Bird

Mmmm, I think some of the earliest PPA restatements needed a fix and that's what it sounds like. There should definitely be a full restated AA.

Probably not...without an interim val. As discussed above, it depends. If the assets haven't changed that much, then maybe not. The first thing I would do is talk to the participant, the trustee and the investment advisor if there is one to make sure everyone knows the implications of this event. The second thing is to recommend that they move assets into cash, of approximately the amount of the distribution - you're going to need to do that anyway, and this keeps you from chasing your tail after the date of the interim val. Then plan on a 5/31 interim val. Eyeball the assets after 5/31, and if not significantly different from 12/31/17, then just use those values (i.e. no interim val). If different, then do the interim val and process the payout.

I am totally confused. Answers to this post seemed to assume an interim val was being done but I don't see anything that says or implies that is the case. I would probably recommend an interim val whenever someone is taking 44% of plan assets. Unless I knew about it ahead of time and then we would generally recommend moving the estimated distribution amount into cash before the year-end valuation, so that part of the account would not be subject to fluctuations.

I'm not sure why you would think "stop" means stop forever but it does not. Did(n't) you read replies about following the terms of the plan?! Why would you want to amend the plan instead of just telling this person "sorry you have to wait until July to re-start?"

I don't think there's any difference between "suspending for a few months" and "stoppage and starting again in a few months." I don't think any plan would require ceasing contributions to be permanent (!). We allow changes each payroll period - IMO, it's easier/cleaner and does not lead to more activity. As noted above, you have to see what the plan says. Some (most?) will allow a stop at any time and a "change" quarterly, monthly or whenever. You do not have to amend the plan to do whatever she wants, just make sure that what she does complies with the document.

Her answer isn't very precise. Next time you call, ask specifically if they are doing "third party administration" on this plan. Also if you want to send me a private message with the company name and if possible, tax id number, I can look up any Form 5500 filings. They won't necessarily shed a lot of light on the situation but might give some clues.

I heard somewhere, probably here, that they aren't great on small cases. I hope that's not true.

This might get a little confusing but I hope it helps... There are different parties involved and sometimes duties overlap: Transamerica is a "recordkeeper." They are holding the money and keeping track of it by participant and type of money (401k, match, etc.). They're also keeping track of loans to some extent and obviously decided that your loan defaulted for lack of payment...unfortunately it wasn't for lack of payment, it was for lack of deposit so the loan should not have defaulted. Once the payments were taken from your paycheck they are considered "plan assets" but obviously there is a massive screwup/theft in not depositing them. Unringing that bell is not easy but if you are persistent you should be able to get it corrected. Your employer is the Plan Administrator (note capital P capital A). That means s/he has certain responsibilities/signs forms etc. It does NOT mean that s/he knows anything about running a plan (obviously). There is or was almost certainly a "third party administrator" (TPA) involved; someone who is filling out forms for the PA to sign, including tax returns, etc., but there's a lot more to it than that. This is the person/company who would know about missing deposits etc. It could be Transamerica and it could be someone else, possibly a smaller local company. Next time you talk to Trans you should ask if they are the TPA as well. Unfortunately, my guess is that if they had a local TPA, that person resigned a long time ago for lack of payment and/or knowing about the big problems. Good luck! Keep after the DOL and shame them into doing their job. Letter-writing ain't gonna cut it...

It should have been withdrawn as an ineligible contribution, and coded as such. So, no tax deduction on the contribution and no tax (or penalty) on the money coming out. But the IRA custodian will definitely issue a 1099-R, so getting the coding right on that is critical...and maybe not easy to fix if already in the system. I'm not sure about the loss. My gut says no.

The way it was explained at the Phila ASPPA conference was that if the DOL did not appeal, and the other appeals were denied, then the rule is kaput. And that's what happened.

There might be an argument that you can't add the SHNE at that point in 2017 and it is therefore null for 2017. I'm not sure I want to be the one making the argument though. Barbara, are you with the original TPA, or taking over from the p/r company now, or...? Might help to know the players. Has someone confronted the p/r company with this malpractice? I'd be looking to push blame and costs for fixing on them.

It is reported as a taxable distribution and the participant reports it as received but non-taxable on her return. It should not raise any red flags or otherwise cause a problem b/c the receiving IRA should issue a 5498 showing they received the money. No, nothing changed to affect this and it really is not a big deal at all. Other than the fact that someone screwed up and made everyone else jump through hoops to fix that screwup. Annoying and really should be billable.

