Lou S.
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Posts posted by Lou S.
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Move the funds before the conversion to personal?Get a new investment vehicle?
- SSRRS, acm_acm and Bill Presson
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If it is your 401(k) including auto enroll and escalation, you should absolutely be able to opt out of those some how. Usually by overriding the auto amount with an affirmative 0% election.
If it is a pure employer contribution they may not accept your waiver as is it is possible that could cause the Plan to fail discrimination with no recourse for them to be able to fix it and that would affect other employees.
Have you spoken to an employment attorney who might be able to help you?That might be your best course of action.
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Potential plan disqualification.
- Jakyasar, Gina Alsdorf and acm_acm
- 3
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Yeah, I think you need to review plan accounting and how participant loans works.
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I don't follow your question. The interest repaid are earnings to the plan. The interest rate is set by the Plan's loan Program that must be in compliance with IRC §72(p).
Participant loan interest is reported on Form 5500 Schedule H line 2(B)(e), or gets lumped in the "other Income" line on Schedule I or Form 5500-SF.
If you are talking about the schedule that gets attached with the accountants opinion with the interest rates, that discloses the range of rates of loans issued by the plan which can vary over time since the interest rate is usually variable over time and often tied to the prime rate.
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I send mine by FedEx and kept the delivery receipt. It's more expensive that certified return receipt but I've never had an issue with it getting lost and always have a delivery receipt by e-mail in 1 to 2 business days with IRS signature.
I think I have done a few certified return receipt when I have the odd singular non calendar year return to file to save money but it sometimes takes up to 6 to 8 weeks to get that post card back and it often comes after the initial filing date.
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Allowed, yes. Advisable I'll leave that to others. As to where and how it is stored, it could be a Prohibited Transaction if not stored and held by a non-party in interest. Since gold bullion is not a "qualified asset" you may have higher bonding requirements and would not be able to file a Form 5500-SF.
- Luke Bailey, Bri and acm_acm
- 3
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Again, assuming this is participant directed, if the funds all came out of one TDF, and the participant does not change their investment mix for future deposits, every platform I have ever worked with the repayments would be back to the same TDF. I suppose there are situations where this might be different, but I do not think they would be common norms or industry standards.
The entire payment, both principal and interest, is re-deposited into the participant's account, unless there is some admin fee applied to the payment before deposit or the loan is treated as a pooled investment which is no longer very common.
Typically the loan accounting will take the prior outstanding balance, add interest to it from the last payment and then apply the payment to reduced the outstanding balance. Each loan system might be a little different in how they apply this but it's all going to be pretty close.
- Luke Bailey and Patrick401k
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Yes then to use an example if you have 1 HCE and 3 NHCs with the HCE and 2 NHCEs are getting 7% and one NHCE getting 3% they all are "benefiting" as they all got actual dollars.
But if you are testing on a contribution basis then anyone getting less than 7% is not benefit for 401(a)(4) and your ratio would be less than 70%.
So you can either test on a benefits basis and see if it passes (assuming you can pass all tests for this), you have fail safe language in the document which will pull in enough people at 7% to get to you to 70%, or if no fail safe an -(11)(g) amendment to pick an chose who gets the extra to get you to 70%.
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Is the PS contribution more than the 3% TH minimum?
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Contact John Hancock for a source correction. It's not that complicated and they might even be able to do it as of the deposit date so the earnings work out right. Talk to your account rep, they can probably walk you through it.
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I believe you are correct unless you want to try to go through VCP for the SIMPLE IRA since it's the SIMPLE-IRA that has problems if you also maintain a qualified retirement plan in the same year. There might be some threads here on benefits link if you do a search, I think this has come up a few times in threads.
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§401(a)(9) sends you §416 which sends you to §318 for attribution which is used for RMDs. For purposes of the RMD rules he owns the stock of his children, just like HCE determination. It is different for Controlled Groups but be happy the RMDs were properly done and you don't have to go back for missed RMDs under VCP.
