K2retire

If the person is not an employee, how does he or she have any money in the plan to withdraw?

Many plans allow a hardship for a beneficiary's need. Is the spouse also the beneficiary?

Are they truly asking for the trustees' SSNs, or are they really asking for the SSNs of the participants? I've heard from employers who didn't want to provide participant SSNs, despite the need to issue 1099-Rs to those participants.

I know that the rules that apply to qualified plans don't apply to government plans, but I was always amused that my husband's Federal Thrift Savings contributions were separately classified as deferrals and catch up, even though his deferrals were usually less than any other limit.

Many record keepers will handle it.

Some documents spell out whether or not there is a true up. Others leave it up to the employer's discretion each year. Check the document carefully.

I had a similar situation and the ERISA attorney we consulted advised waiting until the audit was available.

I wondered about that as well. I'm working with a potential new client who has yet to file his 2011 5500. I'm surprised he hasn't received an IRS notice yet.

Then there's the obvious question. If it requires both a loan and a hardship withdrawal from the plan, can the participant really afford the house?

"If you have 100k in a traditional 401k loan," You don't have the money in a 401(k) loan until you borrow it. And you can never borrow more than $50,000 at a time. You got a tax deduction for your salary deferrals when you deposited them. You have not paid tax on any money your employer put in. When you take out a loan you do not pay tax UNLESS or UNTIL you default on the loan. So whether it's in the plan or under your mattress, you still have not paid tax on those dollars. If you pay it back with money that you earned (from a job or investments) you will be paying it back with money that has been taxed. But if you pay it back with money that you received as a gift or inheritance, you will be paying it back with untaxed money. None of that is relevant. You are not double taxed on money you borrow from a retirement plan.

Do they report her income on a 1099 or a W-2?

What does the QDRO say it will be based on?

If the employee's last day worked was 12/31/2012, wouldn't the required beginning date be 4/1/2014?

Are they confusing eligibility requirements with allocation conditions?

Tom, I think you've got the details, as I understand them. Except that there are somewhere between 3 and 10 companies. I have no information on what type of plan or plans the other companies may have. I also have no idea what information they have about my plan -- or where they got it. That makes me suspicious of their results. ETK, are you saying that (ignoring the other companies for a moment) if I have a single plan with two different allocation rates, based on divisions, I don't have to do a 401(a)(4) test on that contribution?

We amended a plan last year to add a participating employer based on the plan sponsor's representation that it was acquiring the participating employer. It is set up as a cross tested allocation with each employer as an allocation group. We now have been told that both companies are part of a much larger controlled group that includes at least one other plan. (Apparently this was also true in 2011 and the other company's TPA did some sort of combined testing, but didn't feel the need to share it. I have no idea where they got the data.) I've never done a cross tested allocation that included only some of the companies in the a controlled group before. Do I have to include the other companies' employees in the 401(a)(4) test as zeros, or just in the coverage test?

We had a similar issue with Great-West. As I understand it, if they use a separate trust agreement that is not approved by the IRS for use with your adoption agreement, the client cannot rely on your Opinion Letter for the adoption agreement. If they use the separate trust agreement that your document provider uses, they should be fine.

I must confess that I've not heard anyone use the term non-benefits employee. What you are describing sounds like what many employers refer to as a "1099 employee", although we know that is an oxymoron.

How is "household" defined? From the above answers it sounds like unrelated people who are room mates (as opposed to unmarried couples) would be considered a household, but I'm struggling to understand how the IRS would know to connect them, or how it is fair.

It is a funny joke. It is also why I'm so glad my husband rolled his money out of the plan as soon as he was able to!

You can take an in-service distribution from the plan and roll it to a Roth IRA. If the plan allows it, you can do a conversion to Roth money type within the plan. You cannot have a Roth IRA within a plan.

If your deferral election is a percentage of pay, it is not possible to know what amount that will be until your Schedule C is calculated. If your deferral election is for a specific dollar amount, that issue is solved. If there is a possibility that you might have a loss for the year, you won't know if any deferrals can be made until that is determined. For those reasons the general rule is that a self-employed business owner has until his or her income from the business has been determined to make both employer and employee contributions.

So it does! Thanks.

When the plan document requires distribution of balances over $5,000 at the later of age 62 or NRA, and NRA is age 65 with 5 year of participation, does a participant who terminates with less than 5 years of participation ever reach NRA?

And I believe that making duplicate deposits is one of the very few situations actually spelled out as a mistake of fact by the IRS.