My 2 cents

Does not affect the April 15 due date for DB quarterly contributions, if applicable, although there has been a heated debate about this, on one of the Message Boards. The IRS has made clear that the DB bcontribution deadlines (and that includes the 8 1/2 month deadline) are not pushed back to the first business day after the regularly scheduled contribution deadline.

Perhaps it could have something to do with the terminating plan having to satisfy the PPA requirements on more than just a good faith interim amendment basis. When does that come into play?

Agreed - based on my understanding, if a participant is taking a $10,000 lump sum and the disbursements are $8,000 to the participant and $2,000 to the IRS, report $10,000 on the benefit payments line even if the financial institution shows the two items separately. There is no other way that I know of to report the disbursement of the amounts withheld. Ditto for any state or local taxes withheld from the amount payable to the participant.

Last time I looked, it was contract value. Don't know if the rules have changed since then.

Valuations under PPA consist of two steps: 1. Calculate a benefits cash flow. If the plan has a lump sum based on basis A or 417(e) (whichever is greater), then to the extent that lump sums are expected, do the calculations of the future expected lump sum amounts using basis A as is or 417(e) with the funding segment rates used as though they were the segment rates to be used under 417(e). All applicable mortality effects would be reflected here. 2. Discount the benefits cash flow using the funding segment rates. This is based solely on discount rates, no mortality built into this step. For 417(e) only plans, the discounted value of the projected lump sums would, but for switching to unisex mortality to calculate the lump sums expected, come out exactly the same as discounting the normal form annuities. You would not build the cash flow in a way that would reflect the mortality basis for the lump sums for periods between the valuation date and the date(s) on which the lump sums are expected to be paid. The probability of surviving to those dates is based on the funding mortality rates.

What does the plan say? Some are explicit and others not so much. The plan language may justify starting the payments as of the beginning of the plan year after the 415 limit would have been reached. In general, it is permissible to defer commencement beyond NRA if the person is still working and the plan says to do so. It depends on how the plan handles things (i.e., actuarial increases or suspension notices) Failure to start payments if the 415 limit would step in could be treated as an impermissible forfeiture after NRA, especially if the plan does not contain suspension language.

Oh, please, if you know, please pass along the information. Many of us are not country music aficionados.

The question does not appear to match the layout of Form 5500 Schedule C. Schedule C of what form? 1040? Something else? Is this an individual tax question or a 401(k) filing question?

This is what DOL told me as well, for the 2015 filing. I may try "kicking it upstairs" when I call back again. When you call back again, take the position that any changes made to EFAST that prevent recognition of changed plan names were made in error and should be undone. The DOL cannot legitimately assert that you need to treat the plan after the name change as a separate plan for filing purposes with a new plan number. Respectfully insist that they facilitate changing the name on EFAST as before.

I do not agree that one should measure whether the benefit is payable as of a date later than the effective date of the DRO. When the divorce took place, the participant was alive, and the DRO can certainly provide that the ex-spouse is to be treated, for purposes of the plan, as though still the participant's spouse. Logically, it is not possible to reconcile the sequence of events with the on-point example in the regulations by saying that because the participant died before the DRO was corrected and deemed qualified by the plan administrator, nobody gets anything. The example in the regulations makes it crystal clear that such an interpretation is not acceptable.

If not explicitly of the kind of expense exempted from Schedule C reporting, what could go wrong if the fees were reported on Schedule C?

Have they found a new CPA yet?

Plan records may be the plan's "property", but surely possession of "property" of that sort does not require bonding??

Has the number of participants as of the start of a plan year ever been below 100? There may be a good reason why they filed a Schedule H in 2014. Maybe they have never qualified for a small plan filing. The 80-120 rule allows you to continue filing the same form as last year, not to change to small plan if between 100 and 120. I don't know if it would be acceptable to refile last year as a small plan if they qualified last year as a small plan, but it certainly would not be if they did not.

Seems that it ought to work that way. No discretion or control should mean not a fiduciary, and no direct handling of plan assets should mean no bonding needed. Have you encountered contrary opinions?

Did not pick up from the original post that they filed as a large plan last year. I understand the instructions to key off of the number of participants as of the beginning of the plan year. They filed a full 5500 last year (presumably with an auditor's report) for 2014. Is it safe to assume that, notwithstanding the fact that they had only 98 participants at the end of 2014, they had over 100 at the beginning? As for inheriting the plan from someone who told the sponsor they would not need an audit for 2015, I am reminded of a presumably apocryphal story from the old Soviet Union: When Krushchev became premier after the death of Stalin, an official gave him two sealed letters from Stalin with the instruction that when the first crisis occurred, he was to open the first letter, and upon the second crisis, he was to open the second letter. After a period of time, a crisis occurred, and he opened the first letter from Stalin. It said only "Blame me". So he blamed Stalin and the crisis passed. Later, when the second crisis occurred, he opened the second letter, which said, in full, "Write two letters."

Not if an amended return, not taking the deduction, had already been filed. Interest and penalties, not so sure.

While I do not work on 401(k) plans, wouldn't they fall under the rule that permits continued use of the SF when the count bumps over 100 (but not 120)?

I don't work on 401(k) plans, but if the employee was eligible to start deferrals in 2014, shouldn't the employer have insisted on either a written election to defer or a written election to not defer? Or at least have something in writing to show that the opportunity was presented to the employee on a timely basis to commence deferrals (presumably containing a statement that no deferrals will take place until the election has been made). If you can show that the employee was given the opportunity to defer, then the burden should fall on the employee to show that he or she had taken the steps necessary to start deferrals. Doesn't sound as though the tightest administrative procedures are being followed here.

It's a defined benefit plan. Are you sure you have excess assets? Even if it is a cash balance plan, it is easy to imagine the cost of paying the plan's benefits out being much more than the account balances. If it is not a cash balance plan, that is even more clearly true. Remember - every participant in a terminating defined benefit plan (except a participant with a benefit worth under $5,000) has absolute authority to demand that an annuity be purchased from an insurance company (and it's of no concern to the participant how much more than the lump sum it will cost). The 417(e) value has little to do with the cost of the annuity. The sponsor has no control over the choices to be made by the plan participants and dare not take any actions intended to discourage the election of an annuity. If the participant and the participant's spouse do not both want a lump sum, it's off to the annuity marketplace you go, where you will have to pay whatever rates the insurance companies want to charge (with expense and risk margins etc.).

Suggest that the broker check to see what the plan says.

It is (or should be) impossible that EFAST cannot handle changes in the names of plans. Utterly ridiculous and everyone reading this thread knows it. If there is no satisfaction to be had, go up the chain as high as necessary. Having an error flag for a change in the plan name is, plain and simple, a bug. At most it should be a warning.

Why isn't there a specific emoji for "egg on my face"?

If the person needs a hardship withdrawal to move to an apartment and pay rent, and not wanting to sound heartless here, how can they afford to move to the apartment? Things like rent have to be supported by pay, not savings (unless the person has enough savings to live on). Purchase of a primary residence or prevention of eviction or foreclosure are, presumably, non-recurring and of a greater magnitude than normal month-to-month living expenses. Practically speaking, unless the account balance is significant enough, it will not serve to permit the participant to afford more than can be earned currently. Or is the withdrawal needed to cover the security deposit, the final month's rent, or some other extraordinary cash need other than the recurring rent?

A Domestic Relations Order only becomes a Qualified Domestic Relations Order when the plan administrator says it is (and they do have a duty to approve it or say why not, and the reasons must be legitimate in light of the statutory rules concerning QDROs).