ESOP Guy

And why should it? The pro-life position is the taking of an innocent human life is wrong and has been the moral and legal position of humanity for a long time. In all the cases where this issue comes up we have an innocent human life. Therefore, the same protections are due those lives. It is far from obvious quality of life issues ought to justify taking another person's life. Even with end of life issues there is clearly a huge moral and legal difference between suicide and euthanasia.

And by moral issue you mean actually expecting people to follow the law? Which I would add is a conservative value. One of the biggest fallacies in political conversations comes in ridiculous claims of hypocrisy. This is a classic example. A person takes just one value of the other side acts like that is their only value that has anything to say on the topic and runs with it. Like I pointed out conservatives believe that the law ought to be obeyed and you seem to think the AG ought to just ignore the acts of congress based on an idea of federalism- sorry there at a minimum there needs to be a balancing that needs to happen. Sure the AG could abuse the idea of prosecutorial discretion like what happened with Obama and the Dreamers but one can't help but think the same liberals who liked that idea would oppose a GOP AG saying he is using proecutorial discretion to stop enforcing all federal gun laws. They would rightfully be pointing out that is the executive branch not merely using executive discretion but simply in effect making new law without engaging the other branches of government. Which would be an abuse of power. You in fact would find there are plenty of people on the right that would have no problem with congress engaging in federalism when it comes to pot policy but the power to do that is in congress not the AG acting alone. I would add the whole framing of it as simply a moral issue is a strawman. The pro-pot legalization side does in fact down play the extensive health issues that comes with pot and its legalization. So there are in fact valid safety issues and not merely "moral" issues.

This has always been an interesting question. For a slightly different version from the ESOP world... If the ESOP offers as one of the diversification choices the company's 401(k) most people seem to understand you have to offer fee and ROR notices to people as that is a DIA choice. But what if they choose to do nothing? Is that still a choice? Do you have to get them some kind of fee and ROR notice for the ESOP? Even if the ESOP has nothing but company stock? Most people I know say "no", but I know a few people who say "yes". So is failing to go to a SDBA a "choice" by not making any choice? It isn't obvious the answer is "no" and Rather might be on to something.

it is interesting to see how the internet has made making being a little creative work. We recently found a beneficiary be searching out the obituary from the small town paper where the participant lived. We got the name of the church where the services were held. We called the church told them the basic idea of who the plan was and asked if the participant had any family in town. The pastor knew of the family and helped them get in contact of the plan. We worked out who ought to be paid the around $60 at very little cost. Just the time of a quick internet search and a couple of phone calls.

What type of company is B's graphic design business? Corp? LLC? Sole proprietor? If I remember these rules correct (and I am doing this from memory) it matters.

ESOP are always attorney drafted and most say you can forfeit after a diligent search that determines they are actually lost. Back when you could get D Letters they always got D Letters with that language.

We send force outs of this size to the various companies that set up roll overs for such people. Shocked the document is that restrictive to forfeit lost participants.

As long as the corp that is owned by the ROBS is a C corp then the tax on the business income is taxed at the corporate level. So if any cash moves from the C corp to the 401(k) that is a dividend. In this case that would be investment income. It would be treated no differently then if 401(k) plan got a dividend from its IBM stock. In this case the plan is NOT running a business but investing in a business. If someone were to make the mistake of putting S Corp stock into a ROBS then there would be UBTI due on the pass through income from the S Corp. ESOPs are the only type of qualified plan that can own S Corp stock and not pay UBIT. The key here from a practical point of view is the income taxed at least once. As goldtpa says the point it to put the all businesses on equal footing. In fact if I remember my tax law history UBTI started not with qualified plans but not for profits. I am thinking it was a university was running a manufacturing business and claiming it did not have to pay taxes on the profits which it used to keep the university doors open. That was seen as an unfair business advantage to not pay taxes. I once worked on a PSP plan for that owned land and cattle directly. That is to say the title of the land and any ownership papers of the cattle was in the PSP trust's name. This guy thought he was being clever becasue he was running a cattle ranch in a non-tax paying entity. His prior TPA had not thought of the UBTI. In this case the plan is running a business and UBTI was due to put this business on equal footing with other ranching businesses. Hope that helps clarify when and why UBTI is due. I am pretty sure I have it correct but it has been a while so if someone wants to make the claim I got it wrong I am willing to listen. This might be more answer then you wanted also!

