whitboston

Participant originally requested a lump sum distribution. Asked his Employer if he can change his mind. The original paperwork had not been processed so TPA told the Employer to have the participant to complete new distribution paperwork. The original request was never cancelled by TPA and in Nov 2018 a distribution check is issued to a participant as a lump sum distribution. Taxes withheld and participant cashes check. The "new" distribution paperwork is received and in Dec 2018 another (duplicate) check is issued to the participant as a rollover and sent to rollover institution. No taxes withheld and check is cashed. Lots of issues on this one, but if we want to correct it as if the lump sum distribution did not occur, how can we fix it? A corrected 1099-r has to be issued, but how do we get the taxes back from the Government?

Thanks. That confirms what I was able to find or really not find in my research. Another lawyer did confirm the same for me as well.

Company had a minority ESOP that they terminated over 2 years ago when new management came in to turn around the company. They now want to start a new ESOP and sell 100% to the employees. Can this be done? Any successor plan rules to be concerned about (they seem to really apply to 401k plans). Thanks.

Thanks. Yes, that is what I am concerned about that it would be considered exceeding the 402g limit. Maybe thinking too much about this, but the wording in the employment agreement makes me wonder.

Thanks. Does the wording have an impact on how much they contribute? Would it be treated like an employee deferral? Or can they deduct the full $18,000 and then get the full company match?

An employee entered into an employment agreement with his employer. It had a section regarding the 401(k) plan with the wording "any employer matching funds for the 401k plan would be deducted from the overall compensation. For example if compensation equals $300,000 and he puts in $10,000 into the plan thereby triggering a $10,000 employer match, then his compensation would be adjusted to $290,000" Can you do this? The company has a 401(k) plan and this person is a W-2 employee. Thanks.

No, they were not smart enough to do that. The check was given to the participant who cashed it to have ready for the closing.

Participant took a hardship distribution for the purchase of a primary residence. At the time of closing something came up and the participant did not end up buying the house. What happens at this point? Can it be put back into the plan?

I wouldn't change it. In two months out of the year, the employees will receive 3 paychecks (instead of two). For these months, I would not deduct a loan repayment from the 3rd payroll. If you do this, then everything is left consistent. You are simply moving from 24 paydates to 26. All other months will remain the same instead of two. Don't do anything drastic. Client does not want the responsibility of remembering not to deduct a payment. They have 17 loans outstanding and some of them will not end for 4 more years. Any other thoughts. I agree we don't want to do anything drastic.

Company is changing it's payroll cycle from semi-monthly to bi-weekly. For the outstanding loans, we need to re-amoritize the payments to reflect this change. Do we need to issue new loan paperwork to all loan participants since the actual frequency and loan payment amount will change? The other terms of the loan will not change. Any thoughts/comments are appreciated.

Does anyone have a good participant statement vendor that they use and recommend?