Stash026

But that only applies to an EZ, right?  If it's a plan filing a standard Form 5500 or a Form 5500-SF, they need to be filed regardless of the asset amount?

Is it still accurate that if a Plan has less than $250,000 in assets they don't have to file a Form 5500?  I know I've heard it before, but I don't see it in the instructions for the forms.

Thanks in advance!

I have a one-person Profit Sharing Plan that wants to name his daughter as a "contingent trustee", just in case something were to happen to him.  How would we go about that, or is it really more of a beneficiary (or just add her as a second Trustee)?

Thanks everyone!

We have a Plan that is Top Heavy and utilizes a Safe Harbor Match.  In prior years they've made Profit Sharing Contributions, and therefore have made the necessary Top Heavy Minimum contributions.  Due to the economic climate this year they are likely not going to make a Profit Sharing Contribution for 2019.

I know that the rule is if there are no additional contribution/forfeiture allocations there is no Top Heavy Minimum.  I just wanted to make sure that it was a year-to-year decision, and that they were still exempt of the Top Heavy minimum if there was no Profit Sharing made for that year.

Thanks in advance!

47 minutes ago, C. B. Zeller said:

Extended to July 31

https://www.irs.gov/retirement-plans/deadlines-extended-for-403b-plans-and-pre-approved-defined-benefit-plans

Perfect, thank you!!

I know the deadline to restate DB Plans for PPA had been April 30, 2020.  Do to the lockdown, was that extended at all?  I can't find anything, but wasn't sure if I missed it.  Have a prospective client that wasn't restated, so trying to determine if there's an issue.

Thanks!

Followup question as I work through this.  Would the two plans be tested for ADP together or separately?  

Thanks again!

I have a client who has about 60 employees, with a small portion being classified more or less as a leased employee that they send to other corporations (roughly 10% as of today fall in this class).  I don't foresee any issues with 403(b) or any other testing, given the size of the group, but currently they are offering a 401(k) Plan with a 4% Safe Harbor Match.  What they want to do is not be required to do the match for these leased employees, but want to be able to allow them to contribute.  

My first thought is to have two separate plans setup:

1) The current plan, just amending the document to excluded these leased employees, and continue with the 401(k) + Safe Harbor Match
2) A new plan (#002), which only covers the leased employees and have a 401(k) with a discretionary contribution

I can't think of any issues that may be caused by this, but I wanted to bounce it off everyone to make sure my thinking was correct and I wasn't overlooking anything.  I don't believe I can just excluded the leased employees from the Safe Harbor Match, but allow them to participate in the 401(k).

Thanks everyone and I hope everyone is well and staying safe.

4 hours ago, AKconsult said:

Does the plan allow hardship withdrawals?  The safe harbor hardship rules allow for a distribution to pay for the funeral of a parent, spouse, child or dependent.

It does not unfortunately.  It does allow for in-service for over 59.5-years old, but the participant falls short of that as well.  They are just taking a standard loan at this point, which is luckily within about $1,500 of what they wanted

6 minutes ago, BG5150 said:

Does the plan not already allow for loans?

Just curious.

It does, he's looking to take more money than he would normally be eligible for though

Thanks everyone!  Is there a definition as to what would make the father a dependent for the child?

21 minutes ago, ratherbereading said:

The rules are pretty clear.  I don't think that qualifies as a Coronavirus loan.  Maybe they could take an in-service if the plan allows or a regular plan loan.

 

You are considered a “Qualified Individual” (and eligible for the CARES-related options) if you meet one of the following criteria:

• You have been diagnosed with a coronavirus illness by a CDC recognized test.

• You have a spouse or dependent diagnosed with a coronavirus illness.

• You experience adverse financial consequences as a result of a quarantine, furlough, lay-off, reduction in work hours, business closure as a result of the virus, or because you cannot work due to an inability to obtain child-care as a result of the virus.

• You have experienced other factors determined by the Secretary of the Treasury

I guess they are hoping that it qualifies under the "other factors" provision.  I tend to agree, but just wanted to make sure and see if anyone else had any similar experience

I know they left the distribution rules somewhat vague, but here's the situation we are trying to determine if someone qualifies for a loan:

Participant's father passed away due to COVID and the member is seeking a loan to pay for the funeral.  We know the participant and spouse have not lost any pay due to the pandemic (and may actually be making increased salary due to hazard pay).  So, would paying for the funeral qualify?  Curious as to others thoughts.

Thanks in advance!

I believe the answer is no, but I wanted to confirm because I didn't see it expressly stated anywhere.  Can a Money Purchase Plan adopt the optional provisions under the CARES Act or is it not until age 59.5?

Thanks everyone!

I know there was an extension in funding an IRA with the due date of tax returns being pushed back until July 15.  I haven't seen anything that states the same is true for Employer Contributions for the 2019 Plan Year.  Has there been any clarification on that?

Thanks as always!

Thanks Mike!  Just following up, I have the same question about Catchup Contributions?

Thanks again!

I believe I have the answer, but can't seem to find the actual language so I apologize.  In the 401(k) + Cash Balance Situation, when calculating the EBAR to test both plans combined would you include the 3% Safe Harbor in the equation?

Again, I apologize if it is a simple question just can't seem to put my fingers on it.  Thanks again everyone!

I apologize if this has been asked before, but has it been established that if a spouse gets furloughed/loses hours a participant falls under the "adverse financial consequences" to determine eligibility for the in-service distribution/loan under the CARES Act?

Thanks everyone!

One of my plans limits the number of loans to 3.  Does the CARES Act override that or can the Plan continue to limit the number of loans under the law?

Just because I don't generally handle SEP.

Participant has maxed out on his 401(k) at his employer, but he also has a side business where he has a SEP.  I don't believe that he can put any EE money into the SEP, but even if he's hitting the $56k between EE/ER in the 401(k) he could also maximize the ER in the SEP right ($56k)?

I just wanted to make sure of the timing.  I know the Secure Act now allows you to adopt a plan up until the filing of your tax return, as opposed to December 31 of the Plan Year.  Is that in effect for employers looking to start a Plan for 2019 or does it begin with Plans starting 01/01/20?

I believe it's 2020 Plan Years, but I wanted to be sure.

Thanks!

What address would you use if we don't have a valid address?  Would you use the employer's address?

I had a Plan terminate last year and we were unable to locate about 20 participants.  We went through the searches, etc. and ultimately had the money rolled into IRA in their name so the Plan could terminate.  What is the requirement for 1099-R for these rollovers?  Do we do the 1099 with the last known address and just stick it in a file?  Is the 1099 required in this circumstance?

Thanks everyone!

6 hours ago, RatherBeGolfing said:

I think most documents reference the code section rather than a specified age, but it would probably depend on the document.  

Of course for the definition of Required Beginning Date on my document software it states "April 1st of the calendar year following the calendar year in which the Participant reaches age 70½".  I guess we'll have to be doing amendments for each document.

Thanks!

Does the RMD change for the Secure Act require an amendment to adopt for Plans?  I know things like the $5,000 distribution for a newborn requires an amendment, but I haven't seen anything where it says if the RMD changes also need one or if it's just an automatic change.

Thanks!