thepensionmaven

David Rigby, curious to know why this is "wrong". I've seen many agreements that will specifically state this - upon the sale of the company, employees of the seller become employees of the buyer and become immediately eligible for entry into buyer's retirement program. Botn buyer and seller sign the agreement. Since this a legal contract, separate and apart from the plan document, how could this possibly be "wrong"?? Obviously buyer's plan need be amended, or at least a corporate resolution amending the plan to allow these people to come in.

Client selling the assets of his company, effective 6/5/2022; all employees will be terminated, employee contributions cease as of that date. Employer has yet to make the 3% safe harbor (always made after the end of the plan year), so the plan must stay open to receive those contributions. The buyer maintains a 401(k) to which all participants in seller plan will rollover, but the plan has a 60 day eligibility requirement, Can't the seller's plan remain open for those 60 days?? One participant has an outstanding loan, to which no further payments can be made after the participant terminates. The outstanding loan balance is a QPLO which can be rolled over, can't it just sit in the seller's plan until expiration of the 60 days? The solution would be for buyer and seller to agree to waive the 60 day eligibility for employees of the seller's plan, but that has yet to be decided.

isn't there a 7-year rule covering the maximum amount that can be rolled over into the QRP?

This plan is terminating, the employees are terminating employment with the seller and will be employed by the buyer on the date of sale. My reading of the QPLO proposed regulations amending 402(c)(3) is that the outstanding loan balance is an eligible plan rollover simply because the participant and the plan have terminated. The proposed regs do not mention that the participant must be BOTH over 59 ½ as well as a terminated participant/plan is terminating.(I'm not an attorney, so of course I could be wrong). This would suggest that the participant, whose total account balance consists of the investment account plus the loan, let's say is $17,000 (loan outstanding of $3,000 plus investment portion $10,000), since the loan is a QPLO because both participant and plan are terminating, the loan balance is an eligible rollover distribution, which can also be rolled over. I do not see how the $3,000 outstanding loan balance could be taxable if he's is rolling over. Am I missing something?

Excuse the senior moment. Same situation, plan is terminating, all employees working for new employer. One participant has a loan outstanding. Since the plan is terminating, and the participant can not repay at the moment, isn't the outstanding balance offset from his account balance? let's say he has a $14,000 account balance plus an outstanding loan balance of $3,000; total account balance $17,000. Is not the $3,000 offset against the total account balance of $17,000, in effect meaning the loan is "forgiven". What am I missing here? I advise my clients not to offer loans.

Client's accountant suggested filing "corrected" 1099Rs and sending them in.

Perhaps a stupid question (please don't agree) - how would one know whether these amounts are included in gross w-2or not??

There used to be a deminimus exemption for a plan that had less than ten 1099s.

Participants were given 1099-Rs by January 31; 945 filed with IRS by 1/31/22; client has not yet filed the pink 1099-R/1096. Excuse my ignorance, but what is the penalty for late filing with IRS; can the fine be paid with the submission and on what form, if possible.

Why would they deserve kudos when they are sending out emails concerning 5500s that are not recorded as timely in their database, although they issued Acknowledgement IDs and there is a clearly marked "Special Extension"? Something out of whack.

And of course the client thinks that WE did something wrong.

Two months later, clients receiving emails asking for "missing" 2020 5500s.

Yes, as long as you file prior to receiving any letters for DOL. Agree with Bill, don't wait too long.

I have released a client from my servicing contract and he is asking me to return my files. I know this has come up before, my files consist of paperwork the client has submitted to me (W-2s, K-1, etc), my calculations, my copies of the investment reports I access online. Aside from the client having all this information already, is there any basis for me to send him my file or is this just "sour grapes"?

We were questioning if the participant could have taken a COVID withdrawal from both his SEP and his defined benefit plan.

Accountant is checking as to whether his client could have taken COVID distributions from his SEP as well as from his defined benefit plan. Distributions both taken prior to 12/31/2021. Client was talking about taking a plan loan, which we thought never materialized; I can only assume the client had taken a loan prior to September 30th and has not started repaying. Too late to do anything about it now.

Having a senior moment. Participant hired 1/20/20, EC Period 1/20/20-1/19/21 - 1,000 hours credit. Overlap is 1/1/21-12/31/21, worked 870 hours. Plan defines eligibility for contribution as 1,000 hours OR last day. I think she is eligible 1/1/21, and since employed on ast day of the year, must receive a contribution?

Accountant has a client who is not a resident of the US, but has income paid to her LLC. She is in this country more than 90 days each year. Can she set up a qualified plan for the LLC income.

Participant terminated, entitled to payout, check was requested from the annuity carrier. Plan Sponsor receives the 1099-R showing Plan Sponsor as the recipient, with the gross amount the participant is entitled to, and an amount withheld. The broker must have established the annuity in the company name and not the name of the Plan. I would think the annuity carrier paid the IRS the withholding but under their EIN. Annuity carrier sends Plan Sponsor a net check, sponsor deposits into their corporate account and pays the participant, cross referencing the whole transaction. Now participant is calling client complaining she ever received a 1099R, and client comes to us to prepare. I believe that since withholding already paid, I would show the net distribution as the gross and the net amount taxable with $0 withheld?

How about "The Plan Advisor" withe the caveat "we are not investment advisors"

Thanks for the replies, it turns out the whole account is part of the principals account balance.

I was afraid of that; now to go back at least 10 years to redo.

Strategy goes back to the 80s, recently took over a client with profit sharing plan, owner and employee are the only two participants. Employee's funds are with a mutual fund only; portion of the owners funds are invested in a limited partnership. I know an independent appraisal is needed, but would the whole partnership be part of the plan investment or just the ratio of the original investment to the total? Prior TPA used the full value.

I posted on the same subject last week. Same situation, we responded to the email, complete with DOL acceptance and included our FEMA attachment. Every EFAST filing has been check marked "Special Extension- New York - Hurricane Ida- FEMA- 4615-DR", but due to these new emails, will add separate attachment advising same information. Whether they are testing a new system or not, this is irritating to the client and they pass it on, when a client receives a letter or email. And who do they blame? The TPA, of course. Would expect this from IRS, but not DOL.

We were advised to add "FEMA" to the special extension line, just for that reason. Clients have been receiving emails from DOL which is surprising as everything goes through EFAST, which is DOL related.