SusanKD

If a participant leaves employment at age 50, the vested account balance is greater than $5,000 and the vesting is 80% , after a 5 year break in service, the non-vested balance is forfeited. The forfeited balance wouldn't be returned to the account when age 65 is reached. So how can a terminated participant who left employment and isn't fully vested prior to age 65, receive full vesting?

A participant died in 2016 without a beneficiary designation on file. As a result, her son is the beneficiary on her $4,600 account. He doesn't want the money. Even if I had his SSN and address, he probably wouldn't cash the check. Also an RMD will be required for 2020. The plan sponsor hasn't been much help, but I did learn that she has a brother. What options are available to distribute the funds?

A participant in a 401(k) plan with automatic enrollment e-mailed her initial enrollment on 12/18/17 to her payroll department. She requested 3% deferral. The payroll administrator missed the e-mail and auto enrolled the participant at 6%. Payroll was processed on 1/2/18. So the participant's deferral was 3% more than requested. The plan does not allow for distributions when opting out of automatic enrollment. She also received a higher match as a result of the error. I know what to do if the deferral was missed, but in this case the deferral is too much. My thoughts are to keep the deferral as processed and make sure payroll is updated. Thanks for any guidance!

An auditor recently informed me that the fees paid when a participant takes a distribution/rollover should be reported on the Schedule H as a benefit payment and not as a fee. So if the distribution fee is $100 and the participant rollovers $10,000, line 2(e)(1) would have $10,100. Any thoughts on this?

An HCE who was still employed died in 2012. His total plan assets are $2,000,000. He had a life insurance policy as part of his plan assets. He was also receiving RMD. Now in 2013 his spouse wants to rollover his death benefit. The total life insurance proceeds were $400,000. The cash surrender value was $225,000. So the non-taxable portion of the life insurance is $175,000. The spouse also has to receive a RMD for 2013 for $113,000. I know the 1099r code on the on the rollover will be 4G. Since she's receiving $175,000 as a non-taxable distribution does she also need to receive the RMD as a separate taxable distribution? If not, would she receive 2 1099r forms? One for the RMD code 7 and one for the balance of the non-taxable life insurance code 4?

A large plan 5500 filing and audit were complete for a plan for the past 2 years (2008 & 2009). The participant account at the beginning of 2010 is less than 100 employees. Can the small plan filing be completed for 2010 with the sponsor's approval? My personal opinion is that a large plan filing should be completed. Any thoughts? Thanks!

I recently requested an corrective distribution for a 2009 failed ADP Test. The recordkeeper indicated that no tax will be withheld, even if the participant requested it, on any corrective distributions made prior to 3/15/10. Is this correct since the distribution is taxable in the year distributed? It makes no sense.