K2retire

Or the buyer could allow existing loans to transfer, while continuing their policy of not allowing new loans.

I feel like I should know this answer, but I'm not coming up with it. Participant terminates employment at age 69 and rolls her balance to an IRA before the end of the year. After the first of the year, the employer deposits a discretionary contribution to the account. Participant will be 70 1/2 in the year of the deposit. I know her RMD must be the first money out, but with a zero balance at the end of the prior year, I don't remember how to calculate it.

first born

When he was a teenager, I would have paid them to take him!

Deposit it to the plan and try to get it back from the employees.

Depending on the document software, it could be automatic or it could require a Participating Employer Agreement or a Joinder Agreement.

Since is his deferrals are still above 3% of pay after the refund, you are fine.

There do seem to be quite a few folks in the same age range among my acquaintances in this business. (Dave, I'm right behind you.) Years ago, I recall working in a small office with about a dozen other women and thinking it was going to get really ugly when we all started getting hot flashes at the same time. The young people that I meet in the retirement business seem to be going into sales and investment advice more than administration. As we were looking for someone to add to our team last year, we only had one applicant who wasn't catch up eligible.

Much as we would all like to believe that participants should be responsible, the DOL's current position is that it is the plan sponsor's responsibility to keep track of the participant.

The only time I've heard of this an auditor mentioned it to a client who was terminating their plan. That motivated them to be sure they got the assets paid out quickly so they could take advantage of only doing 1 audit for the final 2 plan years.

Agreed.

And there's the crux of the problem! Most plans I've worked with require that ALL of the previously distributed funds be returned to get the forfeited money restored.

They were wrong!

Interesting -- I'm accustomed to seeing a provision but excluding non-owner doctors or dentists from participating in the plan at all. Almost the opposite of what you're trying to accomplish.

My husband had one of these with his first wife because Civil Service Pension rules don't recognize QDROs. It ended up working to his advantage when she didn't pay some of the bills she was obligated to pay and he applied her "alimony" payments to them directly. (Gotta love a creative lawyer!)

Is it a discretionary formula?

The 1099 issued to you when you take a distribution should be coded to indicate that the 10% penalty does not apply. Most plans will permit you to take part of the distribution in cash and roll the rest into an IRA, even if they require you to withdraw the entire balance.

Isn't the accounting company the service organization in this case?

I have a related question. I'm working on a takeover plan. According to the prior recordkeeper, the insurance policy was held entirely in the PS source. The plan sponsor makes the premium payments directly, which I understand counts as a contribution for the year. This year they have indicated they don't want to make a PS contribution. Can I allocate that premium payment to the safe harbor source even if the rest of the asset is held in the PS source?

For a non-owner employee it makes sense -- give back their money and leave the employer's money in the plan. If you gave back the employer contribution, they would lose out.

I've used both Relius and Datair. Relius seemed more logical to me -- but that may be a reflection of how my mind works more than how the programs work. I have no idea of cost for either.

Or she can repay the $40,000 and take the $10,000 as a taxable distribution. It doesn't have to be all or nothing.

When was the bonus paid? If they didn't give a notice of the error to the employees within 45 days, I believe they are subject to the old correction rules -- 50% QNEC plus full match (if any) plus lost earnings.

Perhaps tragedy?

Bottom line -- ask the record keeper if you need to request $10,000 or $10,050 to be sure the check you get is for $10,000. I'd bet money they don't all do it the same way!