Bird

A merger is an action taken by the employer(s) to combine two plans into one. It's a continuation of the plans under one roof...no options for anything, including rollovers, are needed or permitted. Good Q.

Well, just to be contrary, we have a few clients who haven't gotten bonds and there seem to be no repercussions. On audit, our experience is that the IRS will say "get a bond." I have a recollection of reading about a case where the IRS dropped the hammer on someone but it was only because they were obstinate and essentially refused after multiple warnings.

Then the question arises - will Globo-Payroll allocate TH minimums in their plan anyway, and are you in a position to tell them they don't have to? I wouldn't want to be on record making that assurance. The dynamics of this situation are "interesting."

I know the world's not a perfect place but if you are running both plans I don't think you can do so properly without the BPD for Plan A. Ultimately, that will provide your answer. If you're not running Plan A (and I'm not sure I have ever been or would be in that situation) I suppose you can punt. From what you are saying Plan B absolutely must provide the TH min. I'm not sure it's so technical that Plan A doesn't have to. Sounds like a bad or poorly drafted document.

Before you go crazy, find out exactly what they want and why. No sense in doing anything until you understand exactly what they are asking for. It might be some standard question that you just say "no there is no DRO for this plan" and move on. Be persistent. They are big and arrogant; just know that going in and keep asking.

I'm actually not 100% sure. But I am certain that at least one platform - Am Funds PPTPA - takes the loan fee out of the requested amount, so you have to gross up. I don't think that is universal. I might be out in left field on all of this though, especially since I misread the original Q.

Fair enough. It might depend on whether this is record-kept and who the recordkeeper is; might have to request $1100 to get there.

You might want to re-think or re-type that. (How is the fee paid?)

Yes. It is so small that a correction is unnecessary. What is frivolous about that argument?

For sure, target date mapping speeds up the process, since you are not giving anyone a choice. But is that the best way to do it? I don't know what it's like to convert a plan with 1000s of lives, but I know that in plans with single digits or a few more that you're going to irritate as well as confuse at least some people when you don't give them options. The idea of mapping to TD funds, and only after the conversion allowing participants to move their money, is just not the way to do things, IMO. If someone loses $1 because you didn't give them a choice, they're going to be PO'd.

They probably have 90 days to deny a claim, so presumably they could pay it within that timeframe. As RBG notes, to what point? The optics would be lousy to say "we're going to wait to see if the market recovers" and then have it go down even more, and then say "well the market is down so we're going to do a special val and make you participate in the losses."

It doesn't guarantee it but it makes it more likely. Different folks have different priorities and they feel like it's not their problem, even though they caused it (!)

Larry, the trend now is to map everything. Existing assets as well as elections for ongoing investments. That way there are no re-enrollment meetings (maybe after the conversion)...and no new forms. Which is indeed problematic, because that means there is no way to make deposits of new contributions during the blackout period. (The elections come over with the assets.) The cynic in me sees it as a way to subtly (or not so subtly) map to funds on which the platform provider makes more revenue, knowing that inertia takes hold and participants are unlikely to make changes. Or simply trying to minimize time and effort. It's just a lot easier to transition when there are no new meeting and the big providers suck stuff out of their respective systems. Not necessarily a good thing. Good for the advisors who want to show they are "being proactive" and moving plans every few years, and good for the platforms who are just trying to accumulate assets, thinking they are going to be the Amazon of the retirement world. Sucks for us TPAs.

Shrug. I don't think I want to opine on how long is reasonable. Just long enough to tell the investment provider he is employed...I don't think anyone else (IRS) cares too much but I would make it the client's call and not my recommendation. Of course that income could trigger unwanted contributions.

And how much are they going to pay for the failed test and/or processing refunds? I'm in the (apparently minority) camp that would rather be a little under. There's an irritation (and cost) factor to all of this.

Either just roll it to an IRA instead of the plan, or (maybe) rehire the former owner for a while if that is sufficient to get him in the plan.

I see two likes already but I dunno, that bold part is really about "depositing vs allocating" not "depositing vs mailing" IMO. I'm not saying it's not absolutely g-d stupid to be mailing checks 7 business days after payroll, and maybe they should be considered late on general principles of punishing stupidity, but I don't think the cites fully close the circle. There are plenty of cases where mailing is considered depositing so I think a case could be made that they aren't late. I'm not saying we don't have clients like this but it sure is annoying to have to deal with it when there is no good reason for it.

