Bird

ESOP Guy, thanks for the info/good to know. (It's still low on my worry list.)

Think about the purpose of the form - to let Social Security know that a participant is entitled to benefits from a plan, so they can tell/remind them when they apply for SS retirement benefits. It doesn't make much difference if that is reported on a 2013 form or a 2014 form. (Odds are they will be removed anyway, later.) I seriously doubt that there is any auditing done for proper completion/filing of the 8955-SSA. The penalty is $1/participant/day, and I believe the participant would be considered to be "reported" whether you used a 2014 form or a 2013 form, so you are correcting the mistake now if you use the 2014 form, and not begging to be penalized as you would if you used the 2013 form. So...I would report it now and move on.

IMO, it doesn't matter who gets the RMD while the account is in the dededant's name. So if it's the year of distribution from the plan, you determine the RMD from the account first. Then, or simultaneously, you determine how each of the benes is taking their share. If one or more takes enough cash, then the RMD is satisfied. Of course the one(s) who roll over to inherited IRAs will have their own separate RMDs in future years. As I see it, the gov't doesn't care who gets the cash/taxable distribution, as long as it is distributed. I do not have a cite... (I suppose the plan might have a policy that everyone has to get a share of the RMD, just to simplify its operation.)

Is the word "only" (my emphasis in the quote) really in there? If so, I don't understand. Why would a plan say "lump sum only" and also have that option? I could understand if "only" wasn't in there. As noted, it would be unusual for a plan to force a lump-sum payout when RMDs are due.

There are a lot of complications to this one and we're never going to be able to give a direct answer. Lots of good points have been made above, like: plans don't have to offer a precious metals fund the issue is what would the "preferred" fund in the lineup have returned compared to the actual fund that the money was mapped to? (But since the OP has acknowledged receiving the notice, any "case" pretty much falls apart right there...s/he had the opportunity to select a fund and didn't.) Another thing - liability, if there is any, will hinge on the exact role of the "investment advisor." If it's a broker, paid a commission, then there isn't, or shouldn't be, fiduciary liability for that role. If it's a Registered Investment Advisor, then there should be fiduciary liability for that role. (Setting aside the point above that the participant apparently did receive proper notification, as least as that would be defined legally.) It sounds like it was mishandled and very, very poorly communicated. It's astounding that the investment advisor and/or trustee/investment committee would ignore the fact that a partner in the merging company had such a large position in a fund that couldn't be replicated and didn't take some extra time to make that perfectly clear.

merciless, if you did not get a blackout notice and/or a notice of the change in investments due to mapping, then you may have a claim. Unfortunately, you can't just go to someone and say "make me whole" - you'd probably have to go to court. How much $ is involved? It's probably not worth it. (Are you saying that you worked for a company, the company was bought out, you are working for the new company...and they didn't have a meeting to explain this? Either you are not telling the whole story, or they handled this very poorly.) Austin, I agree with you. The whole point of self-direction is to let participants choose their investments, and indirectly their risk tolerance. Target funds might in fact be "better" in the long run but trying to force it through re-mapping is, as you say, more likely to get you sued. At the very least I'd want to make sure everyone understood very clearly. As far as why - I think there are some people with too much time on their hands who tend to overthink things.

I wouldn't bother getting one. I think the amount to enter would be end of year (i.e. check the "No" box).

I agree.

Right, the issue is probably preparing the 1099-R, as well as the option election forms. Who is the third party administrator?

Plan year ending 8/31/14 ends in company fiscal year ending 12/31/2014. I say yes. Deductions for both plan years ending in 2014 are linked to 12/31/14 fiscal year. (I think...)

Off the top of my head, I agree with you. I think the rule is specifically to prevent an end-around on taking out 401(k) money before 59 1/2.

