Bird

BG5150 gave me this tip and I think it is what you want...the oldest of the new posts since I last visited are at the bottom and newest are at the top.

Notification in this case would be a courtesy, not a requirement. No timeframe for notice. My radar is up about making sure that the calculation of the match is done in accordance with the plan document - i.e., is it really done on a payroll basis according to the plan, or is it being done that way in practice? Could make a difference if the plan says match is based on annual pay and annual deferrals.

Easy for us to say, and I agree, but in the real world there are no consequences for such errors, unless it comes down to a monetary issue. The plan sponsor sees it as us arguing with the p/r company over how many angels fit on the head of a pin.

Because SIMPLE IRA assets are held in...IRAs, the concept of a merger is inapplicable. You could start a 401(k) and allow participants to roll over their SIMPLE balances, but it's their choice. If you do start a 401(k), it invalidates the SIMPLE, so the usual recommendation is not to start a 401(k) in the same year, but if you don't mind a lot of messiness, it can be done. That is, the 401(k) doesn't have a problem, but the SIMPLE does.

Yes he can get $10,000 PS

That will make great cocktail party conversation I am sure

OK but to be clear, it sounds like the old software provider was incorrect and the new one is correct.

I agree it is incorrect. Makes we wonder if you are talking about a retirement plan software system, in which case I can't imagine that kind of error, or an accounting software system, in which case I can imagine it.

I've heard something like that before. What does he expect you to do about it...?

They are two different businesses; the partnership income should not be added to his Schedule C income. lf the partnership wants to start its own SEP it may.

and to be clear, the 60 days starts when the loan is offset, not when the 1099-R is received. The original language in the question leads to this cautionary statement.

pone55, "solo 401(k)" is a marketing term, nothing more. As Bill notes, when you have a single participant in a 401(k) plan, you have a "solo 401(k)," if that's what you want to call it. What is it you want a new plan to do that the old plan can't?

I don't think it's that unusual. There are pros and cons to everything, in this case, the buyer gets to deduct what is effectively a purchase by paying the buyout as wages. More expensive to the seller to receive ordinary income than to get it as an asset sale, but maybe it's easier and maybe it's all factored in. Anyway, I think you'd be out on a limb to call it anything but wages. But there might be - are - ways to keep the seller out of the new plan, assuming there is one, like just excluding him.

They can disclaim but do they want to and should they? Why the pressing need to get the money into the estate? (Other than the attorney creating this red herring in the first place.) If I were one of the 4 children and I would get less by having the money go into the estate, I'd be reluctant to sign a waiver, without having some good reason. Sounds like a typical case where somebody doesn't know what they are doing, trying to get everyone else to stand on their head.

I'm getting grumpier and grumpier in my old age. What you are seeing here is incompetence, and (probably) not anything sinister. Your employer is either incompetent or the new payroll company is incompetent, or some combination. You don't say whether the old payroll company was doing plan administration; apparently so, and the new payroll company...isn't? Payroll and plan administration are two different functions; maybe the new payroll company signed on for more than they can chew. Anyway, they shouldn't be stopping your deferrals arbitrarily; I wouldn't necessarily make the proverbial federal case out of it but you could certainly rattle their cage a bit and say that experts say it shouldn't be done this way. Good luck and feel free to write back.

Sounds like you've thought it through pretty well. They probably won't/can't renegotiate it because they are, effectively, still paying off upfront commissions and if they lower the fees it comes out of their pocket. Once they get past that recovery period they will usually cut out the costs associated with commission recovery (but won't unless you ask them!). My experience is that insurance companies exist in this business solely, or primarily, to pay upfront commissions. I guess in the very large plan market they are competitive but I'd have to see the numbers on a specific plan to believe it. IMO they are bloated and inefficient.

Without looking at your spreadsheet, you are probably right. You can either pay the surrender charge all at once, or the high contract fees over time, and they are probably about the same, or the SC is less. Nevertheless, it's a tough sell. Sounds like a good-sized plan; if you're talking about hundreds of dollars per participant then they shouldn't squawk too much. If you're talking about thousands for some participants - (deep breath) - it may be the right thing to do but you are really going to get some resistance. The only way to deal with it is probably to explain the harsh facts - some agent got an outrageous commission for selling this and the insurance company recaptures that commission from the participants over time. The only way out is to cut your losses and run. As far as Guideline - I haven't heard of them, but I work in different corner of the field probably. I did see something that said they were a start up in 2015 and that worries me a bit. Don't want to have to go through this again or have them bought out and go to some other platform. If you've shopped it carefully and feel like that's the best option then fine, but if you haven't shopped it I would recommend that before pulling the trigger. Good luck!

That's a red flag for me, especially if your brother was doing everything. You might have two plans - banks, and especially brokerage firms, just care about getting the money and don't care about doing things right. Now, it may not be a disaster to have two plans, but be aware that you might have to do two sets of paperwork to unwind all of this. And don't forget, or be advised, that even if the plan(s) were under the $250,000 threshold for filing a plan tax return, you are required to file a return for the final plan year.

I think you just need to use comp from the payroll system. Everything else is a distraction.

I don't think you can stop them from doing that. To be fair, others here think differently.

I'm sorry for your loss, and that you are having to deal with the aftermath. "lump sum" in the plan definition means it has to go out of the plan in one lump sum. It does not mean it has to be taken as income - the beneficiaries can set up beneficiary payout IRAs and take minimum distributions over their lifetimes. If they want to do this, it has to come out of the plan by Dec 31 of the year following date of death. If they wait beyond that, it would in fact have to be taken under the 5 year rule and would not be eligible for rollover. There is some confusion between the plan rules and the RMD rules that I'm not trying to explain because I think the answer is to just roll it to bene payout IRAs. Did he have a third party administrator assisting him or was this done through an investment company? A third party administrator is the best source of direct assistance for this (not an accountant, or broker if he was using one, with all due respect). And not that we mind you asking; feel free to write back for clarification.

Thanks for participating, and best wishes for the future.

I think it is at any time during the year.

Not sure what the significant of $2500 is but Penchecks will do everything for you, including the 1099. We use the EFTPS system here in our office to handle that.

Yes