Bird

We agonize over a lot of minutiae, but that has never even been considered. It's not an amendment and I think I could argue that it is wrong to check the box for an increase (not that there would be any consequences).

OK, I take back my snotty remark. I think you just put in the taxable amount in 2a. Please report back on what the vendor says. Notice 2009-75 might help; it doesn't tell you how to complete the form but Q&A 1 talks about how much is included in taxable income, so it seems logical that you complete the form with Code G and indicate that it is taxable (of course you might, or probably, need two 1099-Rs).

Mmm, how hard are they trying? It's in the 1099-R instructions, Code H.

Yes, that is interesting; I've never seen it. Is the insurance company going to surrender the contracts and just keep the amount remaining on the loans as collateral? If so, then I don't think it's a problem - e.g. if someone had a $10,000 cash value in an annuity, and a $2,000 loan, and the insurance company surrenders the policy, keeps $2,000, and sends $8,000 to the successor custodian, then you can treat the other $2,000 as if it had been transferred as a loan. Effectively, it's no different than if a $2,000 loan had been processed immediately before the transfer in a manner that we would all be more familiar with, as a direct reduction in the CSV, and $8,000 was left to transfer. I've also learned that big insurance companies hand out wrong information like candy, so you might want to review the annuity statements to see if what they've described is accurate, and/or call again to see if you get a different answer.

There are differing opinions on this - assuming the loan policy says "payments are made by payroll deduction," does that mean "payments are made by payroll deduction and you can't change them, ever" or "any payments that are made shall be made by payroll deduction as a convenience to the plan sponsor/administrator, and if you elect to stop them, so be it"? I think the first interpretation runs afoul of some payroll law or other, especially if the policy is a separate document from the plan, as it usually is, so I don't think there would be ERISA preemption of state laws, therefore I think the second interpretation is correct. And if he stopped now, the loan wouldn't default until the end of next quarter, assuming the statutory max date is used, so he could conceivably make up the payments with the bonus income as suggested, although my experience with those promises is that won't happen. Oh, I guess you'd better make sure the first missed payment occurs in October, not September, so the projected default date is March 31, not Dec 31, since the bonus is coming in January. (It's going to be a PITA for someone, but not me, so I'm happy to suggest it.)

It sounds like the document is written so the match is determined on an annual basis; I guess you could say that the deposits throughout the year were estimates although were probably determined very precisely at the time they were deposited. You should let the dust settle at the end of the year and either: calculate the highest percentage that happened to have been deposited for anyone, and bring everyone else up to that level. or figure out what the employer really wanted and remove money from the accounts of those who got more, and reallocate it. That second alternative is not always pretty but the only way to actually wind up with an effective reduction for the year. I guess there is a third alternative, and that is to take the approach of large payroll companies and just stop the match and not worry about what the document says.

Doesn't the form you downloaded have a warning that is for informational purposes only and that you shouldn't use it? (On page 1, the very first thing you see, with the word "Attention" in red? ) There's a phone number and link to order paper forms on that page too; I think that's the proper procedure. I think you just file it and let them assess the late penalties.

I'm not sure, but I think/hope that the receiving IRA has to indicate the type of rollover on Form 5498...yes, I checked and there is a Roth conversion amount on the form.

I think contributions are due by the filing due date of the entity, so 10/15 is ok - for tax purposes - for a partner's deferrals. I agree, to be conservative, 9/15 is cleaner. And we're trying to get self-employed taxpayers to make their 401(k) contributions within 7 business days of the end of the year so the "late deposit" issue doesn't have to be considered.

Right. The distributing plan needs to ask/know if it is a Roth IRA.

I agree with your employer. Termination for no reason other than to permit a distribution, and with intent to rehire, is not a termination at all.

I agree with Belgarath. It shouldn't have been that way, but it wasn't a PT or otherwise prohibited.

Absolutely. Insurance proceeds should be thought of as just part of the entire participant's account. Think about the bad stuff that can happen if the (current) intended beneficiary is named on the policy, and the participant marries, divorces, remarries, etc., etc. where it is entirely possible or likely that the policy named beneficiary is simply not allowed under the terms of the plan or the law.

shocking I would do a 1099-R/1096 now and pay the penalties if and when they ask...we've done one or two of these and never heard of the penalties being assessed. There's no 945 if there was no WH. Failure to withhold is one of those errors without real consequences. Unless the participant sues to force someone, I guess the Plan Administrator, to pay the WH for him, then nothing happens. And if the participant has a claim against the PA, the PA has the same claim against the participant for the money that he should not have received. (The participant might have been entitled to an in-service, but I doubt he was given the proper notice and forms to complete the distribution.)

Yeah, but the 5500 series forms on the website have the "for information purposes only, do no use for filing" watermark on them. I know you can order some by phone, but I'm not sure how far back. And I know you can use current forms instead of "really old forms that are not available" but I'm not sure where that cutoff might be; I'd think they would expect that you could dredge up a 2006 and 2007 form (I got a 2007 form by phone not too long ago and suspect 2006 is still available). They're probably available on a software vendor's system also.

I'm a tpa, not a CPA, but I say: no no yes

If you're asking about something that's already happened, I would just not do it any more and move on (or amend to permit immediate distributions if that's what you want). If you're asking if it is ok to have the provision in place but pay participants early anyway, I wouldn't do it.

Thoughts- I don't see how paying as soon as administratively feasible gives more flexibility; it is what it is. In our (small) market, we do a lot of safe harbor plans and also might have to share employer contributions with term'd employees due to 410(b). We prefer, strongly, to wait until after the end of the year in those cases (and in general, just for the chance to reconcile 401(k) contributions and otherwise let the dust settle). I don't have a problem telling a whining/threatening participant "it's a retirement plan, not a savings account, be glad you don't have to wait until your normal retirement date." End of year payout is in some ways a holdover from balance forward vals but there are other reasons for wanting to wait. I think it's more common to have immediate payouts in larger plans, and as long as the provisions are such that it is unlikely at best that a participant will be entitled to additional money, it's not so bad to pay immediately.

It's tough to say; at some point you might want to be expedient and just take whatever number someone comes up with, or as Mike notes, take a different approach and try to get it expanded - ask for the moon while you're at it and see what happens. And there's the problem with our "ideal" scenarios.

I saw that. Well, they're getting the paper filings, at least from my clients.

We take the position that if it's something we already gave them (and we prepare a comprehensive annual report with just about everything in it), then we have the right to charge for copying and giving it to them again. I don't think it needs to be in a service agreement; it's just common sense.

Yeah, it's best to be as specific as possible and even better, do the calcs and agree on them before the QDRO is issued so it can just say "X" (plus earnings). As you've already learned, records are often missing and it becomes impossible for "someone else" to calculate what you thought was a "fair" split. FWIW, if pressed, I would interpret the order to exclude earnings on the pre-marital portion.

They are treated as employer contributions, and someone just has to make sure that the employer contributions are allocated according to the terms of the document, which probably means that in all likelihood additional contributions are required to even things out. Yes, it's better to take the money from the participant's accounts. Better yet to not have the insurance in the plan.

I read it as "benefits due to a participant."

Yes! I'm just guessing, but I think that in this case "EBSA" on the address line really means "the vendor processing tax returns." It's a different PO Box and I assume they are bypassed on the ultimate reporting. FWIW.