"W-2 compensation" doesn't necessarily mean "Box 1 of W-2." Our (Ft. Wm) document defines it as: W-2. Wages within the meaning of Code section 3401(a) and all other payments of compensation paid to an Employee by the Employer (in the course of the Employer's trade or business) for which the Employer is required to furnish the Employee a written statement under Code sections 6041(d), 6051(a)(3), and 6052. There is a subsequent question asking if deferrals are included or not. Of course if your definition is "Wages, tips and other compensation on Form W-2"...well, I don't know! I would think there would be an option to include or exclude deferrals but as you note, it seems contrary to the definition itself if you include them. Funny how even the simplest things are complicated...

It's probably in a different section of the document, or else you are over-thinking it. Odds are that they re-enter on their date of re-employment. An election to "contribute" (I assume that's what you meant when you said "...does not elect to join the plan...") has nothing to do with entry dates - if the plan says they re-enter when re-employed, then they are a participant on that date. Contributing should not be confused with participating.

I would expect so. We'd generally have an end-of-year requirement, unless we had everyone in their own group, where you don't need it and don't want it so you have full control without fighting the document.

To $0, and I would not file a 5500. We sometimes get statements for a few pennies that carry on for months or even years.

While we generally reconcile accounts to the penny, I would round this for 5500 reporting.

Putting a cap on "100% of the first..." is not 100%. No good.

Kevin, I really appreciate your thoughtful answer. Thanks for taking the time to explain. Ed

Just to clarify my answer, my understanding of the IRS' concern is that participants might (theoretically) make decisions based on the contents of the SH notice, and they don't think the contents should be changed. While allocation formulas are not in our notices, they do reference the SPD, which contains the formula. I'm definitely not one who thinks that only the things on the "permitted" IRS list can be changed, but I do believe that this is what they don't think should be done. If it is not aimed at that, then what is it aimed at? And I don't think it takes a terribly narrow reading to say that it doesn't matter whether it is a "maybe" notice or not. Treas. Reg. §1.401(k)-3(e)(1): “Except as provided …, a plan will fail to satisfy the requirements of section 401(k)(12) … and this section unless plan provisions that satisfy the rules of this section are adopted before the first day of the plan year and remain in effect for an entire 12-month plan year. In addition, except as provided in [the exiting rules], a plan which includes provisions that satisfy the rules of this section will not satisfy the requirements of §1.401(k)-1(b) if it is amended to change such provisions for that plan year.

We've been making them wait until 2016...for the most part. Every once in a while we might do a change in groups (since it is not changing the SPD), but going from pro-rata to something else is pushing it, IMO. You could adopt a new plan and then merge as of 1/1/16.

At a practical level, the answer is "it depends on who is issuing the 1099-R." If I had a pooled plan and forms signed today, I would say the transaction happened today. If it's daily val'd and the recordkeeper does 1099s, I'm not arguing with them about it - whatever their system says wins; tough nuts for people who try to do things on 12/31.

Your topic title is "...each participant in their own group." If that's what the plan says, then that is what it means - each group is effectively defined by the participant's name. No further distinction is necessary. If you're being thorough, after the end of the year you prepare a memorandum from the Plan Administrator to the Trustee dictating who gets what.

As I understand it, the existing home was a gift, it is rented out, and the poster wants to buy a new a different home for a principal residence. I'm not sure about the ramifications of owning a "house" as a rental investment and then buying a "home" to live in - my guess is that it would qualify for the penalty exemption that applies to IRAs. There is no penalty exemption when taking money from a 401(k) so this was, I think, a good place to start - no you don't want to do this since the penalty would apply (plus taxes - generally, just because there isn't a penalty, doesn't mean it is a good idea to take money from a retirement plan; taxes alone can be significant...using retirement money for purposes other than retirement is generally a questionable move).

Just because it fits those parameters doesn't mean it is ok. Would you add something that says "must be over (or under) age 50"?

I had this once. American Funds had the employer (owner) sign for the participant. I think it is one of those things where you have to persist and eventually find the right person who understands that they have to take the money.