Not only would I do what My 2 cents says but it has always been my understanding that if you do NOT separate the accounts by the 12/31 the year following the death iit changes how the RMDs work. So there is an incentive to separate them in my mind.

That has always been my understanding if you could not get a match you are not in the ACP test. That is how I used to train people when that was my job. The more common example is if the plan has last day language for a match those people are NOT on the ACP test. To note what might be obvious but you still have to pass coverage for that source. In fact in the extreme I noted if you allowed ONLY the HCEs to get a match you would pass the ACP test because they are the only people in the test but you would obviously fail the coverage test for that source. On the other hand if you limited all the NHCEs to a $1 match you would pass coverage for that source as they all benefited. You would fail the ACP test however. That is how I have always understood how the law stops you from getting too abusive. Any one test allows abuse but both combined constrain you.

CuseFan's answer very well have answered the direct question. This might be outside the control of the question asker but... The determination if a person is an employee or an independent contractor is a legal question and NOT subject to negotiations. Either the person is an employee per the law at which time they by law should be treated as such. That would include having the needed taxes withheld and their income reported on a W-2. Or the person is an independent contractor by law and as such should be treated as such. Thus, the person can't be in the plan and the income ought to be reported on a 1099. The language CurseFan quotes is in plans in case a court rules a person who was treated as a contractor is ruled an employee the plan would not be required to go back and cover the person for those years. I have never understood that language's purpose is to allow you to ignore the law regarding who is or is not an employee. Thus after the court rules the company could not keep that person out of the plan by continuing to claim the person isn't an employee. They would have to change the plan to exclude a given class of employees if they don't' want to cover the person. When I say this isn't subject to negotiations I mean just because the employer and the person performing the services agree to 1099 the person is irrelevant. You can't negotiate a contract to break the law if indeed the person is an employee by law. The fact you start by calling this person an employee and then talk about them getting a 1099 suggest the real problem is someone might be breaking the law on how this person is being treated for tax law purposes. And that is the reason the plan's language doesn't seem to work. It wasn't intended to cover situation where the law is being broken.

I know of CPA firms that have represented one of our ESOPs during an IRS audit and they audited the ESOP.

The other requirements are very important. I have over the years been shocked at how many QSLOB determinations fall apart on the 50 employee requirement alone.

Back a number of years ago when I worked on Omni+ you could do this fairly easily. Omni+ had a trade date, an allocation date (not exact term it has been a few years but i will give an example soon) and a post date. So let's say you were dong the TPA work for a daily 4k plan. You wanted to post the last 2016 4k deferrals as of 12/31/2016 so they were on the 2016 ADP test, but they were deposited on 1/4/2017 and you were inputting the data on 1/5/2017. Your allocation date was: 12/31/2016 Your trade date was: 1/4/2017 Your post date was: 1/5/2017 You could write calculators that allowed you to pick and choose which dates you wanted to look at for a number of the calculations. So when you wanted the ADP test to include this deposit you used the allocation date. If you wanted to exclude this account you could run a calculator to look for a trade date of 12/31/2016 or before and it would exclude this deposit. (In fact there was a post time down to the tenth of a second with the post date so if you really wanted to select just a transaction you could do it by putting in the post time.) When I first had to learn Omni+ I hated it as it was so flexible it seemed hard to work with. I was used to systems that did more of the work for you. But over the years I came to love the ease and flexibility of the calculators. Now that I work in a shop that doesn't use Omni+ I find myself constantly thinking I could solve this problem I have in Omni+ so fast with a simple calculator. As I re-read you question I am not sure I answered your question or not.

I would look for some expenses. I believe a plan can pre-pay an expense for next year this year and use the forfeitures to pay. Can one of the service providers get you can invoice? If the sponsor normally pays the invoices I believe you can split the invoice between the plan and the sponsor. How do the expenses get paid otherwise? I have had plans with people who have $2 balances. It is a pain but it happens. Just curious does this plan have an issue of no recurring contributions? Typically you get such small forfeitures when there hasn't been a PS contribution for many years. Should the people you have forfeiting the small amount in fact be 100% vested because there hasn't been a contribution for a number of years?

