Lou S.

Yeah the key is job classification. And I agree you could do it to all cashiers or you could grandfather the old ones in and have it apply only to new ones.

Eligibility is not a protected benefit. So if they wanted to amend the Plan to exclude all cashiers going forward past/present/future you can do that. It doesn't change the distribution rules for for the employee. They are still subject to the plan terms, they continue to accrue vesting service, they just don't get future contributions. Two caveats, 1st you can't cut back a benefit they have already earned a right to, so if you are trying to exclude a current cashier who has already satisfied the allocation condition for 2025, you couldn't make it effective for them until 2026. 2nd those folks still go into your nondiscrimination tests, they are just no considered "not benefiting" so if you exclude too many NHCEs you can run into testing problems.

No RMD is required because they died before their RBD. Found a 10 year old thread hear that clarified it. Some of the rules have changed slightly in the 10 years since the there have been a few changes to the RMD rules, but dying before RBD still puts you in Non-RMD status. For full details see §1.401(a)(9)-3 Q&A 1 through 6.

I'd double check the rules on "death before RBD section of the regs" since the first RMD year year is 2024 but the RBD is not until 4/1/2025. But I think if they die before the RBD it does stop the RMD. I'm just not 100% certain on that.

Paul, thanks you summary is excellent and pretty much matches what I thought already. Peter, thanks so much for the IRS memo, that's exactly what I was looking for! On a different somewhat related note, does anyone have a good missing participant search company that they like? If you don't want to post in the thread feel free to shoot e a PM. Especially one that will do a detailed death search in case the participant has passed? The one we used came up with an address the participant is known to not have been at for some time.

If he has not reach RMD age at time of death and the spouse is the beneficiary I don't see why she couldn't elect a rollover to her own IRA unless there was something in the Plan restricting that.

I don't think the IRS would question it if you had proof it was initiated by the deadline. Since as you say they will take a timely mailed check I don't see why they would not also take a timely submitted electronic transfer.

Client has a participant that has 1st RMD coming up. Assume the 401K balance is more than $10K and less than $100K. This participant has been missing for some time. They have scoured their own records and a commercial participant locator service produced an older address that the participant has not been at for some time. What to do with the RMD and what to do with balance that is more than cash out limit in on going plan?

I would assume the correct way to fix is through EPCRS. More than 5 years ago would reduce the audit risk as that's a now a closed year but I'm not sure that changes the answer if you want to fix it properly. Has this been an ongoing problem or a one time more than 5 years ago problem that was just discovered for some reason.

Why would the W-2 be affected? He should get a 1099-R from the Plan for the refund. Any reasonable method to determine earnings can be used. I believe we assume deferrals ratebly over the year and apply the annual earnings rate for 1/2 the year if that makes sense.

We are no longer a service provider to the plan and unable to assist you with the information you are requesting as we have no access to that data and no contractual agreement with that Plan or Sponsor. Please contact the ERISA Plan Administrator and/or Plan Trustee. Our last records which we have previously provided to you indicate they are X and Y. The last known address and phone in our records is _______ and _________. We wish you luck in enforcing the right of the participants with the legally responsible parties but are unable to offer any further assistance. Just repeat that ever time they call.

I would put the date of the transfer as final day. I mean often times we terminate a plan as of X date but the last distribution day is X + Y and we we report the date of the last distribution that closed the trust as the last day for 5500. I see this as an analogous situation.

IDK, amending isn't that hard and you have piece of mind. I guess if you have an acknowledgement file that says it was accepted you can make a call whether or not to amend and supply them with the attachment should it come up later but do you want to risk the IRS saying you made an incomplete filing? I mean I doubt they would for something relatively small like that but I'm not the IRS and can't speak to how that would view it.

I don't think I'd change a thing on the filing with exception of checking the amended box and adding the correct attachment.

Any time not sure, the best course is to refer to them to legal counsel.

Hardships have a 10% default federal withholding but you can opt out and elect a lower percentage, even 0%, or can elected a higher percentage if you want. But Hardships are not eligible for rollover and therefore not subject to the mandatory 20% federal withholding.

If you are in black out, they may not have loaded your loan on to the new providers platform yet. Check the day after you come out of blackout. If doesn't show up, talk to the person in your company who handles the 401(k) and tell them they need to straighten this out or you'll contact the DOL.

The only thing I might caution is since there is only one NHCE and they are not deferring I think I would caution the client to keep good records that the safe harbor notice was in fact distributed and would encourage them to have an "opt out or 0% election" signed by that NHCE just in case the IRS might question it.

Yes you can, meets the ACP exemption.

I believe it causes disqualification problems for the SIMPLE-IRA contributions in the years in which both Plans are maintained. The employer is not allowed to operate another Retirement Plan and I believe that includes 403(b) Plans. Though neither SIMPLE-IRA or 403(b) is the area I focus on so I could be wrong. But my understanding is the same as yours.

While technically correct, I think it is misleading to folks who sign up thinking they are going to get 80% of the first 6% which is a 4.8% match when they are getting capped at 4% which effectively is 80% of the first 5% and 0% from 5 to 6. It just seem like catching folks in the small print. It guess it comes down to how you communicate it to participants.

I think you can do it with the 4% cap. But you are not really matching 80% of the first 6% in that case. I don't see why you don't just communicate the match as 80% of the first 5% because that's what you are actually doing in this case and you would be withing the rules.

Is 80% of the first 6% a fixed match in the Plan document? If yes, you are fine. If it is a discretionary match where they are declaring 80% of the first 6% then I think you have an ACP test as the discretionary match can exceed 4% of pay.

I think if you want to do this with IRS blessing since it well past the 2 year self correction mark, you would be looking at VCP with the suggested correction be that the plan disgorge the funds back to a ROTH IRA since it was not supposed to accept rollover funds from a ROTH IRA in the first place. Assuming the participant can provide the documentation that the funds did actually come from a ROTH IRA originally. What documentation did the Plan get in 2018 to suggest that it was from a traditional IRA and an allowable rollover in?

Why can't they unwind this? They erroneously made deposits. That said I don't see where the IRS would have an issue with the proposed correction.