Still hard to follow, and BTW all caps just makes things harder to read. But the statement above is a warning sign to me...a useful shortcut to determining compensation for self-employeds is "what are they paying self-employment tax on?" Here they are not really self-employed, so only the W-2 income would have SS and Medicare taxes paid on it (the equivalent of self-employment tax). Unless I'm missing something, the clause above "AS WELL AS AN ESTIMATE OF THE INCOME ALLOCABLE TO THE S CORP" is inaccurate - that income is not subject to SE tax (or SS/Medicare tax through W-2 wages) and isn't retirement plan compensation. If they are trying to have it both ways - low W-2 comp to minimize SS/Medicare taxes, but high compensation to maximize contributions, they can't. Now all of a sudden we are talking about a cash balance plan and not just a 401(k); that raises an eyebrow. It may be that everything is perfectly legit but it's hard to say for sure. Again, it would be helpful to know your position in all of this. It appears you are not on the pension end, maybe payroll? If so, kudos for raising the question.

fmsinc, as noted by others, there is nothing about the SECURE act that changed your scenario. Yes a Participant could elect an annuitized payout, whether storm clouds are on the horizon or not. A QDRO could not supersede such an election. I don't think it would amount to "getting away" with anything as the spouse would probably request and be entitled to some kind of payments, not directly from the plan but with the knowledge that the participant is getting "x" per month. I'm far from an expert but I don't see anything profound about it.

It's kinda hard to follow but I think this gets to the heart of it. and is probably (?) what is happening. If you (Chris123) are saying that the 401k withholding is coming from partnership income that is really going to an S corp(s) then that is problematic. The confusion comes because you seem to be describing a scenario where withholding is in fact coming from S corp W-2s, but the pension person is describing something else. It might help if we knew your role in this.

Well I just had a well-written tome but somehow lost it but long story short, I think you are right. I was focusing on the 100% vesting issue on termination but the other issue is 401a4 nondiscrimination, and the Carol Gold memo, while not addressing this specific situation, is, I think, relevant. We are told that "the terminated eligible participations require an allocation to pass non-discrimination" - not, e.g. to meet the gateway test, which is cut and dried; these are optional allocations that could be $800 or $8000, which underscores the meaninglessness of the benefits. I don't remember if this has come up or not but I think in our shop we would tell the owner that if s/he wants to keep things clean, we need to at least partially vest these people in order for the current year allocation to "count" and to avoid potential trouble with the termination, we need to 100% vest them. If we are literally talking about $800 (even if X2) it shouldn't be a problem.

Interesting. The fact that it is pooled means the contribution does not have to be made before the forfeiture occurs, IMO. I think you can make a case that the contribution is allocated as of 12/31 and then is immediately forfeited in 2019 due to termination of employment. That means those same forfeitures that arise from the contribution being made reduce the contribution accordingly. We generally don't write plans with immediate distributions for a lot of reasons, but in this instance, it seems to have a "positive" impact (if the goal in fact is to not vest these participants). Even if the language said they are paid the following year (and forfeit then) I think a strong case could be made that this occurs on 1/1, presumably before the date of termination, with the same result - they forfeit before the date of termination of the plan. In a strict mechanical sense, I think you are on firm footing. I'm not so sure about other potential discrimination issues though. Might it be a partial termination if those terms were connected to the ultimate closing of the company, if that's the reason for the termination of the plan? Just the close proximity to the termination of the plan is not smelling very good. I've mentioned before that back in the days when we submitted plans for approval upon termination, the IRS would request info on terminees in the last 5 years...it never caused a problem, although I found it kind of irksome that they would want to poke around at someone who term'd 3 years earlier, but I think they were looking for patterns, and this pattern is pretty bad. It might depend on the overall size of the plan but I'd lean towards vesting them as part of the termination, due to potential discrimination issues.

Most funds have restrictions on jumping in and out (and in...). It's not necessarily easy to find those rules but if you look for "frequent trading" restrictions you might find them, usually some combination of dollars (e.g. over $5000) and time (e.g. 30 days)...it might even be a catchall "we reserve the right to restrict trades for any reason." Odds are pretty good that there isn't any practical effect though. FYI a bond fund (which is what you'd be buying) is a combo of many individual bonds, and therefore doesn't have any particular maturity date (even individual bonds that have maturity dates can be bought and sold so you never have to hold til maturity...you might get less than face value though if interest rates rise, or the credit rating decreases, but we're getting in too deep I think).

We're all saying that you are (almost certainly) permitted to contribute to both. I'm not sure what you mean when you say "required." All the other words you posted are not relevant. As I said earlier... If your employer insists that you can do one and not the other, they are almost certainly mis-reading the document. I have to think it is a matter of figuring out how to put the right things into the system. You might have lost out on some matching contributions, but not necessarily, if matches are "trued-up" at the end of the year (and the final calcs are not done on a per-payroll basis). I think they're gonna say that you entered something wrong...if you can eventually figure out how to get what you want you should be able to figure out if you did something wrong or not.

(I think) you're not seeing it spelled out in the regs because the Code is obvious; it's the employee's election to do all or a portion of elective deferrals as Roth; see below. Not that it's relevant; we all know the plan doesn't say what the "Plan administrator" says. pskadot, I suggest you condense your 16-point list down to "look, I wanna do 6% regular and 3% Roth; how do I get there?" (b)Qualified Roth contribution program. For purposes of this section— (1)In general The term “qualified Roth contribution program” means a program under which an employee may elect to make designated Roth contributions in lieu of all or a portion of elective deferrals the employee is otherwise eligible to make under the applicable retirement plan.