- Luke Bailey, CuseFan, Bill Presson and 2 others
- 5
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It's facts and circumstances. Document why it took longer then one year so you can address it with the IRS if they bring it up on audit but what actions are they likely to take? Unwind the termination and make you re-terminate? Where it might be an issue is where you drag out the term past some new required amendment dates but typically I've never seen the IRS challenge a term if it took "a little longer than a year" but if you terminated in 2023 and pay everyone out by the end of 2024 I can't see where the IRS would ever be likely to challenge unless there were other issues with the Plan. That's not to say they couldn't be sticklers, I just think you'd have to have an auditor having a very bad day try to impose that rule which is a guideline as I understand it an not in the code. If they did do that you could always kick it up to a supervisor.
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You can withdrawal funds from your IRA and roll them back tax free if you do it within 60 days of the withdrawal, but there is a limit of 1 rollover like this per year. And I forget it if it is once per calendar year, once in any 12 month period, or if both apply. I also don't recall if this rule aggregates all of the IRAs you many have or if each one is separate if you have multiple IRAs.
I can't comment on whether or not this is a good strategy, just one that is available.
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If it is only one participant and he is over 59.5, then yes getting any kind of evidence that the first ROTH contribution was 5 or more years ago should be sufficient to process as a qualified ROTH distribution and you can breath a huge sigh of relief. And old W-2 should ROTH 401(k) or a statement such as Paul suggests should do the trick.
If you have other participants with ROTH, you have bigger issues with determining the ROTH basis and first year of ROTH contribution for all similarly situated participants
I'd suggest a retainer billed in advance if you have to do a massive project to reconstruct that because the prior TPA/Custodian/record keeper, either didn't track it or didn't transmit it and the Plan Sponsor who is also probably the Plan Administrator seems negligent in it's duties with respect to service provides some how.
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Request copies of his W-2 from 5 and 6 years ago?
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I don't believe it is impermissible under the Internal Revenue Code, at least I've never found anything that says you can't, but it might be prohibited by the Plan's Trust documents, Investment Policy and/or the Plan Trustee who oversees the investments.
If it is allowed by the Plan document and the Trustee will allow it, they you do have all the pitfalls you mentioned and possibly several more which can be quite easy to run a foul of and while I'm not an accountant I think you might lose some of the advantages allowed in the code, like depreciation of the asset which oddly I think applies to race horses for tax purposes.
It is not something I'd be interesting in touching, even if it was technically allowed, but you might find someone out there who would, though it might come with additional record keeping fees.
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If he's already contributed $55,000 to the DC plan for 2023, you are going to have problems deducting a $140,000 contribution to a DB plan unless there are employees that would make this a PBGC plan due to the combined plan deduction limit. If he hasn't made any 2023 contribution and is on extension, limit the DC contribution (not including 401(k), if any) to 6% of pensionable pay.
If you are setting up for 2024, talk to the plan actuary before making any contributions to either plan to make sure you don't get into nondeductible contribution issues.
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Oh that's different. I don't recall if hardship is a protected benefit, you may or may not be able to amend that out, but if the Plan has in service at 59 1/2 and/or severance of employment already you'll need to preserve that for all current participants at least for funds currently in the plan and any earnings thereon or you'll have a prohibited 411 cutback. Accounting for pre and post amendment balances by source for all participants seems a nightmare and just asking for trouble. Oh and then telling folks that some of their is available when they terminate and the rest when they turn 65? That sounds like a fun conversation.
- acm_acm and Peter Gulia
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Make sure the owners know that the no pre-65 distribution rule also applies to them as well as any "executives" then might hire.
- Bill Presson, Bri and Peter Gulia
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A plan can allow for no distribution prior to normal retirement age. Though I believe that's much more common in a DB plan with annuity only options. I don't see why you couldn't do it in a safe harbor 401(k) Plan, but I'm not sure you should do it.
- acm_acm, Luke Bailey and Peter Gulia
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39 minutes ago, CuseFan said:
Consider using to pay final plan expenses to use up and not have to deal with allocating the excess which might push you into a 2025 filing if those have to be determined after a PPTD of 12/31/2024.
The surplus isn't that small. We'll know YTD payroll in a couple weeks and and can compare Plan assets to hypothetical balances and can do a Plan amendment to eat up most if not all of the surplus in a nondiscriminatory 2024 pay credit. The pay credits were frozen as 12/31/23 with this potential in mind. But judging by the responses so far I think we'll make a push to get the participants paid out in Q3 and then terminate the Plan.
One of a Kind Situation and Need Advice!
in 401(k) Plans
Posted
Perhaps you could request an attorney recommendation from the body that has sanctioned you.