Lou S.

If deferrals started with payroll but couldn't be deposited because of the custodian, you have late deposits. Simply deposit the payments along with the lost earnings, file the 5330 and decide if you are going to though the DOL late contribution program or not. If the deferrals didn't start you can calculate a QNEC on the missed deferral opportunity and deposit that, but I think you might just be able to self correct and start the deferrals 3/22 as the delay was "short" and folks have 9 months to catch-up the missed deferral opportunity.

No 10% penalty if taken from the plan if on account of separation after age 55. 1099-R code would be 2. Plan's NRA doesn't matter in this case, just the age at which he separates service.

Ignoring the public relations issue with the employees for the employer changing their mind after notifying the employees they would be getting a PS contribution, unless it's required by the plan document then it's not required to be made. They could give a supplemental notice something like - we regret to inform you but the prior notice of a 2023 contribution was distributed in error, there will be no PS contribution for 2023 - something like that. That said I am not a lawyer and I don't know if the initial notice created a de facto contract obligating the employer to the PS contribution when they notified employees. Were corporate minutes filed approving the contribution? Have they filed a tax return claiming the contribution?

You can have two 401(k) plans that each exclude the other but why would would you want the head ache? I'm not sure if this allows you to file 2 EZs or if you have to file 2 SFs (assuming they don't need a long form because they have some weird assets which would not surprise me given t he facts you have presented) but you can probably file 2 EZs.

I'm not sure I even understand what the question is here is or it's application to QDROs but wouldn't this be a question for an attorney who practices in the state in question and has some knowledge of ERISA if a QDRO might be applicable?

My understanding is if there is another taxable distribution where the participant is receiving funds then you withhold on the total including the loan offset. If there is no cash distribution, like the participant is rolling over the rest to an IRA, then you don't withhold. This understanding is for Federal Tax withholding but I believe most states that have withholding on qualified plan withdrawals mirror the Federal rules though I don't know about MI specifically.

Presumably what you want to do is restate the Plan from the Vanguard document to the E-trade document retaining the same Plan number 001 and simply transfer the assets from one brokerage to the other, unless you already have a plan document that isn't brokerage house specific in which case you just need to transfer the assets.

Yes 401(k) that offer annuities have always been subject to those rules. At one time you could not amend it out as the IRS viewed it as a 411 cutback, but now you can as some law changed it if you meet certain notice and timing requirements. I think the change was in the late 90s or early 00s but I forget which piece of legislation allowed you to remove the QJSA/QPSA from non-pension plans.

Under the code yes, but what does the document say about compensation?

It would be up to the Plan Administrator but if they had sufficient evidence and believe that this is his primary residence (where his W-2 issued, his drivers licenses, a power company bill in his name, etc.) , I don't see why it would not be approved.

I'd vote with you. No 5330, reflect the earnings in 2024 when received.

I think it depends on your amendment. Are you only correcting for the year of failure and bringing people in for just that year? If so I think you could do a QNEC of 3% plus the missed deferral opportunity which I believe would be the average ADP of the NHCEs for the year in question. If you are bringing them in as full participants because you expect ongoing failures, then yes you would have to give them the ability to deferral as well.

Corrective -11(g) amendment to include commissions for NHCEs with a true up match calculation? That seems to be one way to handle it, there are probably others.

The QACA employer safe harbor contributions have to vest over no more than 2 years, but it can be 2 year cliff if I recall correctly. as Belgarath points out other employer contributions such as a profit sharing contribution could use a different schedule such as 2/20 if provide in the document. God bless the job security of piece meal retirement legislation that brings us multiple different vesting rules for different types of plans and sources or money.

I don't work on them. But since they are a type of DB Plan I would assume they would have to satisfy the RMD rules just like any other DB plan would. One way, presumably would be to start annuity payments under the normal form or optional form with spousal consent.

I think you can but if you sent them checks with a 1099-R associated with it, later rolling the uncashed checks to an IRA could be problematic from a reporting standpoint, especially if there was withholding on the original check. I also assume this is their whole balance and not a series of periodic payments you are talking about. But I see no problem with cashing out small balances in a DB plan if you are following the terms of the plan document.

If you are using the PBGC missing person program that is all or none as I understand it, you can't pick an chose which participants you cash out and which you send to the PBGC if that is the question you are asking. If you are buying annuities for everyone and not using the PBGC program, I'm pretty sure you can force out the under $5K (now $7K under secure 2.0?) to IRAs.

If they were all NHCEs you can probably self correct by retroactive amendment to conform the document to the actual match contributed for the Plan year if they all got more than the match formula even if it's not uniform since with will clearly be non discriminatory if the extra natch only when to NHCEs.

I believe you are required to File Form 10 to notify the PBGC within 30 days unless an exception applies. Filing a distress termination with the PBGC may qualify as notice, I haven't looked. But one way or another, you are going to have to involve the PBGC to terminate the Plan.

If the participant dies before and election of payment, see the Plan document for payment to the beneficiary. If the beneficiary dies before the election of payment to the participant, the Participant's contingent beneficiary would be entitled to the death benefit. Assuming the participant and beneficiary are going to waive the annuity benefit and roll to IRA than assets in excess of the 415 limit will revert to the Plan Sponsor and be subject to any excise tax on reversion. If you are looking for ways to reduce the excess tax and the participant and/or beneficiary are in good health they could consider purchasing and annuity which might eat up some or all of the excess but that won't leave assets for other heirs if that's a consideration. Or they could look into merging with a company with an underfunded DB Plan and negotiate the excess assets as part of the transaction, not my area of expertise but I do know it can be done and there are some companies who specialize in that field.

I believe that is called fraud if someone else signed on behalf of the wife prior to the divorce. As to the rights of the wife following the divorce, that should be address by the Qualified Domestic Relations Order (QDRO) that should be prepared and agreed to durring the divorce proceedings.

A good CPA or maybe even a tax attorney would be a wise move. She could probably take legal action against her son but I'm guessing the odds of recovery on that front are quite small.

But that's my point. if it was deposited to the ROTH source initially how will the Plan ever know it's not supposed to be in the ROTH sources and is not eligible as qualified ROTH distribution if there is no excess in their Plan? Plan A only had $15K and Plan B only had $15K. To each of them, it looks good. So which Plan has to recharcterize the ROTH excess over the 402(g) limit when neither exceeded it? If it was Pre-tax, you wouldn't need to worry because it would be taxed again when it is ultimately distributed and no special record keeping or tracking needs to be done. But if it's in the ROTH source, when it comes out if the participant is 59.5 and 5 years, I can guarantee you that 99.9% of plans will code that as a qualified ROTH withdrawal on the 1099-R when it comes out of the Plan unless it gets moved to a different source in the Plan. And according to the guidance above, that's not correct.

RMD first, then rollover. Must have typed too fast.

If the participant is RMD age, I have always processed the RMD first in terminating plans then the rollover. Edited to fix error.