Bill Presson

Here are my general rules (because there are always exceptions): 1. If a 401(k) plan is going to be deferral only, I recommend against it or prefer they go somewhere else. Past experience shows that they almost never work out successfully. 2. If an employer qualifies and the limits are acceptable. a SIMPLE IRA is quite often the best choice instead of a 401(k). I know that doesn't work here because of the employer contributions, but I still often recommend it. 3. While our industry exists because of "state" supplied rules, I'm generally opposed to state run programs.

I understand it was terminated. Were all of the accounts distributed as well? That's possible but could be they are still in place. If not, I would recommend re-opening them or opening new ones. It's gotta be fixed.

The deferrals need to go to the SIMPLE. The 401(k) didn't exist when they were withheld.

I still don't understand the "why" of having one spouse have a 401(k) and the other have a SIMPLE IRA. Even if they actually aren't a controlled group (which I'm still skeptical about), it's easy enough to make them a CG and it wouldn't be a multiple employer plan. It would just be a single employer plan with a husband and wife.

This calls for professional tax advice. The Owner needs to hire someone to help solve this problem.

Happy Holidays, Jak! WCP

If it's a controlled group, then the group can't sponsor a plan other than the SIMPLE (edited to say SIMPLE instead of 401(k)). https://www.irs.gov/retirement-plans/fixing-common-plan-mistakes-simple-ira-sponsor-with-a-related-business And if it's a controlled group and the spouses are the only employees in their businesses, it would be silly to not have them covered by a single 401(k).

If it's a QDRO, you have to do whatever the QDRO says, so that might limit the choices. If you are the alternate payee, many times you can just take a complete distribution and set up your own payment schedule. But if the QDRO awarded you installment payments, that's what you'll likely have to do. Too many variables for advice here, I think.

Open an account at a US Bank. Have the direct deposit go there. Then arrange a wire transfer between your banks. This is not an ERISA or retirement plan issue.

You really need an attorney to assist you.

With it being an asset sale, the termination can be 12/31/20. It could even continue into next year. The employees are all 100% and considered terminated. So watch the coverage and discrimination tests in the contribution.

You need to contact your HR because we can only answer generally without seeing the plan documents. There are really two possibilities: 1. Your plan matches each payroll and ONLY considers that payroll in the calculation. If this is the case, there's nothing to be done. 2. Your plan matches each payroll and then does an additional calculation at the end of the year. We call this a true-up. It's not required but many plans do this. If this is the case, then you'll get your additional match under this calculation. Your HR dept can tell you which applies.

I understand your point. But that wasn't my point. If they are concerned that the plan will be top heavy, then when it is top heavy, the 3% SHNEC does satisfy the TH contribution requirement. So, my question to the OP stands: what is the concern?

It's also very likely that Lincoln shut off new money into a fixed account paying that high a return.

I just don't know if I've ever seen an ESOP actually hold the stock of two separate companies. I'm thinking EBECatty is likely correct on this.

Also, if the plan is providing a 3% SHNEC, then it satisfies the top heavy contribution requirement. So what's the concern??

It's amazing to me how many people seem to ignore this. I've seen administrators with a caseload that were paid 95% of the total billing. The owner couldn't figure out why they were losing money. While I was at the CPA firm for 12+ years, their plan was 2.5 times. And they ran it pretty narrowly.

Are you saying the same ESOP owns 80% of both companies?

Typically we'll forward an email where the documents were already provided and ask if they need any help with something.

Typically, RK is a recordkeeper.

Hate to be a pest here, but in the first post, you said the plan is safe harbor. Are there really dollars subject to the ACP? Is there a match that's not safe harbor? Hate to be pessimistic, but this is just odd to me.

The SIMPLE money can remain in the IRA accounts established. For under 2 year accounts, I'm pretty sure it's required.

No. The 415 regs (and the document) state what is supposed to happen to a 415 excess so that's pretty straightforward. I am curious how after tax money for an owner passed the ACP test. It's pretty rare.