Bird

I agree with Mike, that would be a cutback. However, the trustees have, or should have, the ability to declare a special valuation date at any time in order to protect the (other) participants' interests.

I think if it is taken in one year it isn't considered a partial withdrawal.

I agree with Kevin C, contact the DOL. But recognize the odds of recovery are slim to none - the plan was terminated in 2016 so there are no plan funds to get money from. The only chance of recovery is to find a company or individual with responsbiliy and recover from that entity. It's a long time ago and your money could have been gone long before 2016. Some things still don't make sense, at least to me: I find it unusual that someone would volunteer that information. Plus it's one thing to divert money that isn't already in a plan but diverting it when it's already in is difficult, unless it went to another participant (possibly the diverter). Actually it's rare if not unheard of in my world to allow a withdrawal of 401k money at termination and not matching money.

I agree with Bill Presson. Not only should there be some "administratively feasible" language but point the participant (and the client) to the claims procedure in the SPD...it should say something about 90 days, and then another 90 days if the plan says so. A shrug of the shoulders and a "so sue me (the sponsor)" is all you/they can do really. We deal with participants directly a lot but of course there's a point where you explain that the plan sponsor is the Plan Administrator and you're cutting off direct communication because you don't get paid enough for the agg. If the client is the one badgering you then you explain it to them as you did to us and offer to pay out a reduced amount and then the balance, for two fees.

It might be ok. I've seen companies use a common paymaster to run payroll through another organization and from what I understand it is legit; the key is who is (really) the employer.

That would make the numbers work but as ESOP Guy points out, there shouldn't be unallocated money in a 401(k) plan.

Mike is correct of course, you have to subtract any employER contribution to get the net compensation available for deferrals. 'er contributions were not mentioned in the original post.

I guess what you are asking is what is the income base for deferrals, not how to calculate deferrals. IMO it is simply SEI X .9235. We have self employeds elect a dollar amount, not a percentage, to avoid messy calcs that serve no purpose.

What has s/he elected for deferrals?

Got it, I jumped to a conclusion or just didn't pay attention. Still seems like a bad way to control eligibility.

Curious about the reasoning for this - to somehow eliminate 100% vesting? IMO that's just certifying a “discontinuance of contributions.” I've heard of using a 0% MP plan for rollovers, although I'm not sure about that logic either.

I'm going to say I don't know because I wouldn't do it this way. You are effectively amending the plan document by drafting each exhibit, and in my world I don't see how it can't be signed (before 1000 hours are worked). But I would control all of this through profit sharing contributions, not CB credits.

Belgarath, I think the RMDs came from other participants' assets. Ananda, if I were trying to fix this, I'd have to re-create the transactions that occured and (I guess) somehow treat the distributions that were made from other participants as "loans" or otherwise treat them as money owed from that one participant to others. Then...I'm not sure how it would be fixed; the participant owes them money but has none. First step would be to ask for money back; assuming it is not coming back then (I think) ultimately the sponsor should be making that up. Honestly, more questions than answers...the big one being "how could this possibly happen?" Was an accountant handling the plan?

Nothing special. The surviving plan in a merger is really a continuation of both plans. You have to pick one as the remaining plan (i.e. name and plan number) for reporting purposes and do a final 5500 for the one that went away (I am deliberately not using the word "terminated"). There is a Q on the 5500 about assets that came from another plan. If you haven't restated them yet, there is a case to be made that because the remaining plan is really both plans, you don't have to restate the one that is going away, but it is, or should be, so easy to do a restatement that I would restate the one that is going away before the merger.

Whether it is a definitely determinable issue might depend on when this exhibit is drafted - and is it signed? In any event I wouldn't do it. edited for spelling

It depends on the location of the taxpayer. Follow this link: http://www.employeridentificationnumber.net/how-to-correct-information-on-a-filed-ein-application.html

That's how I read it. I've never seen it on a platform. Could be done with brokerage accounts by opening different accounts.

I might be over my own skis on this but in a DB environment, a plan could make the annuity payments (the monthly payment is a known amount) and in fact large plans will do this. In a DC environment, the plan would buy an annuity with the available account balance (yes it just the best the plan can buy with the amount equal to the participant's account balance) and essentially off-load that responsibility to the insurance company. Similarly in a small DB environment the plan would buy an annuity but now you are buying a specific monthly benefit and paying the insurance company whatever lump sum is required to do that. When you buy an annuity it is reported on the 5500 as benefits paid (including direct rollovers and Insurance premiums to provide benefits). At least that's how we did it the one time it happened, which I found fairly quickly.

Agree with Austin. But you can strip all kinds of recordkeeping fees out and pay them directly to get the actual fund fees down to a few bps for index funds and maybe 30 or 40 bps for managed funds (not starting a debate on which is better).

I think most of us would agree that the proper disposition of those funds would be to allocate as profit sharing in 2019, or maybe 2020 if deposited in 2020. Let's start with - when was it deposited? Large amount/small amount, multiple participants...? Welcome to the board, don't mean to give you a hard time on your first post!

that

It had a built-in sunset and by implication that sunset could be accelerated 🤔. (Just spitballing - good question; I think an argument could be made that once you made one the implication would be that they would continue until their statutory sunset. I'm not sure how or if you even could add a regular hardship "window" for a month or two or whatever.) This is what happens when recordkeepers overstep their bounds.

Agreed. This is being driven by behavioral economics - the book "Nudge" and others - and unfortunately grand thoughts don't work so well when you try to put them into practice, as the anecdotal evidence above indicates. Sucks for us.

If you're calling it a merger then 2020 would be the final plan year, and no 1099-Rs are needed. There is a Q on the 5500 about transfers and liabilities to/from another plan, and as I recall you have to reference that plan (EIN and plan number) so in theory that should be coordinated with the other plan's reporting. I forgot that they are asking you to do the 5500...it's pretty offensive that you are being called back to bail them out. I might cave in and do the same thing but at the very least I think you want to get ADP involved and find out exactly how they get the idea that they can come in and "terminate" a plan and not take on any reaponsibility for the final filings. If you totally clean up their mess the client and broker will not appreciate what you've done.

Interesting, thanks, I stand corrected.