Brenda Wren

Thank you, David. The only reason the J&S rules are in the plan is because the old MPP was merged back in 2002. They did not limit it to only old MPP in the previous restatements because they just thought it would be easier! Well, it's not easier now that we are terminating! The recordkeeping has separated the money types so it's very clear who has old MPP money and who doesn't. I'm thinking that we can amend the plan to remove the J&S rules at least to the extent of non-MPP money. That may reduce and will certainly limit the problem. As I recall, we are permitted to do that without notice. Thoughts on that idea?

I don't do DB/CB work and don't normally have to deal with J & S rules. However, I have a terminating DC plan with J & S in it. If a participant is unresponsive or the spouse refuses to sign, it appears that we have no other choice other than go to the marketplace and buy an annuity for them. Is there any other option? Penchecks says they will handle funds over $7,000 for terminating plans but if the participant doesn't respond, they don't buy the annuity....they move them to an IRA and thereby ultimately are bypassing the spousal consent rules. Since the plan isn't covered by the PBGC, we can't move the funds there. Any other options?

Thanks again to responders! We decided to provide the former participant with a letter stating that as a former participant with no benefits in the plan now, she is not entitled to receive an SPD at this time. We provided a copy of the last statement she received which reflected the amount she was paid along with the check number and date of her benefit check which was rolled over to an IRA. We stated that we do not maintain historical copies of SPDs. We think she met with SSA in-person as she was never reported on Form SSA which would explain why her request was stated the way it was. We do have copies of historical plan documents but did not provide that to her.

Thanks for the comments. It appears that the letter may have been prompted by her application for SS benefits as she states "as recommended by the SSA" in her letter. I am unaware of any such comment in the SSA letters I've seen. She further states that the US DOL EBSA has requested that she obtain the SPD. This is ridiculous.

My new client received a certified letter from a former employee requesting a copy of the SPD from the years in which she was employed (not necessarily a participant), 1997-2003. Since I was not the TPA I don't have the SPD and my client doesn't think he has it either. She was paid a benefit of about $50K in 2005 and apparently is not disputing that. Is my client obligated to provide the old SPD from 23 years ago to the former participant?

Belgarath, I think you're right....I'm finding more on it....looks like it was clarified that distributions from the Roth portion do not satisfy the RMD after 12/31/23. Thanks for responding.

I understand that new rules starting in 2024 disregard Roth balances when calculating RMDs. I also understand that an RMD is not required from a 401(k) if all you have in the account is Roth money. However, I am not aware of any rule prohibiting you from taking your RMD from the Roth portion of your 401(k) if you have pre-tax and Roth funds. Two recordkeepers (so far) will not allow you to take an RMD from Roth. Am I wrong or are the recordkeepers wrong? This excerpt from the IRS FAQs seems to agree with me. Q11. How are RMDs taxed? The account owner is taxed at their income tax rate on the amount of the withdrawn RMD. However, to the extent the RMD is a return of basis or is a qualified distribution from a Roth IRA, it is tax free.

My client has a 2-person 401(k) with non-qualifying assets. The plan covers the business owner and his girlfriend. We have been filing Form 5500SF. They are not legally married but are "legally domestic partners". Not sure what that means. For years now we've been advising him to obtain the very expensive bonding needed to qualify for the audit waiver. It's time again to pay the premium again and he is questioning the need for the bonding based on his domestic partnership status. Any comments, experience or thoughts to share?

Can anyone explain why IRA custodians request the "first year of Roth" when a Roth 401(k) is rolled over to a Roth IRA? The 5-year clock starts over when Roth funds are rolled over from a 401(k) to a Roth IRA. Besides the fact that I also don't understand WHY the clock starts over, why is this data collected?

David, many thanks for this great publication. I read it every day although sometimes I only have time for the headlines. Remember you fondly from your Orlando days. Thanks a bunch! Love the comment "ERISA and an eraser"! Too funny!

You could have established a separate plan and accomplished that.

Thanks for the input, CuseFan.....no concern with that issue at all in this case.

I have a small dental practice plan. Sole owner is married with a minor child to spouse who has a sole-proprietorship business earning about $100k annually with no employees. Both spouses participate in the plan, make employee deferrals and receive a SH match. With the change in the rules for 2024, since the spouses no longer have to aggregate for testing purposes, I guess I now have a multiple-employer plan going forward. Sole-proprietorship will be desirous of funding a PSP contribution on top of the match. Other than changing the employer type on the 2024 Form 5500 and adding the MEP addendum, is there anything else required on the government reporting side or the plan document side?

Not opining, but I can tell you that Datair does exactly that. If you are processing payroll in Datair and calculating the match every pay period, it will not calculate the match if a participant's compensation has gone over the limit. Fortunately, I only have one plan like that and it has a true-up provision in it. So all is well in the end.

Thanks, Lou. Appreciate your input. When I pushed back with the auditor, she did admit that an independent appraisal was not required, but that the Trustee has an obligation to determine FMV annually. So we usually advise our clients to get comparable sales or SOMETHING to justify the value they place on the alternative assets each year. We don't need to see it, but we tell them to keep it in their records.