There are no magic bullets to fix this. Even if the employer all of a sudden deposited the missing money, with lost earnings , you have the issue of the loan default that shouldn't have happened, and fixing that is difficult (well, it's actually easy but getting the right person to do it is difficult). You need to be very persistent and not accept the BS that you will get from your employer and also from Transamerica (they will probably shrug their shoulders and try to say none of it is their problem). As noted above, if there is a "third party administrator" for the plan, they probably know exactly what is going on and can save everyone a lot of time in trying to dig up answers. I don't think I'd hesitate to go the DOL sooner rather than later. Good luck and feel free to write back.

If everything you say is true, then your employer has effectively stolen all of the money that should have been deposited to the plan, and the problem has been compounded by the loan default. Do you check your Transamerica statements against what should have been deposited? How big is your employer (how many employees)? If you are no longer getting an ADP check then it is likely they weren't paying ADP either. I'd contact Transamerica again and see if they are providing administrative services or just recordkeeping; if the latter then there should be another party involved, a third party administrator, who probably knows what is going on. At some point you have to confront your employer about all of this, and if you get nowhere, then your last resort is to go the Department of Labor. Again, if all of this is true...almost seems too bad to be true.

Back before the IRS caved in and allowed "everyone in their own group" allocations, we used to be concerned about allocation formulas being definitely determinable, and sometimes used "super-integrated" formulas which called for a rate of, say, 50% in excess of TWB. Those allocations would in fact have to be cross-tested. Even the IRS in those instructions calls new comp an allocation method (they sort of clarify it by defining it as anything that uses an employee classification), but it's really a testing method. 2A is used to report anything that is not pro-rata or permitted disparity, or I guess the same dollar amount to everyone.

No. Instructions say to use 2A if "...the threshold or additional rate exceeds the maximum threshold or rate allowed under the permitted disparity rules of Code section 401(l)." An integrated allocation is presumably one in which the permitted disparity rules are in fact followed. (The term "permitted disparity" replaced the term "integrated" a long, long time ago.)

It doesn't really matter where the contribution is deposited as long as it is a plan account - you don't say how the plan is invested, but if it is on a platform they will typically re-open an account very easily. If it is self-directed brokerage or similar accounts not on a platform, you either have to open a new account for the participant, or if you have an omnibus account, it can go there. If it is more than 90 days since the original paperwork was completed I think you need new forms (or is it 180 days...?).

We typically make plans effective on the first of the year with certain provisions, like deferrals, effective during the year. Don't know of any reason not to do that.

Gasp!

No

Sounds like there are shared employees; a whole 'nother issue.

There was nothing in the original or any other post to indicate this was the case. If you were just commenting about other plans then fine. But there is a distinction between "deposited" and "allocated" - I consider mid-year deposits in most cases to be estimated contributions that are not really "allocated" under the terms of the document at that point. The only time they are "allocated" under the terms of the document (and therefore subject to vesting rules) is when the document says so - i.e. per payroll, per quarter, or whatever.

Reality: If money is incorrectly deposited it is definitely ok to "take" it out of an account. It is not a forfeiture although casual usage and in fact instructions to the investment provider might use the term "forfeit." The fact that it is done through careful and accurate mathematical calculation, but nevertheless done incorrectly because it did not comply with plan terms, isn't much different from accidentally moving a decimal point, or simply calculating incorrectly, or whatever other mistake you can think of. Perception is a different matter and having said all of that, I'd be inclined to leave it in the account. Of course as suggested, either the plan provisions or the procedures should be changed to align with one another.

If you're going to calc and deposit each pay period then most likely you should have that in the plan, or at the very least not have any allocation conditions. To be clear, if you say the match is determined each pay period as per the plan document, then that is it - i.e. there should be no final/annual calc with potential true-up. But if the match is determined on annual pay, then those deposits can still be made each pay period but I would consider them estimates, subject to review after the final annual calc, and subject to potential true-ups.

I can't say that I looked at the regs but I don't think so. Oh wait, I just read your comments and yeah, I think you got it right - see, we always do our vals on an accrual basis so when you talk about a 9/30/17 account balance that would already include any contributions made after the end of the year for the year. In most cases, that would include accruals made after 1/1/18, but I do think you could exclude them.