Blinky the 3-eyed Fish

I agree. I found out that same information. They can submit, but it seems like they better have a good reason why the owner didn't make payments. In my case, he just forgot to, so I have serious doubts he will be successful.

I am being told by colleagues that to correct under the Rev. Proc. one must submit under VCP, and VCP doesn't allow the correction for owners. I am in the process of confirming this information for myself, but I wanted to throw that out there now.

An owner takes out a loan in Oct 2016 with monthly scheduled payments. He doesn't make a payment by the time we notice in May 2017. Is there anything that can be done to make it so the loan is not in default? After all, if he had taken out the loan with quarterly scheduled payments, the first missed payment wouldn't have occurred until Jan, and the loan wouldn't have defaulted until June 30th.

Lou, thanks, that was very helpful. Thanks everyone for welcoming me back, but I still might stay in the deep end and not surface too often. We will see what time allows.

Some of you many have thought this fish was dead, but I live on! An HCE terminates and rolls over the money in 2016. The plan then fails the ADP test that requires refunds. I believe the correct method would be to issue a corrected 2016 1099-R to show the taxable piece and the piece that could be rolled over. The problem is the recordkeeper won't issue a corrected 1099-R. What's the solution here?

I would like to know more about these plans as well. I am not quite sure how they work. Also, for what clients do they work best for say versus a cash balance plan with interest credits tied to the plan's actual rate of return. I did find this in a Google search: https://www.cheiron.us/cheironHome/doc/Retirement_USAv1.pdf Also, I got a hold of a proposal that I would like to share, but I can't figure out how to attach a pdf file to this post.

A substantial owner by definition is anyone that has 10% ownership or more within the last 5 years. 1563 attribution attributes ownership from parents to the child until age 21. Once the child is past the age of 21, the attribution rules from the parents change (you can look up those details). So, until age 26, the child is treated as a substantial owner. Once they hit 26 though, without 10% or more of their own non-attributed ownership, they no longer are considered a substantial owner. Make sense?

Lance, you are new to this group? Well that's interesting. You might want to investigate VEBAPLAN. He's been using your name in his signature. Maybe you are just looking for a fresh start after VEBAPLAN's postings. Maybe you have Schizophrenia and Lance is the nicer personality. Maybe you have dementia and have forgotten VEBAPLAN. Anyway, good luck with the "new" you.

Yes, the plan is subject to ERISA.

Hi All, I am asking this for a colleague. Has anyone come across a 403(b) plan that receives employer nonelective contributions in which the employer controls the investment of the contribution, not the participant? The participant deferrals are subject to participant direction in individual custodial accounts but the employer would like to have the nonelective contributions in a separate custodial account in which they select which mutual funds that the contributions will be invested in, similar to typical trustee-directed arrangement in a profit sharing plan. I can’t find anything in the regulations that prohibits this but also can’t find anything that specifically allows for it.

That's explictly not kosher.

A client in a self-directed 401(k) plan owns land within the plan. He is now in the process of building a house on that land funded with personal money. He of course plans to use this house as a vacation home. I can't figure out a way for him to correct this situation to allow him to use the house. He can't use the house on the land owned by the plan = PT. He can't buy the land from the plan = PT. Unless there is some exception that I am not seeing. If an exception doesn't exist, anyone know the process to apply for one? One other fact: he can't distribute the land from the plan. The money consist of sources ineligible for distribution pre-59 1/2.

The AFN must go to each participant. Because they don't count for PBGC premium purposes (they would count for determining whether or not the plan was covered by the PBGC) is not relevant. I think if you trace what is defined as a participant for AFN purposes you will reach the conclusion it must go to even those with no net benefits. Logically, the AFN replaced the SAR and the SAR went to such participants, so it only makes sense.

Does anyone have any insight concerning the requirement to provide an individual statement to participants reported on the 8955-SSA? Technically, most monthly participant statements issued by John Hancock or similar firms have all the required information on the statement. Of course the context is lacking so showing a lump sum on a statement might not really meet the requirement to provide the “nature, amount and form of the deferred vested benefit to which the participant is entitled”. But then again I think of the reason that a statement requirement is there in the first place would be to let the participant know that they have this plan money. A monthly brokerage statement surely lets them know they have money and so maybe it does meet the requirements. Is anyone taking that approach, relying on the brokerage statement as sufficient and not issuing a new statement with the 8955-SSA filing?

100%. No time to research cites.