Bird

I guess you are suggesting that this would be a conversion to Roth upon rollover; it's clearly not Roth money to begin with. The answer is that it is not eligible for rollover at all. As Luke Bailey notes, the citations might be tough to run down and connect the dots but I don't think there is any doubt about this.

I'm sure your software permits you to do that but doesn't it give you pause as far as being discriminatory? I may be in the minority but I think that comes under the catchall "pattern of amendments" language that effectively results in discrimination.

Yeah we used it in our tiny office. And being a TPA, we are used to doing the painstaking stuff associated with the filings so it worked. The user still has to do a fair amount of reporting and my gut feeling is that this doc is not a good candidate for that service.

I'm as cheap as they come but not paying a payroll service to properly get the spouse on the books is just dumb. I suppose you could get away with paying the spouse on a 1099 and then having the spouse's "company" as an adopting employer. Consider whether the spouse (and the doc for that matter) will be eligible without a requirement of less than one year and what that might mean for future employees and their entry dates.

Correct, the starting point here is that it is a PT to go into an investment with himself and the plan as co-owners. Then there are the potential issues of UBTI with a debt-financed property, and valuation. I don't think it's a crime to say "this is over my head - I say you can't do it but if you want details on why not or some possible way that it can be finagled, I can put you in touch with an ERISA attorney (who will tell you the same thing but charge a lot for it)."

I do

Any loans with that status should be (have been) "distributed" (just an accounting entry/no reporting) when the participant was eligible to receive a distribution. It's hard to think of a reasonable scenario where that shouldn't have happened before RMDs were due.

Break it down into bites: 1) what does the document say? Probably that with no bene, the default is spouse, otherwise children...but you need to do that research. An Ex-wife is not a spouse so it probably effectively mean children. 2) were the step-children adopted? If so then they are his children and share. If not then they are not his children and don't share. If anyone sees any room for fuzziness here please advise.

Good point. We use FTW and while I did do a quick look at the AA section, I didn't go to the BPD where this is found.

There is not one iota of doubt about them being participants. As far as where to invest the money, there should be a default fund. If they don't like it, they can move it to cash or wherever.

I believe the short and technical answer is yes. Whether it is possible in practice to comply with the notice requirements is up for debate, but I guess you could say that about a lot of pension stuff.

I don't know how you do it administratively (system-wise that is) because in our world TH mins get built into PS but yeah, I think you could say "no PS this year" and then just have the TH as a stand-alone...on a different schedule with vesting over time - of course that should be in the document already.

minor details 😀

If done properly, you would get two 1099-Rs, one for the (non-taxable) rollover and one for the distribution of the loan amount. The loan distribution would be taxable but not subject to the penalty since it is due to death. If you have enough cash you can roll over the taxable amount into your spousal IRA by the due date of your tax return and thereby avoid the tax. If you're saying that the total account value, including the loan, was, say, $30,000, and they incorrectly rolled over $30,000 in cash...well, anything is possible, but I have to be honest and say I doubt that actually happened. Unless it was a very small plan with a pooled investment fund and an accountant handling things. I wouldn't want to speculate on the 1099 reporting in that case.

We've un-terminated a plan once or twice. Do a new resolution/consent and say the effective date is changed, and re-communicate. I don't see how anyone is impacted negatively.

Please clarify/give an example; I'm not following what you are describing.

I don't see how you can have a MP plan in place with a required contribution and make the amendment retroactive, regardless of the notice.

Someone is confused. You should get 18K, and the 12K is indeed "offset" but it is a term we use to indicate the loan is being distributed as a taxable event - your entire account, including the loan, is 30K, and the 12K loan is offset from that total. You may have mis-heard or you might be talking to an idiot. Unfortunately that is very possible.

I think we need to know the date of the oldest unpaid loan payment before we can give any advice. I'm of the opinion that it is ok to have the loan as the only asset but somehow I suspect it really should have been deemed in 2020 which creates a different issue.

Yes of course. I thought we were talking about 415 with the "applied towards" discussion. As far as the rest, what are you going to do if someone gets SH for 2020 but has no comp in 2021? (Rhetorical Q; no need to reply...IMO it would be criminally silly to do anything other than just make the contribution and move on. I'm done here.)

No, apply to 2021 as an annual addition. If it exceeds 415 due to little or no compensation, then shrug your shoulders and move on. If it exceeds 415 because significant contributions are being made in 2021, well, I'm not sure because I've never seen it. (I'm giving a very technical answer above but I guess to be honest, in our admin system, everything would be going in as a 2020 annual addition. I wouldn't know how to split them out to 2021, except manually. I can think of one plan that consistently does SH late every following year and we just know that they never do more than the SH and don't worry about it.) Luke Bailey may very well be correct about the proper treatment - distributing as taxable income - but I suspect they (IRS) are aware of the issue and choose not to give guidance because they'd just as soon not create such a hassle for such a tiny thing.

No, that's an "issue" that I don't think Congress understood when they said SH was due 12/31 of the following year. Technically if someone had no income in the following year they shouldn't get a contribution due to 415 (if deposited more than 30 days after extended due date) but SH rules say they have to get it, so the general thinking is that the SH rules control.

(I think) the investment company can suppress those 1099s (-INT, -DIV etc) for retirement plans. Even if they don't, I don't think the IRS is reconciling them for businesses. The bigger issue is 1099-R reporting; messy at best if using the same EIN. That may be the point at which someone says "mmm, maybe that isn't the way to go about this." Personally, I don't think I've ever seen a plan using the sponsor's EIN; of course I'm mostly looking at our own plans. But just to be clear, we do not get an EIN if the plan is on a platform and 1099-R reporting is done by the custodian.

Anybody see this from Paychex? A Plan Transfer Fee of $1,500 will be applied to any client who transfers its plan recordkeeping to a new service provider and who is not currently/does not continue to process payroll with Paychex. Select the Plan Transfer Fee payment method from the options below. Note: If you do not select an option, Paychex will collect the fee from the Plan's assets. I'd think that ceasing payroll services and tying that to taking fees from plan assets is problematic.

Not necessarily; see RBG's response.