My 2 cents

I am a DB person, and it seems to me that something like that must be satisfactory (especially if the participant's whereabouts are known and they just haven't gotten the check deposited or cashed). The plan paid the benefit out and should assert so on the Form 501. But I am a bit confused by the initial post. Does it say that the check was sent to the financial institution designated by the participant for a direct rollover? If so, how could the check possibly not have been cashed? If the election was for a direct rollover, the participant couldn't possibly have cashed the check. Did the participant request a rollover, specify the financial institution and direct that the check (made out to the institution) be mailed to him or her?

Would it be fair to say that accounting firms seeking make-work revenue by providing auditor's reports for 401(k) plans with well under 100 actual contributors don't have any kind of legitimate objection to this otherwise entirely beneficial change?

Can condition accrual of a full year of benefit accrual service on more than 1,000 hours in a year, but not vesting service.

If operating under a POA, how about "I will have to get back to you on that after I have discussed it with my principal."? Nobody ever said that having a POA meant that you had to go solo, or that having a POA meant that you had to answer for any or all of your principal's transgressions, real or imaginary.

Noting that the IRS has had difficulty promptly adjusting their records to recognize that a Form 5558 has been filed, there should be no problem to solve. Timely filing a Form 5558 to extend the filing deadline for the 5500 and the 8955-SSA is all it takes. IRS approval is not required. If the Form 5558 is completed properly and submitted on time, the IRS has ceded all authority to reject such a filing. I'm guessing you haven't had the IRS send a letter to some of your clients claiming a Form 5500 was filed late and a penalty will apply because the IRS did not process the 5558 timely. We had one client receive two of those letters in a four year period. After getting a power of attorney signed and wasting time on hold, the matter was quickly resolved once I was able to speak to a live person at the IRS. I don't enjoy extra non-billable work and having clients think we missed a deadline that we did not miss just because the IRS waited until November to process some extensions filed in July after they sent out late filing notices in October. As I said, there SHOULD not be a problem with this. That doesn't mean there isn't. If it migrated to EFAST2, who would be able to file a whole batch of 5558s at one time (as in one 5558 for every single ERISA client)? Would plan officials authorized to sign off on the 5500 filing have to get involved? And (as much as I hate to suggest this) what guarantees are there that submitting a 5558 through EFAST2 would keep the IRS from failing to notice that it had been submitted? How often does the IRS assert that timely filed 1040s were late? Why do they do so with the 5558s, which (one presumes) come to them in much smaller quantities?

May be wrong, but I thought that, in general, operational compliance would not be considered in a determination letter filing, which focuses on the plan document.

Noting that the IRS has had difficulty promptly adjusting their records to recognize that a Form 5558 has been filed, there should be no problem to solve. Timely filing a Form 5558 to extend the filing deadline for the 5500 and the 8955-SSA is all it takes. IRS approval is not required. If the Form 5558 is completed properly and submitted on time, the IRS has ceded all authority to reject such a filing. One problem with electronic filing is that an EFAST account would be necessary. At present, anyone can submit a Form 5558 to obtain the extension. No signatures, no permissions are needed to get the 5500 and 8955-SSA extended. It is probably not uncommon for TPAs to submit 5558s for all clients en masse, without having to discuss the issue on a client by client basis.

Is there a way for a plan sponsor to take the 5th and refuse to answer any of the compliance-related questions? Just wondering.

Under what fiduciary process did they decide to invest plan assets in a mountain? Ick. Is this some random mountain with no significant economic potential or is it a mountain with an established hiking or skiing business? So I can sleep better, someone please tell me that the mountain was not purchased to further the economic interests of a party in interest!

In my mind, there is no difference (other than the current tax treatment) between a lump sum and a direct rollover. Consent for one should be considered automatically acceptable as consent for the other. I don't even see a need to mention both in the context of a spousal waiver of the QJSA. The spouse waives the QJSA, consenting to payment of the entire benefit in a single sum. The participant elects whether to roll the money over or take it (net of mandatory withholding) as cash. Is there any more to it than that?

