thepensionmaven

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????

We're doing 1099Rs for some clients that have brokerage accounts and the brokerage firm will not prepare the 1099s. (No surprise). Should we be getting the name, address and TIN of the brokerage house, as they prepared the check and note them as the Payor on 1099R, or use the Trust ID number for the Plan and make the plan the Payor

I am speaking of pooled money in something like 10 annuities.

Similar question, did not know if I should start another topic or not. We handle a profit sharing plan that is invested in annuities. The previous TPA had been using the balance forward method of crediting gains and losses, but that is not my question. If the accounts lose money, all participants share in the loss. The accounts are being taken over by a new investment advisor who was reviewing the annuities - each one is within the surrender period so he has to freeze them. One of the participants terminated and is looking for her money. If she receives her money based on her 12/31/2020 account value, would not all participants share in the surrender fee as part of the investment gain/loss as of 12/31/2021?

That is exactly what I thought. The client's spouse (the other trustee, the one I have been dealing with) does not understand the difference between a stock v asset sale or even why the question. I had asked the accountant but have not heard back. I am assuming an asset sale as buyer and seller are physicians; how would differ if stock sale (just in case I'm asked)

We have PA ( not state of, but Professional Association) that sponsors a plan. The PA is in the process of being sold, projected to be 1/31/21; plan termination set for 1/31/21, as well with appropriate notices given timely. We know IRS does not recognize a plan without a Sponsor and the IRS does give up to 12 months from the termination date to distribute all funds. Obviously impossible to distribute all funds by 1/31/21. Technically, when all assets are distributed, rolled over or cashed out, the "Sponsor" will not exist. Maybe I'm being too technical, but how to handle such a situation?

That is exactly why the question. Participant paid out 3rd week of December, withholding not due until January 15th, accountant paid on January 8, 2021. From what you are saying, since the withholding was not actually paid (but was deducted from the participants distribution) in 2020, I would show as not paid and still owed, line 4 would be $0, line 5 would be the amount paid in January, 2021. And mark our records to prepare a 945 for 2021, one year from now. Oh boy, I'd better warn the client he will get a slew of love letters.

Participant received a distribution in December, client has until the 15th day of the following month to pay the withholding. Accountant paid the withholding electronically on January 8, 2021. For which year would 945 be due? I'm attempting to think ahead of a possible problem with IRS.

Yes the definition was changed for 2020; previously the owner and spouse had to own the company. If spouse had no ownership interest, the spouse was technically an employee and this would not be a one participant plan.

The instructions to Form 5500-EZ make it pretty clear that IRS considers a plan wherein the husband AND wife together own 100%. What about attribution - wouldn't the spouse of the oner be included as an owner? The daughter of an owner if she is a stockholder? Just wondering.