Scuba 401

Recently the IRS has flagged one of our plans for this issue on audit. they want to take it into CAP and claim its a qualification issue. the only issue i see is that participants would need to be vested. if there is only one participant what is the real legal issue that could force the plan into CAP. seems a little harsh. anyone have any experience with this issue? edit: noticed some earlier threads where they quote the IRS manual saying other than vesting there is no practical consequence though that section seems to have disappeared from the manual.

if terminating due to acquisition/plan termination do you need to provide 30 days notice? i don't think so but wanted to confirm.

Regs say 1,000 limit is ok but what about 5,000 limit. plan has few if any HCE's. does this fail the rights benefits features test or the reasonably equivalent basis test?

i have some employees basically leaving and forming a new entity. we want to start a new plan and do a trustee to trustee transfer of their entire accounts to the new plan (as opposed to distributions/rollovers). would this be considered a spin-off and be allowed? we do not have an asset sale.

so A's sole shareholder got stock in B. sorry about that. my concern is that in a stock sale the participant isn't considered to have a severance of employment and hence can't get a distribution. but in this case my document looks like they have a termination. can they take a full distribution in light of the document?

jpod is correct. it was a stock swap. A got stock in B in exchange for A's stock.

The Plan will terminate upon the first to occur of the following: (1) Specified date. The Effective Date of termination specified by proper Employer action; or (2) Employer no longer exists. The Effective Date of dissolution or merger of the Employer, unless a successor makes provision to continue the Plan, in which event the successor must substitute itself as the Employer under this Plan.

Employer A merges with employer B. Employer B gives stock in B to A in exchange for all of the stock in A. (i would say this is treated like a stock sale). Employer A never terminated its plan. A wants to terminate its plan so the owner can do a rollover. Typically since B now owns the stock in A it would decide what to do with A’s Plan. However, our plan has a provision which says that if the employer is acquired and the new employer doesn’t continue to the plan then the plan terminates automatically. B would eventually want to start a new plan (maybe next year) but they haven’t done so yet leaving A’s plan alone for the moment. Can the owners of A rely on that provision in their plan to pay their plan out rather than be forced to merge it with B’s future Plan or relinquish control of its plan to B?

its not in the specific announcements. it is incorporated by reference in 7508A which lists all the relief that is granted in a disaster declaration. also see asppa bulletin no. 17-10.

are you sure. i would have bet 2017.

Due to hurricane participant takes 2017 RMD in January of 2018. they were given until january 31 under the hurricane relief. which tax year is it included for, 2017 or 2018?

the participant is 72 (already reached RBD). ex wife does not receive her share of account pursuant to QDRO until 2017. does ex spouse have to pay her share of the 2017 RMD? she had no account to value as of 12/31/2016 therefore i would say no RMD due from her. anyone agree or disagree?

the participant is 72 (already reached RBD). ex wife does not receive her share of account pursuant to QDRO until 2017. does ex spouse have to pay her share of the 2017 RMD? she had no account to value as of 12/31/2016 therefore i would say no RMD due from her. anyone agree or disagree?

interesting. it looks like its a good thing. the admin folks are going to have to customize their amortization schedules.

anyone have an answer on my follow up?

yes loans to 100,000. deferred repayment. hurricane distributions etc.

very little out there on this other than a couple of articles. anyone know why its not even on the IRS website yet?

can the acquiring company maintain the simple plan until the end of the year in order to allow the employees the ability to fund until december 31 even though they are now working for the acquiring entity? i would think yes and the transition rule protects them concerning the exclusive plan and the 100 employee rule.

Employer has a SIMPLE IRA and is being acquired. I know the rule is the employer must give notice to employees they plan to discontinue contributions by November 2. However for participants to roll over to any other IRA or plan they must have been in the SIMPLE for 2 years. Do you keep the SIMPLE plan open for 2 years even though the employer is going to sell its assets and presumably be dissolved so everyone can rollover to a non simple plan? Can you discontinue without terminating the plan? i understand the transition rules and i am guessing part of the reason is because of the 2 year rollover restriction.

i realize no good answer but seems to me sending the money to unclaimed property could be the best bad choice. ESOP, the DB plans do not contain that provision.

relief not specifically mentioned but the IRS relief for Irma seems to reference all of the relief listed in Rev. Proc. 2007-56. can anyone confirm i am reading this correctly and that specifically the september 15 deadline to fund DC contributions would be extended to January 31, 2018?

non pbgc cash balance plan is terminating and they cant locate a few participants. is it possible to send participant benefits to state unclaimed property? i realize they could come back and request an annuity but wondering if people have a practical solution for his problem.

not paid out,

lets say the plan was a one person profit sharing. the sponsor was the sole participants medical PA. the participant died in 2014. the plan provides that the plan terminates upon dissolution of the plan sponsor. i believe the corp might have been dissolved in 2013. the plan was never formerly terminated or paid out. Would the plan need a PPA restatement?

in short, first money out has to be the RMD if the RMD is required for that calendar year (even though it can be taken by April 1 of the next year).