BG5150

What are the hurdles to changing the vesting percentage computation basis? A plan currently has 1,000 hours for YOS for vesting. Can it easily change from hours counting to equivalancy or even elapsed time?

Do you really think the IRS would disqualify a plan over that?

Not at all.

The point of the formula is to calculate the vested balance in an account where there was a partial distribution. If that happens, it's not as easy as just applying the vested % to the account. As in my example, Ppt has balance of 10,000 and is 50% vested. So 50% of 10k is 5k. But if he takes 1,000 he's left with 4,000 vested and still 5,000 unvested. The vested/unvested % is now 44.4%, not the 50% level.

I guess I don't have the relevant account balance correct. I thought the formula would calculate the vested balance using the total balances right before and right after the distribution.

I did mean loans. Thanks.

So, if we are excluding sources, we still use the vested amounts in the verboten buckets to determine max match, and the balance in the available sources can further curtail that...

What reference source is that, KC?

I think there are two things to consider: What sources are available to fund a loan and what sources determine the available amount of a loan. So, in my cases above, #1 would only have $5,000 available and #2 would have no loan available matter how much vested money is int he other sources?

Either my math or my senses is failing me (maybe both!) here. Participant is partially vested in a source. She takes a partial distribution. The BPD gives this formula to determine what her vested account balance will be after the distribution. So I have: P = 50% AB(1) = 10,000 D = 1,000 AB(2) = 9,000 R = 1.111 (10/9) So, the math according to the formula is: .5 (10,000 + (1.111 * 1000)) - (1.111*1000) = 4,444.44 Shouldn't the vested balance be merely $4,000? She had $5,000 vested, took 1,000 of it and so should only have 4,000 vested. Where did I go wrong?

But we do consider the vested balance in all of those partially-vested accounts, right? Example: Participant 50% vested Deferral: 10,000 Match: 5,000 PS: 5,000 Total: 20,000; vested 15,000 Available loan: 7,500 But what if half the vested balance is more than what's in the fully-vested account(s)? What if there is no fully-vested money in there? Example: Participant 50% vested Deferral: 0 Match: 5,000 PS: 5,000 Total: 10,000; vested 5,000 Available loan: 2,500. But really zero because there is no money in a fully-vested source.

As to actually moving them, does it really matter? They both have the same vesting schedule (unless the are QACAs with 2-yr cliff) and same withdrawal restrictions. Will there be a Profit Sharing this year? If so, just move the "overages" to the PS account (inclusive of earnings, of course) To the others: is there a problem if a bigger percentage of HCE vs NHCE got these matches throughout the year? I'm guessing people who did not defer got nothing. For example if the two owners got their match and only 3 of 10 NHCE were deferring, you have all the HCEs getting the ostensible benefit of the SH contribution being in the market during the year against 30% of the NHCE.

I would move as much as possible from SHM to SHNEC (with earnings!) The rest (including earnings) gets put in a suspense account (it doesn't get "forfeited"; these are not non-vested funds) for use to offset future ER contributions. In fact, there cannot be any Employer contributions until that suspense account is exhausted. Those funds cannot be used to pay fess. See EPCRS.

It wouldn't be a BRF? Some people have access to more sources for a loan than others.

I didn't think it would work. Otherwise everyone would just close their IRAs the last week of December and open new ones two weeks later.

Can a plan have a provision in its loan program that loans are only available from sources that are 100% vested for the participant?

President of a Chamber of Commerce currently has a Simple IRA. They are staring a 401(k) Plan in 2020. He will turn 70.5 in 2020. He want's to avoid an RMD. My reading of the rules says that for any IRA, there is no "if still employed" rule, and an RMD must be made. But what if they liquidate the account on December 28, 2019, and don't deposit the check in the 401(k) plan until Jan 15, 2020? This way the IRA has zero balance on 12/31/19. The 401(k) plan won't have any balances until 2020. As always, your thoughts are appreciated.

That's the way we do it. Check or CC to us, then we file with our CC.

Can a person "roll over" her US 401(k) Plan balance into a UK based plan tax free?

Anyone?

What entails "freezing" an account? I've done a few QDROs over the years, but never gave it much thought what happens at the record-keeper. My (semi-educated) guesses: Contributions continue Distributions & loans are suspended What about exchanges between investments? Are they suspended?

I agree with Larry, because what happens when you get a bunch or participants taking loans? One person is reasonable. When you have three, five, ten loans, then things get more complicated.

From the IRS page:

Right, but what happens if the assets aren't all paid out? Is the accelerated vesting now bunk? I understand the need to file 5500s, but are there any other concerns?

Is that holding account asset available to all participants?