jmrsai

I have a not-for-profit corporation sponsoring a PSP. The "president" will turn 70 1/2 on 10/3/2015. He's planning on working well into his 70's and since he's not a 5% owner, he doesn't have to take RMD's from the plan. Can he roll assets from his IRA into the PSP and avoid having to take the RMD from the IRA too? Or, would he be required to take the RMD from the IRA for calendar year 2015 but avoid it going forward once the assets are part of the PSP?

Thank you all for reinforcing my thoughts.... and giving me a couple that I hadn't thought of too! I think I'm going to recommend he terminate the plan and roll his funds to an IRA. That way if he's hell bent on doing this, he can use the IRA funds and I won't care. He hasn't put money into the plan in a few years anyway. He's 54 and during our conversation about this told me that he doesn't want to work anymore... wants to find a way to make money where he doesn't have to be a doc anymore. Another circumstance that makes physicians the butt of the other half of the viable jokes among ERISA practitioners, QDROphile! lol Thanks again. I've got a good list now to convince him he doesn't want to do this.

PS prototype plan, Dr. & 4 participants, $715k total pooled assets, Dr's portion is $700k. No contributions in a few years. Dr. wants to use $600k of plan assets plus some personal assets to form an LLC with a partner and then the LLC will buy a local strip mall. Partner's funds for LLC will come from his IRA. Dr. and partner are looking for income from the mall, of course. Okay to do? Good idea/bad idea? Small plan audit issues? Thanks for any and all comments/suggestions.

A participant requested her distribution be split 50/50 between a rollover to her new 401k and a cash payment to her. Through nothing but sheer "OOPS" by the TPA when requesting the distribution, a check for 100% of her balance was issued payable to her new 401k plan but mailed to her home address so that she could submit it with her investment election form for the new plan. She took the check to the bank and they cashed it. The payor of the funds (Nationwide) will be issuing a corrected 1099-R showing a code of "1" and no tax withheld and the participant will be claiming the entire distribution on her income tax return. But, what is the penalty for not withholding? Who is responsible for paying it? (enough blame to go around on this one... TPA,participant, bank that cashed the check). How does it get paid? Is there a form that must be filed?

What happens when an ADP test fails based upon incorrect census data and when the correct census data is used, the plan passes ADP testing? What options are available to the HCE that already received a refund?