I am just trying to make sure I understand the question. In #1 is the DRO trying to merely adjust the payments to reflect the taxes? Example of what I mean: Let's say the DRO says to split a $10k account 50/50. It has a provision that says the participant is to "pay" the taxes for the AP. It is determined the AP will owe $1K on her part of the $5k payment is here payment supposed to be grossed up to $6k? I am ignoring the slightly more complex math that accounts for the fact the extra $1k is taxable so it should be something a little over $1k but you get my point. Is it possible they are trying to do what I described and wrote it poorly? I am guessing as I can see someone trying to do what I described but I am having a harder time thinking even divorce lawyers would actually think they get to just decide who owes a tax without reference to tax law.

You know when I Google Lowes 401(k) login I get this link: https://leplb0180.portal.hewitt.com/web/lowes/login?forkPage=false This tells me the current TPA is Aon-Hewitt. I do another Google and I get this phone number of the Lowes' Aon-Hewitt service center https://leplb0180.portal.hewitt.com/web/lowes/pre-contactus Might want to call them and and ask questions.

You need to be clearer. Did you work for a company as an employee or as an independent contractor? If an employee then contact the company you worked for and ask them about the 401(k) plan and how you access information about your account. They should be able to give you that information. If they refuse to give you that kind of information come back here with what you find out the experts here can help you decide what is the next course of action should be. If you were an independent contractor then please give us a better idea what kind of plan you set up for yourself. As a matter of good manners I would suggest starting a new thread instead of hijacking this thread.

Some version of what you are talking about can be done and I have seen it done. It is better then having the company make the loan payment on a note held by the ESOP. I don't see how that wasn't a contribution even if the money never entered the ESOP. The ESOP got the economic benefit of the payment. The obvious big issue is what is the write down of the note. Most times I have seen this it is shown as some kind of gain due to the but it isn't allocated to anyone. There is no way to allocate it. There is no cash. You aren't releasing shares. You need to get a good ERISA attorney who deals with ESOPs regularly to do this. The trustees need to decide if this is really in the best interest of the participants. There was a DOL letter put out years ago about refinancing ESOP loans to extend the years and they pretty much demanded the trustee get some kind of economic benefit in the form of a guarantee of a minimum dividend going forward or a match in the 401(k) plan. I would suggest using that as a guide. It isn't 100% same fact set but it does give you insight to the DOL's thinking. https://www.dol.gov/ebsa/regs/fab_2002-1.html In this case the issue is people will be getting less shares released then under the old note which isn't happening here but still it might be worth thinking about how the DOL thinks about this situation. I have one client where the attorney blessed what you are describing and no new benefits were given to the participants and their thinking was they are no worse or better off before and after. As you say the share release rate is the same. In fact in the case I am thinking the rank and file might have been better off as they used only contributions to fund the loan payment vs using contributions and dividends before the loan note change.

Yes it works and no it isn't a problem. In fact if I think I can get away with it when I send the auditor a draft of the 5500 it doesn't include the attachment and see if the auditor gives it to me. As far as I am concerned there is no way the client is paying two firms to the do the job that makes zero sense from their perspective.

If you haven't asked for the money it is my humble opinion that you are wasting your time and money to contact an ERISA attorney now. Find out if they are willing to help you and only if they seem to be unwilling then go to the expense and trouble of an attorney.

Lowes may have outsourced much of the work but they still have a responsibility for their plan. I would start with their HR Department unless you have a 1-800 type number with Wells Fargo. If you have a website you could start there. What you are looking for is the following: 1) A copy of the Summary Plan Description (SPD). This is a summary of the basic plan provisions. It should tell you under what conditions you can get a distribution. 2) A website or 1-800 might be able to tell you how to get an SPD and they might help you start the payment process. HR department might be able to do the same. But what you need is at this point is simple information about when and how to get paid from the plan. It might turn out a website or 1-800 number can get you an SPD and the forms needed to start the process. Does the statement you have give a website or 1-800 number? If so, start there would be my guess.

I am with Jpod. The rules say you pay RMDs when the person terminates not the plan terminates.

I have always thought you should do 12/31/2016 for the following reasons: 1) I think the first year was 2015 so they had to 4/1/2016 to get the $0 payment made by if you get my meaning 2) It is safer. I mean how big can the RMD be if they have had 1 or 2 contributions? So if you do it by 12/31/2016 will it impact much on their personal taxes? If you do it 4/1/2017 and get it wrong now there is a 50% excise tax and a plan qualification issue. Risk/return say 12/31/2016 to me.

I am not 100% sure this will make a difference but it could. You open by saying the limit is in the loan policy later you talk about amending the plan. So is the limit in the plan document or does the plan document allow for a loan policy that is outside of the document and the limit is in that policy?