BG5150

I would say so. From the Datair BPD: Nothing in there talks about distribution amount. Only account balances. Furthermore and conversely, the automatic rollover rules only mention distribution amount, not account balance: So, to me you don't get to rollovers until you satisfy cash-out threshold.

I'm "snickering" at the term "broad."

Potential disadvantage: You are bound to get conflicting information between the two forms (I want 10%/no withholding, I want my full account/$4,500, eg). Potential disadvantage: Even though you have a captive audience, the participants may get annoyed at having to fill out two forms. Potential disadvantage: Possible delay in processing due to needing to different forms in good order. Potential disadvantage: Storage of both sets of forms, and trying to keep them togther.

I don't see it as contradictory at all. 1. Read the document to get the cashout threshold. It will probably be $1,000 or $5,000. Is the vested account balance over that? (Don't forget to check to see if a rollover account is part of that balance!) If yes, proceed with the distribution process. Send your letters, make your phone calls, do your internet searches. 2. When the paperwork comes back, or you realize you have a missing participant AND the vested account balance is less than the threshold, do the distribution. If the gross distribution is over $1,000 you need to roll it over to an IRA. If it is under $1,000 you can a) send the participant a check if you know where they are or b) send it to an IRA if you cannot locate them.

In our document, the automatic distribution is based on the vested account balance at the time of the distribution. It is the value of the payout that determines if the money goes to an IRA. So, if the VAB (in some of the adoption agreements) is over $1,000 you cannot initiate the washout even if the resulting distribution is under $1,000. In the case of the OP, if the AA allows for auto-distribs at $5,000 I think it's okay. I doesn't matter if the plan doc allows for auto-rollovers, the adoption agreement must allow for it, too.

CB are you saying to just send a check? I don't think you can. Rules are the vested account balance has to be less than $1,000. It's not. The rules don't say vested account balance net of fees... Vlad, do you know if these people have received paperwork (or instructions on how to begin the distribution online) in order to get their money and an admonishment that they will get a check if no election is made? If not, I suggest you just send the amount to an IRA, b/c chances are the check will come back as undeliverable.

Thanks, RGB!

Plan has had an investment in gold coins for several years. These are not qualifying investments, I don't think. So, all along they should have been filing a "regular" 5500 with a Schedule I attached. All along, the bond was for mare than the value of the gold. Any harm or foul here? Maybe next year file the I? Did we really commit perjury by saying all the assets were qualifying in the past 5500's?

Turns out, company is not out of business. They just terminated the plan. But they lack the funds to pay the SH.

Company went out of business, terminated its plan and all assets are liquidated. Problem is, the 2019 3% SH was never deposited. What do they do if the owner cannot afford the $32,000 3% Safe Harbor?

No.

If you are calculating the match on a payroll basis (don't confuse calculation with deposit), then you will never use compensation over the limit, unless the pay for that period is in excess of $285,000 (I want that job!). If the comp did go over the limit that pay period, you should restrict the compensation to the limit for that pay period. Also, it is good policy to put match caps in place in your payroll system. If it's dollar for dollar up to 5% of pay, you instruct the program to cap the match at $14,250. If you are calculating the match on an annual basis, then you are already (or should be) capping the formula with the max comp. Kevin, what would you do in the case of someone who makes $$600,000 a year and decides to put in her deferral in the last payroll of the year, or out of the late-September bonus check? Does she not get the match b/c she passed the cap sometime in July?

Again, conditional: 402(f) Notice for distributions, SMM/SPD for amendments.

1. Get Mirco$oft's HR to give you a copy of the QDRO procedures (they should have sent you one already). 2. Like others said, it could be that MS decided not to qualify the order for some reason. If that is the case, they must let you know the reason. There are a lot of things a DRO must include and things it cannot include before the MS Plan Administrator qualifies the order to make it a true QDRO. Divorce attorneys and judges all have different expertise levels when it comes to DROs, so yours may be deficient in some manner and the parties involved have no idea. 3. Like someone mentioned, a company usually has up to 18 months to qualify (or disqualify) a DRO. (It's an absurd amount of time, I know, but I think the rules go back many years where determining what exactly the ex-spouse would get was more difficult) 4. I agree that your attorney (or another attorney who is well-versed in QDROs may have to get involved.

The ER is asking me whether or not it should be withheld. The adoption agreement merely states that Elective deferrals must be at least 1% of Compensation and nor more than 90% of Compensation. The deferral election form says I elected to reduce my salary by X% or $Y and have it contribute this amount as a pre-tax Elective Deferral. (similar language for Roth) I told her not to take the deferral b/c it's the same check date, and to me, the same pay period. But, I told her the match due for the period is based on both the regular and bonus compensations.

But if someone was withholding 5%, you'd take it, right?

Plan does not allow for separate election for bonuses. Participant elected $500/pay period for 401(k). Bonus is coming this week as a separate check. Do they take out the $500 from the bonus, too?

So the Employer did not take out 401(k) from bonuses. Correction is a 50% QNEC (with earnings). However, the participant's deferrals are Roth. Is she now losing out b/c the earnings on the QNEC are taxed, where the earnings on a Roth deposit wouldn't have been?

Just because you file on a cash basis doesn't mean you forsake checking to make sure all the deposits were made. It just makes putting together the 5500 a little easier. We file many of our plans on a cash basis, but every year, I reconcile out the receivables.

Some of my clients insist on the accrual 5500's so the Employer contribution matches the company's tax return.

Why would you think the IRS would audit a plan like that? There are no red flags. 10 Actives. 20 Accounts.

Also to ask: would a prudent trustee allow (probably) non-savvy participants access to all sorts of investments, especially ones that a) involve tremendous risk and/or b) are complicated and difficult to understand?

It's a discretionary match. Are the people who were "over matched" HCEs? If not, you can probably come up with some formula tat can fit the circumstances. If they are HCEs, then I think forfeiture is a good way to go..

A couple things to consider: Are you SURE that 2018 really passed? Are the method and assumptions you are using exactly the same as 2018? Of note: the term'd people do NOT get a TH contribution. They don't have to get anything if there is a last day rule. But if they do, they must get at least the gateway. If the allocation calls for more and there is a last day rule, you need to do an 11-g amendment to get them what they need to pass the test.

The question to start with is: from which paycheck(s) were the deferrals taken? If before 3/15, then the deposit is most definitely late. If after, they are not valid deferrals, because the plan was terminated. Was anyone else allowed to defer after that date? (This may warrant looking into past years, too. Does the owner really just get one big paycheck at the end of the year for the deferrals? Or did he get paychecks throughout the year and he just deposited the deferrals at the end of the year? Did those deferrals really get taken from each of the paychecks? Or was the W2 "corrected" to show the deferral at the end of the year?)