Bird

Not that I really followed what you were trying to say, but maybe counsel who is advising that the plan needs to be amended could tell you what kind of amendment they think is required?

Agree with Lou S. We did a number of these 20+ (?) years ago when MP plans were rendered effectively useless due to PS max increasing from 15% to 25%.

It's one thing to be a voice in the wilderness when you're right. Quite another to be so terribly wrong. Basically, he's the only person in the world that thinks that way.

Misleading, spectacularly so, without context below. 4.72.9.2 (02-26-2015) Plans Covered by Survivor Annuity Requirements The QJSA/QOSA/QPSA requirements apply to all DB plans and any defined contribution plan to which IRC 412 applies (such as money purchase plans). See IRC 401(a)(11).

Not an attorney but if anyone is asking for spousal consent when it is not required, they should find another line of work. And I do not believe that language about a form being "approved by the Administrator" extends to adding language contrary to the terms of the plan.

mmm. OK, I haven't seen that; they are definitely stripped down but anything I've seen doesn't have such exclusions. I don't need to see it so don't bother proving it...

I don't see how you can say they are not a participant on 12/31 and they are a participant on 1/1. I don't think cash vs. accrual has anything to do with it.

May not allow what?

Yeah. Actually it's hard to believe that's not exactly what they're trying to sell - a variable annuity IRA. Not that it's a good idea. I guess if the plan doesn't permit lump sums then that's a different story.

Thanks/good stuff

This is ok. I was a little confused by things after that but now I see; all looks good. Except TH has to go to all non-keys.

Is it a PT if father provides investment services to son's plan and receives compensation? I think so...just checking.

I think you could make a pretty good case either way, if necessary. I lean towards saying s/he is employed. Is it that significant? Contributions would come out of the partners' pocket.

We generally try not to update such records at all at the RK level. On bigger plans where everthing is uploaded in one big file, it can't be avoided and in fact can be somewhat helpful if we allow immediate distributions, but otherwise we try to keep them on a need-to-know basis (and they don't need to know a term date until it is time to process a distribution).

I find it a bit unusual that the plan says matching is done each payroll period AND there is a true up. It's somewhat contradictory but ultimately the payroll period deposits are essentially estimates. From what I see, she should get the match based on her full year's comp. If there were an exclusion for pre-participation comp it would typically be in the exlusions section that you quoted. I wonder where you got this: "Note that the plan only matches on the first 6% of deferrals." I don't see any supporting evidence for 6%. (Edit: never mind; I see. As BG50150 notes, something is a bit off.)

I guess technically only the deferral part would be offset but I think for sanity I would adjust some of the balance from match to deferrals, if that can be done. Otherwise wait to offset the whole thing when match is available (or just offset the whole thing now, which is incorrect but really the sanest thing to do...yeah that).

When in doubt I generally rely on the number used for SE tax calcs. But I can see where you'd have a situation, like this, where you can have a loss from a different entity that would affect the SE tax calcs but not actual profits of the business sponsoring the plan. What I don't understand is how the LLC could have the partnership interest but not show the loss. I'd probably ask the accountant to clarify that but I'd lean towards using the full 150k, on the premise that the LLC isn't really the owner of the other partnership interest, at least as far as it is being treated for tax purposes. I don't know if that means something is fraudulent or just stupid (and fraudulent?) but if you point out the contradiction and ask someone to tell you what the business profits really are I think you've done all you can do.

First, confirm that the plan has a QJSA as the default. Custodians often ask for consent "to be safe" when it is not needed. You don't say what kind of plan it is. Second, the regs (Treas. Reg. 1.401(a)(9)-8, Q&A 4) say you have to do the RMD no matter what, but the hangup is that you'd have to start QJSA payments. Almost nobody wants that. If it's a DB plan, I think that the RMD can be structured so it is effectively a QJSA but I'm a little out of my depth on that.

I question whether the IRA custodian is the one to make this determination.

You did the right thing at the very beginning, which is to ask if there are any takers. It's a fairly standard design that just about anybody who knows anything (which is unfortunately a high bar) could handle. Maybe provide your geographic area, not that being in the area is a requirement, but it might trigger a more on-point response.

Really? I don't see it as our job to police that.

Not that! The purpose of the 1099-R is to tell the IRS how much was distributed, so it can be added to taxable income, and how much was withheld, so that can be credited against the total tax due. You're making a bad situation worse if you give them completely wrong numbers. I'd probably report the gross and the amount withheld as it should have been done. At least the participant would have the correct amounts reported. I dunno, maybe that constitutes tax fraud so don't take it as advice. The sponsor might have to try to explain it all at some point. An ounce of prevention is worth a pound of cure. It sounds like nobody was in charge here.

It's not a big deal either way, is it? What year are we talking about; does the employee even know about the contribution? If he does, then yeah it is a bit ugly to take it back. It shouldn't be a big deal to amend the plan either (and, saying the quiet part out loud, if you do just leave everything alone, nobody is going to question it).

I think you are conflating two things. 1) You can't WH 100%. 2) You must report unpaid participants on the 8955-SSA. I wouldn't call the latter "'THE' alternative" to the former, although I suppose it is true that if you can't WH 100% you are going to have to file the 8955-SSA. No there is no way to know what may have been done already. If not sure, you can try reporting participants as being reported prior and now paid out but your mileage may vary. It's best to save distribution records FOREVER so that when someone comes and says "SSA says I have money in this plan" you can say "no, they say you MAY have money in the plan and here is proof that you took it."

We've done this often. You have to have some cash. Estimate the amounts, transfer in-kind, and even things out with cash after you know the actual values transferred.