Santo Gold

We have a 401(k) Plan participant with a balance in the plan, DOB in 1946, still employed, is a non-key. This year (2021), the company was purchased by another business. The old company is no longer in existence and the 401k plan is being terminated (not a plan merger). The new owner has hired most of the prior company's employees, including the above individual, and is crediting service with the prior business for all purposes in the new owner's 401k plan. Balances from the old plan can be rolled into the new plan immediately. Would an RMD be needed for this individual this year? We could do the RMD before she rolls her balance into the new employer's plan or after the rollover? And if one is required from the old plan, would it also be required from the new plan in subsequent years even though she would continue to be employed? Thank you.

I have a small investment group (5 people) looking to start a new 401k plan. They will want individual brokerage accounts for each participants. In general, would they receive a 404a5 notice from the brokerage account company? For example Schwab or Fidelity? If not, would the prospectus' they receive as well as the contract information that details what their account fees are be enough to satisfy the content requirements of 404a5? Thank you

Makes sense. Thanks

Yes, I meant to keep the question on the 8955, not the 5500. Thanks

Realized there is another question: On the 8955-SSA, would you now show all previously reported terminated/vested participants as paid out on the final 5500?

The plan has been reporting on an accrual basis. The post merger deposits were for the old plan.

The plan has been reporting on an accrual basis. The post merger deposits were for the old plan.

We have a 401k plan that was merged into another plan towards the end of the plan year (calendar year). The merger date was 12/15. The last 401k contributions were deposited into the new plan as was the full employer contribution for the plan year. Preparing the final 5500 for the old plan, would you report either that final 401k contribution as part of the overall contributions in the old plan? Same with the employer PS? Thanks

Not a DB plan; just a 401k. No PBGC

For calendar year 2020, if a plan covers only 1 individual and that individual is not the owner or spouse, would they file a 5500(S/F) or a 5500-EZ? Thank you

Thank you for your replies

This involves a fairly standard smaller 401(k) Plan that started in 2016. At that time, all participants completed a beneficiary form. The one participant completed his, naming his spouse as primary beneficiary and his son as contingent beneficiary. 2018 the participant divorces and then marries spouse #2. But never changes the beneficiary form. 2020, the participant passes away. Even though a new beneficiary form was not completed, the new spouse would be the beneficiary, is that correct? Is that automatic? Thanks

Understood and thank you for that reply.

No, terminated participants cannot take loans from this plan (we don't have any that would allow for this) but I think that plans can allow loans to terminees. My question centers on whether the plan sponsor can eliminate the loan feature for all participants or just to eliminate it for terminated participants or newly eligible participants. Thank you

Just looking for confirmation, but a participant loan program in a 401(k) plan can be eliminated as loans are not considered a protected benefit. Does eliminating the availability of new loans apply to all participants, or just to terminated participants and/or newly eligible participants? Thank you

If a plan uses match formula of 100% match on the first 1%, plus 50% match on the next 5%, is that considered a safe harbor match?

I can ask a few more questions, but the he seemed set on a 401k.

I am working with a doctors office and their 401k plan. They currently have a One year of service/1000 hours eligibility requirement to enter the plan. However, they would like to change that to 6 months elapsed time requirement for new doctor hires. The new doctors would not be owners. If the new doctors make less than $130,000 (2021) and are not HCEs in their first year employment, then there would not be a discrimination issue for 2021, is that correct? What if in future years their earnings are above the HCE dollar threshold? Is that something that could be viewed as discriminatory a year or 2 after they are hired? I would not think so since I think any eligibility discrimination would be applied in the year of hire. But I wanted to check if that is correct? Thank you

Thanks very much. I appreciate the replies

I am talking with an attorney who has a practice with no employees, just him. He has dba business name and he puts all revenue through the dba which he reports as a sole prop on his tax return. But he does not have an EIN and seem reluctant to create one. He wants to start a 401k for himself. Can he do that without an EIN? Thank you for any comments.

I think I know the answer to this but was hoping to hear if that is correct: Participant enrolls in a 401k plan in 2016 and names his wife as beneficiary and son as contingent beneficiary. Lump Sum only distribution, no J&S. The wife passes away and then, the participant passes away on 2020. The participant had remarried (not sure when) before he passed away in 2020. A new beneficiary form was not completed. Is the son still the beneficiary since he was named as the contingent beneficiary on the beneficiary form that is on file? Or is it the new spouse, even though there is no beneficiary form stating her as the beneficiary? I think the new spouse is the beneficiary. Any comments are appreciated.

Happy New Year everyone. Any help is appreciated. If more information is needed let me know. Around 50 doctors/partners in a medical management group. Each partner receives a K-1 of around $100,000 annually from the management group. The same doctors are also part of a very large regional hospital network from which they are maxed out in that the 401k and DB plan through the hospital. Their compensation directly from the hospital is over 7 figures. Can they establish a retirement plan through the management company and, assuming no discrimination problems, max out with a 401k and/or cash balance plan as well? Thank you

Thanks both Alonzo and Bill. Bill's reply was more what was at issue. The decision to make after-tax is 12/31, but for this type of business entity, the deposit can be later. Thanks

We have a 401k plan that allows for after-tax employee contributions. The plan sponsor is an LLC that is taxed as a sole prop. Can the owner deposit the after-tax contributions up until his tax return due date or does he have to deposit those by 12/31? Thank You

I should have added the following question: The same error occurred in 2018 and 2019. Since those 2 years are within the 2 year window, they can be handled via SCP. However, would it be required to file those under VCP since the problem started in 2017? To me it is a separate problem for each plan year and so SCP should be used for 2018 and 2019. In addition, the assets were under $500,000 in 2017 but over in 2018 and 2019, which would make the user fee jump from $1,500 to $3,000, which we would like to avoid. Finally, if we do have to file VCP for all 3 years, does the user fee apply to each year (3 user fees) or is 1 user fee all that is needed (and would that fee be $1,500 or $3,000)? Thank you