Bill Presson

i get this strategy, I'm just questioning the age at which it's being done.

No, ma’am. He paid tax on the conversion but he didn’t take a distribution based on the 12/31 balance. So he still has to do that. I’m a little baffled at the tax strategy of someone taking RMDs doing a Roth conversion, but that’s not my call.

I’m not where I can look up a bunch of stuff, but related to item #1, I can’t imagine anyone agreeing to benefits and wages as part of a collective bargaining agreement and not knowing exactly what that agreement said and where a copy was kept. What a stupid way to run a business.

But to get that waiver, the distribution has to be a taxable distribution. If the money is rolled to an IRA, the exemption is lost. Might need to be a lump sum distribution (as opposed to partial) but I’m not where I can look that up.

Compensation limit is based on the number in effect for when the plan year begins. 415 limit is based on the number in effect for when the plan year ends.

Jak, I'm not a CB expert, but I'm pretty sure you can still have an effective date of 1/1/2024 and a calendar year limitation year which would eliminate all the proration you're discussing.

It can be distributed in-kind to an IRA custodian. There are specialty custodians that will handle that across the US.

I think you should hire a TPA that knows what they're doing so you don't get bad advice and get in big trouble down the road.

I think they misunderstand the cure period. The end of the quarter after the missed payment is the time to have all payments caught up. Not just the missed payment. https://www.irs.gov/retirement-plans/issue-snapshot-plan-loan-cure-period

If it's discovered under audit, I think you are looking at Audit CAP and not VCP.

It’s a classic PT.

Make a profit sharing contribution that passes the a4 tests.

Why are those few months really needed? Can’t we all just wait until January 1?

I've been pretty critical of some professionals on here, but I think the "I am a Law Student" would allow for a bit of grace, perhaps? I realize we aren't here to give free advice to outsiders in divorce situations, but no need to answer if you weren't feeling it.

Also depends on what your document says about how to correct the failure. Some give specific instructions and some are silent. You should prefer the document be silent. That way you have all the options available.

I agree that it’s a better solution but I don’t like it. It’s only better because it’s outside the plan.

My primary concern is not with a divorce lawyer that doesn't understand retirement plans, but one that apparently won't even acknowledge it and bring in someone else. It's just ridiculous.

Get a different lawyer.

Pretty sure the 5500 only deals with participants and not employees. Also a 5500 usually deals with a single plan. It’s possible that plan could have more than one benefit but it may not have all benefits. And not all benefits have enough participants to require reporting on a 5500. While 5500s and 990s are technically public documents, it’s bad form to identify an employer on the board.

Someone with expertise in welfare benefits 5500s will have to jump in because I don’t have that. Sorry.

Well I’m confused because I’m not aware of many data points that would be identical on those two forms. The name, address and EIN ought to match of course. But can you list a few examples of data points that should match? Please be specific.

Amicable or not, you need legal counsel to ensure your requests are met.

Corey, it would just be 3% for the 2024 year if adopted by 12/1/24, right?

Perhaps some of our legal eagles will chime in because I am not one. You may be right and have a defensible position. I've always viewed a QNEC done to pass an ADP test as different than a QNEC used under SCP to fix a missed deferral opportunity (mdo). Perhaps there is no difference. And perhaps there is no difference in the % contribution for the mdo and the additional earnings needed to satisfy the EPCRS SCP requirements. But the second use of the QNEC and especially the earnings always seemed different to me; more like the penalty for a prohibited transaction. Now we live in a time where employers are facing fiduciary lawsuits merely for using forfeitures to reduce a normal employer contribution because that's not deemed in the best interest of the participants. Not sure I would want to defend using forfeitures for correcting an employer error much less for the cost of the time value of money.

Can’t use plan assets to pay employer penalties.