mgcpension

Should an RMD be paid to an Alternate Payee before distributing AP's segregated account from 401k plan? Alternate Payee will turn 70 1/2 in 2018 so an RMD would be necessary and would be based on AP's balance as of 12/31/2017. The court order was signed in Sept 2017 but it not provided to the Plan Administrator until mid January 2018. The participant's account was segregated in Feb. 2018. The AP did not have a segregated account balance in the 401k as of 12/31/2017, so is a 2018 RMD necessary or not? If a 2018 RMD is necessary, should the participant's account as of 12/31/2017 be prorated between participant and AP to calculate the 2018 RMD for the AP? or simply use the value of the AP's account when segregated in Feb. 2018? The participant will also turn 70 1/2 in 2018, however is still employed and a non-owner.

I'm not sure either...does anyone know? If the partners are s-corporation, does that make a difference?

A profit sharing plan currently being restated for PPA has "participant directed investments" language in the plan document. However, none of the participants have elected to direct their own accounts, so the funds are all in a pooled investment account, presumably managed by the trustee. Can this feature be removed from the plan with the PPA restatement? If so, does the effective date of the restatement need a prospective date? Or can it still be the first day of this plan year (1/1/16)?

thanks all...it seems the more I read, the more I was confused, so I appreciate the clarifications/confirmations

A non-owner 401k participant retires at age 79 in Sept 2014, so her RBD is 4/1/2015. She dies Oct 2014 and her spouse is her designated beneficiary. Since she died prior to her RBD, does the plan still need to distribute the first RMD amount prior to distributing her account balance to her spouse?

If an employee becomes disabled but has not separated from service, is this a distributable event? In other words, does the "disabled" employee have to be terminated in order to receive a distribution from the plan? Other info: The employee is an owner/partner and has not severed his partnership with the plan sponsor. The plan is a 401k plan. The participant is already 100% vested. The participant does not meet the plan's in-service age requirement and already has an outstanding loan. The plan does not allow hardship withdrawals.

Employer has semi-monthly payroll but pays monthly commission to many employees, thus they would like to only withhold the 401(k) deferral once a month when the monthly commission is paid. Is that acceptable if the deferral election form states that the deferral will be withheld only on one pay check per month?

Participants made investment elections from a panel of funds. However, when their contributions were deposited to the plan, they were invested in a "default" investment instead. The plan sponsor and trustees recently discovered that this has been occurring for several years and are willing to make up any losses incurred. If a participant's had a gain, it will remain in the participant's account. This is a small plan with about 30% of the participants incurring a loss. Since they are willing to "self-correction" and let the participants know what has happened and how it is being corrected, is this an issue that should be or could be reported under the DOL's Voluntary Fiduciary Correction Program or the IRS's VCP?

Has anyone heard of SEP's not being allowed for S-corporations in 2012? A tax client has told his tax preparer that they were told by American Funds that S-corps will not be able to make contributions to a SEP in 2012. We're not sure if our client misinterpreted the information they received from Am. Funds or if it was communicated properly. Also, supposedly a letter is being mailed by the end of July regarding this to all Am. Funds clients.

A tax client has a safe-harbor 401(k) plan that includes prevailing wage contributions. Is there any reason that an owner's son would not be allowed to defer or receive the PW contribution, assuming the plan document allows for PW contributions to all eligible employees and the son has met the plan's eligibility rules?