BG5150

So, bad news. We cannot use the PBGC program for this because the date of the plan termination is October 2016. The program is only available for plans terming on or after 1/1/2018. (I thought it was October 2017, but still out of luck...) Any other thoughts on how to get around the spousal consent issue? Because these people are missing, we can't even be sure if they are married or not.

You may run into a problem though, if your opening participant balance at BOY 2020 is less than EOY 2019. That number cannot go down, only up (new participants entering 1/1). Might have to amend the 2019 filing with the correct participant count. You can leave the audit.

Nope. If participants are under 80, you MUST file as a small plan.

I think putting the money into an IRA as basis is the best way to do it. Side note: the lady was found. When they said she "went to Uruguay," we thought she went back home and finding her would be difficult. But she was only visiting and came back. But this was a good academic exercise and now we have a good place to start if this ever happens again.

What would happen if you had 10 NHCE in 2015, but only 2 of them are still employed? Could you just give a QNEC to just those 2? What if it was 2 out of 15 or 4 out of 30?

But chances are it will be returned, just like the unopened distribution paperwork.

I'd be hesitant to do that so soon.

Problem is the plan is terminated, so the suspense account is of no value.

If the person is no longer at that address, what's the point?

"After tax" or Roth contributions? Did you check with your 401(k) custodian? Maybe you are looking in the wrong place.

Here is a basic SHM spreadsheet I came with a while ago. Feel free to use it. No warranties or guarantees of any kind implied or given. Though, if you look at the examples in there, the calculations fur under 3%, between 3-5% and over 5% come out correct. Safe Harbor Match Calc.xlsx

When someone is missing in a plan term and the money is auto-rolled to an IRA, where do you send the 1099-R?

Participant requested a distribution from a terminated plan. She actually came in and picked up the check. Withholding was properly taken and submitted. Her check was never cashed. And she cannot be located. (and the Trustee took it upon herself to stop the check) What to do now? Can they open up an IRA with after-tax basis with these funds?

§ 2520.104b-3 ...the plan administrator shall furnish this summary, written in a manner calculated to be understood by the average plan participant, not later than 210 days after the close of the plan year in which the modification or change was adopted.

Side note: they would have to file a Form 5500 instead of a 5500-SF

Isn't it usually the IRS first into the fray when it comes to 5500's?

This one always gets me. The deadline to furnish the SMM is 210 days after the plan year in which the amendment is adopted. So, if a plan amends to allow in-service withdrawals effective Feb 1, 2021, they don't have to tell the participants about it until August 2022? 19 months after the effective date of the amendment? Doesn't seem right.

I still think the investment houses would do a better job. Again, I think it's an important issue, but I don't think it needs to be in the SPD. Do you put investment diversification info in the SPD?

This stuff would/should be provided when the account is opened in their name or when they create the account themselves. My thought is if someone is perusing the SPD to that granularity in order to see the cybersecurity warning/disclaimer, they will be similarly scrutinizing the account setup.

Can you re-run the test and see if the difference is material?

In my world, the SPD is created by the document software. I guess we could add to it, but then I'd have to hire an attorney to give me that language. Plus, there are many investment arrangements different plans can be a part of. Some are merely accounts at a big provider (think John Hancock or Voya). Some are in individual brokerage accounts (like Merrill Lynch or LPL). Some are a combination. Some plans are in a pooled account where the participants don't have access to their "accounts." I have some plans that have Profit Sharing in a pooled arrangement, but the 401(k) is employee directed. So I would have to come up with several blurbs and appropriately add them to the SPDs. Them if the funding arrangement changes, remember to change the SPD. Too many moving parts, I think. Cybersecurity is an important topic that might best be served by a joint effort between the custodian and plan administrator.

If you know how much the deferrals were, why were you using the figures from the investment house? Or are you concerned that these misplaced earnings affected the earnings calc on the refunds?

The match is NOT a QNEC. It stays on a vesting schedule (if there is one). The correction for deferrals is a QNEC b/c deferrals are 100% vested automatically (like the QNEC). The ER is not punished my having the match correction 100% vested, too.

Oh, shoot. I didn't realize I was responding to an 11-yr old post...my apologies...

The 1099 won't be "proof" Code G implies a direct rollover. There wasn't one. I don't this guy is a 'crook.' Looks like he changed his mind and is trying to do the right thing an claim the income. The only think he "gets away with" is the 20% withholding. But he's just gonna have to make up for that and pay the tax. Crummy situation, and I would just send a revised 1099-R, code 1 or 7, no withholding. IRS comes knocking, what you you (the plan administrator say)? Guy said he was going to rollover the money, we put code G. Then he told us, and we saw, this did not happen. So we corrected the form to show what actually happened.