thepensionmaven

My experience has been that some record keepers ask the participant to complete a loan application and send out a check. That’s it. I am proactive in my approach by attempting to ask myself what an auditor will be looking for if the plan is subject to audit. In my role as an ERPA I handle many IRS audits of plans with loans; an auditor of plan with loans has always asked for a loan document, collateral pledge and assignment, as well spousal consent if the loan is over $5000 and of course an amortization schedule Of course, the auditor looks to see that not only is the loan being repaid as well in accordance with the amortization we provide. IMHO, better to be prepared in advance.

As well, with this particular plan, compensation is defined as 415 compensation, w/o adjustment, W22 plus employee compensation. W2 is shown on some of our plans box 1 is net, some box 5 including deferrals. No wonder why so many safe harbor and PS plans are calculated incorrectly.

isn’t the 3% safe harbor based on gross, not net?

I must be having a senior moment here, but let’s say we have an employee with a W-2 of $25,000 and he contributes $23,500 as a deferral, so the net W-2 is $1,500. The accountant is telling me the profit sharing contribution can not be 25% of $25,000! I believe he is confusing the higher wage earner whose max contribution includes the employee elective contribution .

Client returned a signed page 1 for me to file. Will this be accepted??

401(k) is a SHM plan. Employer did not make enough of a matching contribution to cover the total contribution and the corporate tax return has been filed. Can the owner waive a portion of the safe harbor he would have received, , such that he does not have to pay in the additional sum.

We have an overfunded DB the client needs to terminate. There is plenty of room to raise projected and accrued. There are 4-5 vested terms that terminated more than 5 years ago. Question, although possible to recalculate on a new benefit (obviously to reduce the overfunding), since they terminated over 5 years ago and have NOT been paid out anything, is it necessary to recalculate these benefits???

Thanks very much. I did look at this, great program, but I am a mac user and e does not have a Mac version and does not plan to include one .

Absolutely, way too many. Thanks

Client sponsors a standalone profit-sharing plan, family only; six individual accounts with Vanguard. Spouse thinks she know all, saw something online that allows a rollover to Roth IRA, gets husband, over 59-1/2, and plan allows for "in service” to rollover all his Vanguard accounts to individual Roth IRAs, without paying any taxes. To my knowledge you can’t rollover unless taxes paid, but of course, could be wrong.

Thanks, would not the April be based on the 12/31/23 account balance, yet age in 2025;and the second distriubtion due by 12/31/25 based on account value at 12/31/24 at age in 2025 as well?

I have never had a participant defer the first distribution previously. Participant turned 73 in 2024, deferring first RMD until 4/1/25. 4/1/25 based on 2023 account balance; 12/31/25 based on 12/31/24 account balance. Which year does he get the 1099R for, 2024 or 2025? Age for 4/1/25 distriubtion would be age in 2024?

Assuming a rollover ASAP, wouldn’t an RMD be needed from an IRA by April 1st? Or are we saying this is a death benefit and will not be subject to RMD. Sorry for my confusion, we customarily mention that terminated participants (treating a death as a termination) had to take an RMD prior to rollover if at RMD.

I'd say 5 out of 4. Date of Birth 4/5/1951, was 73 4/5/2024 Died 5/14/2024 Therefore, if I am reading correctly, no RMD? TX all.

He did in 2024, apparently the spouse had rolled over a portion in 2023, which of course I was just informed. Plan does not say anything, except we know before rollover, an RMD must be taken. The broker seems to think this is a death benefit, which is entitled to full rollover and therefore not taxable. Figures, right?