Is it not the case that a Rabbi Trust is funded with contributions for the sole benefit of the employee in question, which cannot ever be taken away from them due to change in ownership or falling out of favor, etc., but which (in the event of sponsor insolvency) IS subject to the claims of creditors? The key thing is that subjecting these otherwise absolutely earmarked and vested funds to the claims of the sponsor's creditors is a sufficient risk of forfeiture to make them not currently taxable in any way (not sure about FICA, though) to the intended beneficiary. Certainly no income taxes until actually paid to the person. Not so?

I thought that the whole thing that made the magic of a Rabbi Trust work was that, by subjecting the trust assets to the claims of the sponsor's creditors, it was all treated as having a substantial risk of forfeiture, so mere vesting did not create any tax liability for the person covered. Is this not so?

My main concern in reading David's post and then this one is that they might not make it obvious enough for a non-expert to recognize the heavy dose of sarcasm. In case there is any doubt, those items described as not involving any risk are, in fact, definitely possible sources of risk arising from the proposed strategy. What do they say about lending money to a friend or family? As one quote points out, "Thanksgiving Dinner tastes better when nobody at the table owes money to another person at the table."

I am not a lawyer, but I have seen the following sentence appear in some plan documents in the section concerning plan amendments: "However, any amendment which affects the rights, duties or responsibilities of the Trustee (or Insurer) or Administrator may only be made with the Trustee's (or Insurer's) or Administrator's written consent."

Maybe what they meant was that they sent the amendment along, to be properly signed. Amendments affecting the trustees must be ratified by the trustees. But don't most plans already contain provisions dealing with replacing trustees, making a separate amendment unnecessary? When it happens in the real world, it tends to not go so well for Sally! If Jane says A and Sally says B, when do the "B"s" prevail?

Sally may want to think long and hard about remaining a trustee under these circumstances. Or at least think hard about it (if not long). If she and Jane are the trustees, with Sally reporting to Jane, that is not a very healthy place to be. Would Sally, in her capacity as trustee, be able to go toe to toe with Jane about a proposed action with which she disagrees? Is there confidence that Jane will exercise her duties as trustee in a diligent and prudent manner? Sally could become subject to personal liability for fiduciary violations committed by Jane. Not to mention that you do not make it sound as though reporting to Jane (even as an employee) will be a walk in the park!

I don't work on 401(k)s, but I think the limit is only applied when the loan is taken.

If there is a default on the repayments, the balance is treated as a distribution (with the associated taxes having to be paid from whatever other assets the participant may have). No need for "collateral" on a 401(k) loan. The limit of 50% is not to leave enough money behind to match the loan. It is just there to serve as a limit to how much can be borrowed. The account is supposed to be for retirement security purposes.

Two considerations in deciding: 1. What does the plan say? 2. Is it a good idea?

Vacation pay is ordinary income, subject to OASDI taxation, etc. How could it possibly be treated as a fringe benefit for tax and pension purposes?

If a defined benefit plan terminates and distributes the assets near the end of the plan year and one of the checks is not presented for payment until the year after the assets were distributed, does that undermine filing the 5500 for the year in which all the distributions were issued as the final 5500, reducing the assets and participants to 0? If the participant claims to have lost the check and the prior check is stopped and a new one (same amount) issued? Doesn't sending the check out constitute payment, with any subsequent actions being mere paperwork?

1. What does this have to do with the Form 5500 filing? 2. If you are talking about a defined benefit plan, I don't think that either the participant or the alternate payee can be required to pay for the expense of administering the QDRO.

I suppose that if the employer went out of its way to hire people of that faith, while it might violate other laws, they would be fine with respect to the pension laws!

Maybe I am just a suspicious sort of person, but can it be conclusively proven that the participants who waived participation did so entirely of their own free will, with no pressure whatsoever exerted by the owners to do so? Sure seems odd that all of the non-owners went out of their way to stay out of the 401(k) plan. Why would they want to do that? Of course, the smallest amount of "suggestion" from their employer that they do this is a huge, extreme violation of the employees' ERISA rights, deserving of the harshest possible penalties to the owners.

RMDs are taxable and subject to withholding. In the absence of direction from the recipient, how would you determine the withholding?