Santo Gold

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

A match formula was not applied correctly and all participants were short on receiving their match for the 2017 plan year. It is now 2020 so we are passed the 2 year window and we are considering the errors significant. Is it correct that the employer should deposit the missing contributions plus an earnings amount as soon as possible or should the VCP be filed and wait to hear from the IRS before taking any corrective action? Thank you

Thank you for the replies.

A participant is 63 years old and per the plan, he can take an ISW (59-1/2) of all of his money. The NRA is 65. He has Roth, rollover, 401k, safe harbor and PS money in the plan. He is 100% vested. He wants to take an ISW from the plan just from his Roth. Is he required to take the ISW first from any of the pre-tax accounts? The recordkeeper is saying that but I don't see where in the plan document that is required. Is that an IRS requirement? Thanks

An participant in a 403b was fired and has requested distribution of her retirement plan accounts. She has also filed a grievance of wrongful termination through her union and wants to be re-employed. Although I'm told it is not likely she will win, Should the plan act on the distribution request, even though there is a chance she would be rehired soon? Thank you

Thank you for the replies. I am double-checking on the omitted employees to confirm.

I am looking at a non-safe harbor 401k plan that failed the ADP test (passed ACP) in 2017 and 2018. Only 1 of the 3 HCEs were required to take money back and that was done each year. About 15 total participants are shown in each years ADP test. However in reviewing that plan now, it seems that from 5-10 non contributing eligible NHCEs were left out of the tests. Adding them back in will make the test fail even worse. Can we have the employer make a QNEC for these past years even through we already made a distribution of the excess to the one HCE? Or do we have make an additional payout to the HCE since we already made what would be a partial refund? Thank you for any replies

We have a terminated 100% vested participant (under 59-1/2) who wants to take all of her money out of the plan as a cash distribution. The plan has not adopted any of the CARES Act relief measures. The participant is claiming that 20% is not required to be withheld since she is claiming she was impacted by COVID19. But this is a distribution due to termination of employment, not an ISW. Is she correct? Thanks

Larry - in regard to question 1: when you say the "full contribution for the covered period (8-24 weeks)", does that mean: (1) any employer contributions deposited in the covered period count towards forgiveness? (2) if an employer makes an ER contribution deposit in the covered period in an amount estimated to be for the entire 2020 plan year for all participants, does the entire amount count towards forgiveness? Thanks

We have a small employer who wants to make a profit sharing contribution to their plan for 2020 plan year in July, 2020, with the understanding that it can count towards the PPP loan forgiveness. Eligible participants employed on 12/31/20 can share in the contribution with no hours worked requirement. Terminees have to work 501 hours. (1) Has any new guidance been provided that would confirm that the above is permitted and count towards the PPP loan forgiveness? (2) Does the deposit have to be into a segregated participant account or can the some/all of the deposit be into an unallocated account, to be allocated after year end? Thank you

Thanks for pointing that out. I re-read it and saw the problem. The employer wants 1000 hours in a 12 month period, but the participant can enter immediately after hitting 1000 hours, even if that is in less than the 12 months. The language that you show is what we are looking for. Thanks

Checking if the following eligibility condition could be used in a plan. The employer wants to keep PTimers out of the plan and those who are PT will work less than 1000 hours. But the employer also wants to bring FTimers into the plan after they meet 1000 hours, but bring them in immediately or the month following they get to 1000 hours, even if they meet that in less than 12 months. Using a prototype document, if we use less than 12 months for eligibility, we cannot have an hours requirement and the PT would be able to enter the plan. So we need eligibility to be 12 months and we want the 1000 hours with it. While our prototype does not have this specific eligibility condition as an option, it does have an "other" eligibility allowance and we could state this in that section. But is this eligibility condition allowable othewise? Thank you

Thanks for those replies.

Lets say a plan you used to be the TPA (TPA #1) for goes to another TPA firm (TPA #2) 5 years ago. You the sold your TPA business 2 years ago to a different firm (TPA #3). That plan now gets audited and it turns out something was done incorrectly with the plan document you drafted for them over 5 years ago and IRS fines and penalties are assessed. TPA #2 did not draft the document being questioned. Is TPA #1 still responsible/liable for that old document, or does TPA #3 have that responsibility? I assume there is language somewhere in the sales agreement about past clients, but I was curious whether that normally transfers old client responsibility to TPA #3 or does it stay with TPA #1. I suppose TPA #2 could also be responsible for not catching and advising on fixing the error.

This is a long way off for us, but when the time comes to see a TPA business, how are terminated plans/clients or plans that moved on to another TPA typically handled? For example, we have clients that have been gone for 3, 5 even 10 years. If we were to sell the TPA business, who maintains responsibility for any out-of-the-blue questions or follow ups on those old clients, the new TPA or the one that is selling? I assume that gets worked into the sales agreement, but in general, does the new TPA take that on? Thanks

The save--the-file-then-open-it trick worked!!! I did not know about that. Thanks so much Lois.

Is software needed to file a small plan form 8955-SSA, even if it is a paper form? The IRS website has a pdf file but clicking on it the message comes up stating that my pdf viewer may not be able to display this type of document. It then gives a link for the latest adobe, which I did and downloaded, and still will not display. Any thoughts or solutions are appreciated.

We have had a 403(b) plan that has been inactive for well over 10 years. It is a hospital plan that was previously bought out and taken over by a new medical organization. No new contributions going into the plan past 10 years, just withdrawals. The plan has never had more than 100 participants and currently have around 50 accounts in it. Since the plan data is easy to obtain, the new organization has chosen to file 5500s each year even though I do not believe they have been required to. The deadline for a new 403(b) document is almost here (June 30th). Even though the plan is frozen and allows no new participants, a new document is still required, is that correct? Thank you

Just curious if you were able to use a current document, submit that with any attachments and all of the caveats and explanations about nothing previously having been available. Was that enough to get it through?

Is there really no statute of limitations? Would the IRS or DOL ever randomly go back 7+ years to audit a 5500? I thought there was a 3 or 6 year period that they would not go beyond that for a 5500 or plan audit?

It has employer contributions for all years.