thepensionmaven

Good question, the whole thing does not make sense, I'm sure the life insurance agent mentioned his client could put life insurance in the plan and deduct the premium.From what you are saying, the insured would be responsible to pay the interest and premium as if a personal policy. Since that portion of the policy transferred into the plan has no cash value, am I to assume it never will, or if so, when would we start counting any cash value buildup? This is CRAZY, but it's what the client wants to do.

We have a similar situation. Broker is in the process of setting up a new defined benefit plan for a client. The client has an insurance policy he wants to split the policy, 1/2 will be a transfer into the plan (transfer ownership from himself to the XYZ Pension Plan). The other half will remain individual ownership. The actuary, who has now retired, had recommended this and told the client to strip out the portion of the cash value of the face amount to be transferred, ie take a policy loan for the full cash value and then change the ownership and beneficiary to the plan. Years ago, (prior to PPA) when I worked at an insurance company, we saw insurance policies being transferred OUT of a plan as the participant had terminated employment or the plan terminated and the individuals needed to keep the policy; but never seen an instance where a personally owned policy was being transferred INTO a qualified plan. I'm not questioning the wisdom (or lack thereof) of this, but do not recall exactly how this would be accomplished: Is this correct: Insured takes policy loan equal to the cash value of the policy, changes owner and beneficiary to the XYZ Pension Plan, receives check for the cash value. What does he do with the check? Deposit into the plan? He does have the option of not repaying the loan, but not if we consider the loan a plan asset. I can't see him transferring the cash value into the plan, as that would defeat the whole purpose and as a plan asset, would reduce the investment portion of the plan contribution. I'm bit hazy on how this transaction would be done and would appreciate any assistance.

Does anyone have a copy of RevProc 2021-30 with page numbers in the Table of Contents?

Figures.

My client is self employed, sponsors a DB plan, no employees. For 2020, he is not showing any Schedule C income; he has arranged to deposit $6000 per month into the plan brokerage account. The accountant at least knew he could not deduct as a pension expense and "buried" the amount. Would this amount be shown as contribution on SB?

Anyone remember the song from the '50s "Heartaches"? "Well, here we go again" Concerning the PPA restatements, a question was asked about fees, specifically "what is the range TPAs are charging for the documents. EBRI published their survey on fees charged for the PPA restatments, broken down by prototype, volume submitter and IDP; with highs and lows for each. I seem to recall the individual who posted the question (and it could have been me), was totally blasted for having the audacity to ask such a question. Comments like this is a conflict of interest to discuss fees, this is unprofessional, this is against our code of conduct, and something about a servicing agreement. All we are looking for is a range. Something like "we have seen" a range of X-Y. How is that unprofessional, when we are retirement plan professionals asking one another? How is this counter to the Code of Conduct when we are not only speaking among ourselves and not mentioning a particular client? Certainly we are not providing documents to our clients out of the goodness of our hearts, not any of us a re charitable institutions; and I'm sure none of us want to charge a fee so high that a client or prospect will walk away. Just a range - what's the harm?

We know that no signature required on Form 5558, but we have always dated the form. I seem to remember the form has to be dated, but my software vendor says no. Curious, I've got about 75 calendar year extensions, I'm doing currently, and if they don't need to be dated, great.

I am curious, as well. He's 68 years old.

Benefits are fully accrued, this is a cash balance plan, so no average salary. Are you saying just freeze the plan? The principal is going to retire shortly. I have mentioned the 50% excise tax many times, both to client as well as accountant. Seems like all they are thinking of is deduction, deduction, deduction; and the broker? Well, you know - commission, commission, commission. Someone had suggested starting a profit sharing and/or 401(k).

I have never worked with an over-funded DB. I have almost the same situation as Hojo. My client is a sole prop and sponsors a DB with one active and one term vested participant. I designed the DB ( a CB) plan and heavily mentioned (at least a dozen times) the rate of investment can't be more than 5-6%. Needless to say, the investments yielded on average 6-9% First year contribute was $250k and the investment individual told the client he could contribute $250K each year, which he did, and all during the year. Against my advice. Similar to Hojo above Needless to say the plan is overfunded, by about $350K. I was thinking he could start a new PSP, rollover a good portion of the over-funded, in addition to a contribution to the plan and just let the DB sit for awhile, then terminate. But how long is "a while"?

Does anyone know of a COVID-19 re-amortization schedule that someone has created in Excel?

Client forgot to file form 5558 yesterday and was told by accountant o file one today, send overnight and also to get"into gear" and file Form 5500-SF today and check off the box for Form 5558. I know Ogden is backed up, but what are the odds this one would slip by with no penalty? I mean, I have never heard of a penalty for a form 5500 being one day late.

I think I brought this up in another thread under the topic "945 for 2020" in Message Board 5500 - 1/13/2021.

Now, I see where you're going. The client wants to know how much of this can be "forgiven".

Seems pretty straightforward to me. Perhaps not explaining correctly. Client is a PC, he has made his 2021 plan contribution already. He just received his PPP money. Can the employer (PC) recoup the amount the PC spent on the contribution with the PPP money. We know the client can use PPP money to pay the contribution; the question is, can PPP money be used to reimburse the PC.

I think his question now is, can the employer reimburse the PC with PPP money for the contribution.

No, my client is the owner of a PC (S Corp) that sponsors a safe harbor 401K with profit sharing. He has gotten conflicting answers as have I. He is questioning the loan forgiveness provisions of PPP; he's selling his practice, wants to make the 2021 employer contributions now and wants to know 1) if he can reimburse the PC for the contribution from PPP funds and 2) are retirement plan contributions eligible for PPP forgiveness. Some articles say this is permitted, others say it is not. Of course, the account steels his client... "I'm not sure...check with your TPA."

Client received some PPP money recently, wants to know if he can use it to reimburse his PC for the employer portions of his SH 401K. I seem to recall, he can use the PPP money for leg expenses.

Agreed.

Client has made his 2020 profit sharing and safe harbor contribution, just received some PPP money and wants to know if he can reimburse the PC. I know he can use PPP money to make the contribution, but not sure about reimbursements.

Client mailed 1099R/1096 to IRS via FedEx at the street address given online.the PDS address, informs me the tracking # shows they are in Austin but they are not delivered to IRS. Anyone else run into this?

Thanks all.

OK, but the investment firm, ie Ameriprise (not the brokerage firm that brought the account to Ameriprise) either opened up rollovers for those participants who rolled over, or withheld the 20% and paid to IRS. The funds at no time went through the employer. Different answer? I think the client should determine if Ameriprise prepared the 1099s as it would be inconsistent to use plan's EIN for 2099s and Ameriprise for withholding.

I handled a plan that was invested with AXA. AXA wrote the check directly to participant, gave

I would agree, but, unusual as it may seem, this one particular case, the brokerage institution wrote out the checks to either an eligible rollover institution, or to transferred to an IRA rollover established by the brokerage institution. Only one individual took a distribution and paid the 20%. In this particular case, I believe the pay or would be Ameriprise, on all 1099s, with their address and EIN????