45 PM At a recent conference on the changes to the 5500 form for 1999, it was mentioned that the DOL will now require plans to file the complete SAR along with the 5500 series. Does anyone know if this is true?

Yes, values are as of the end of the year for which you are reporting. No IRAs of any kind are included. "One life plan" for this purpose refers to qualified plans (PS, PS/401(k), MP, DB).

Thanks for all of the prompt replies! It turns out that although the name was on a payroll report (an incomplete report with no wages) and the client said he was an "employee", he actually gets a 1099. So never mind...

Funny that there should be a similar thread popping up just when I'm about to post this, but I'll start fresh. I have an employer with an employee who lives and works in Taiwan - not a US citizen. The employer say he "...is an employee but pays no [uS] taxes." At the moment, the plan does not exclude non-resident aliens, but I'm not quite sure what his status is - all of the discussion I've seen on resident vs. non-resident alien seems to assume some US presence; maybe it's a given that someone getting paid by a US company and living in a foreign country is a non-resident alien but that wasn't obvious to me. The plan says ""Employee" means any individual who is employed by the Employer..." There's no built-in exclusion for non-US citizens with no US presence. Assuming that the intent is that this person is not to be in the plan, do I just check the box to exclude non-resident aliens and figure that covers it, or am I missing some implicit thing that keeps such a person out, or...something else?

Another possibility is that some of us were sending the EZs to the old Lawrence KS address and not to Ogden UT. The DOL was forwarding them but apparently the IRS wasn't recognizing them until received. I have to confess to missing the address change. $1,900 makes sense if the IRS botched the 5558 processing. But $2,300+ indicates the form was received well after the extended due date. But that could be some new and different IRS error too, who knows?

$725.

We got one (so far?) for a return sent before 7/31, with proof of mailing. C'mon people, let's all admit that we are looking for something to do right about now!

All I can say is I think you're right; filing the return after getting the extension shouldn't invalidate the extension. I'd typically be hoping that someone like you would have the cite!

Thanks, I learned something today...I can't say that I see the logic in it but...whatever.

I may be missing something, but I don't understand why the employer would be making a deposit/contribution to the plan - the only fix that I can see is to get the money back, and if the participant refuses, document it. Is the forfeiture account deposit something that is IRS-sanctioned?

Well, if the bonus hasn't been paid yet, then I don't see it as a cutback to take away the right to defer from it. It's different, I think, from earning the right to a future PS contribution under the terms of the plan as soon as you work an hour (or 501 or whatever).

Well, I don't see a problem with it but I have no cites to back it up. For the most part I don't like to see such exclusions and would try to understand the reasoning and argue against it. fwiw

No, I don't think you can reimburse the employer for those expenses. No matter how you slice it, it's money going from the plan to the employer. And fyi I exercised my right as moderator or whatever it is that I am called to delete the messages unrelated to this thread.

The IRS released a draft of the form (why they bother before it can be used I don't know) and the smart money is on them releasing it for filing use in a month or so. Remember that you can use the 2009 form for short 2010 forms.

I think you could either find an insurance carrier to take the money and handle the installments, or convince the participant to roll it to an IRA which is going to pay the installments, or just have him reject the installment payout when he sees the quote. (Unless by "installment" you mean taking a fixed amount or percent and still letting the account fluctuate.) Also remember that installments can generally be removed in a PS plan.