BG5150

Just charge them an extra $3,000 for something....

How do you prove a postmark, unless you send it registered mail or some such method?

Hopefully, the plan is not Top Heavy.

If they qualify to file an SF, there is a question about the Sched A amount of commissions. I think it's in 10. That's all you need.

Different firms handle these tranactions in several different ways. Some have the check sent directly to the particiapnt. Some have the check sent directly to the company. Some have the check sent to the "non-financial" administrator for futherance to the participant. Some have the check sent to the "non-financial" administrator for futherance to the company for furtherance to the participant. Some firms even use a combination of the above. At my last job, we left it up to the plan sponsor. Each firm has its own reasons for its procedures.

This made me giggle. Where is this administration firm? North Korea or something?

OK. I agree with the fact that it's not a refinance. Makes sense. However, I do think the person would have to complete new loan paperwork. I don't think a mere amortization schedule is a legally enforceable document.

I would do an EZ. What's the penalty if it's caught? File an SF?

Does the plan allow for refinancing of loans? If so, I would redo the loan with the correct paramaters. Otherwise the pariticpant is bound to the original loan paperwork.

Side note: has anyone seen a plan that DIDN'T allow catch up? What was the reasoning behind it?

They can almost certainly supress the 1099-R, especially since it has not been issued yet.

Remember, now that the plan is no longer a 1-participant plan, they need to get a fidelity bond. Also, where are the assets held? Are they qualified assets or no? If more than 10% of the assets are in non-qualifying investments, they need to get a bond for the full amount of those assets...

Have the RK document what the criteria are to "auto-default" a loan. Then have them document when and where in the amortization schedule the loan payments satisfied those criteria. Did the RK come up with the loan agreement? Or did the plan adminstrator or TPA do it? Compare the answers from the frist two questions to the language in the loan agreement. Do they match up? If not, put your concerns in writing and ask the RK to respond to them point by point. Keep plan adminsitrator and plan sponsor and even the investment professional involved each step of the way.

And a word for the plan administrator: if the RK cannot maintain records and process transactions that are not only following IRS/DOL regs, but also following plan provisions, then a change in RK is in order.

First thought is that the 1099 hasn't even been issued yet!

Correct. I was going by the OP stated condition that no distributable event had occurred. Oooopppps. Totally missed that.

Only until the partiicpant has a disributable event, right? Then it is offset and he's back to square one?

Are YOU starting (or buying) a TPA business? Personally, I'd be wary of someone running a TPA firm who needed a retirement plan primer.... Have you looked into the ASPPA intro materials?

Thanks, Tom!

I used to have a handy-dandy spreadsheet that helped calcuate self-employment comp given net sched c or k-1 income and the rest of the ER cotnributions. Does anyone have one handy for 2015 they would like to share?

I think in a partial plan termination, I could make an argument: Say the company has two offices of 40 people each, one in LA and one in NY. The company closes the LA office. Partial plan term. I would argue that only the people who worked in the LA office were affected if there were no other reductions in staff in the NY office other than voluntary terminations or dismissal-for-cause of employees in NY.

Again, make sure it goes through payroll...

Is this reward offered to everyone? Is it taken out pretax from their paychecks? (Is FICA still being taken? If I get a $1,000 reward, is only $940--or whatever--going into the 401(k) plan?)

Since it is no longer a 1-participant plan, a bond would be reqiured for the non-qualified assets to avoid an audit. Unless there are 2 plans. I was going with the 1-plan idea.

If he's still working it would be silly to take the loan balance, unless he is having trouble making the payments.