Belgarath

Not sure I understand the question. Was the lump sum distribution was paid directly to the former employee, with the check issued to the employee? If so, there was a taxable distribution with 20% mandatory withholding, and a 1099-R would be issued accordingly. There's no subsequent 1099-R when the individual then rolls to another IRA, or to another qualified plan. The participant would have to show the rollover on their individual tax return for the year in question. I'm wondering if there s some additional detail that you can provide, if there's something else you are really asking?

Your brother.

Agree, but it doesn't matter anyway. You need to have at least 80% for the "controlling interest" test, and you don't have that. The controlling interest test is where the same 5 or fewer people have ownership that equals or exceeds 80% of both corporations – and they must own at least some stock in each corporation to be considered.

Interesting question. Experiences? None. Thoughts? I would never go down the rabbit hole as to when an individual is "born" or "legally adopted" for purposes of this question in the context of either a cafeteria plan or a qualified plan. LEGAL COUNSEL all the way! My preferred choice is not to allow the QBAD's in a plan to start with, although your situation is probably rather uncommon.

Funny - I just checked their website again, and the SECURE Amendment and instructions are there, posted on 5/31/22. Unless they are planning to take it down and issue a new one, it can be used for both governmental and non-governmental, as per the following election on the amendment: (6) [ ] 457(b) Plan (select one): [ ] Governmental employer [ ] Tax-exempt employer

I'm working. You mean Labor Day doesn't mean you are supposed to be laboring?

Thanks all.

I'm certainly no lawyer, but if I were the Plan Administrator (and so foolish that I didn't believe in paying for legal advice, so making my own determination) I would interpret this such that the contingent beneficiary(ies) would receive the death benefit. If the amount involved is quite small, I think it would be reasonable to take the "risk" - such as it is - of making my own determination as Plan Administrator.

I've done SIMPLE VCP's, but I don't ever recall doing one for a SEP. Certainly not recently. But IMHO, I'd be surprised if the IRS would accept this. They don't generally like a fix that screws a NHCE. Unless you can convince them that depositing it all to the wife's account was a mistake, and this is just correcting it...they might go for that. If 'twas me, I'd just play it straight.

Ok, thanks. Since it was prepared by their attorney, I'm happy to accept it. I was just curious, for my own info.

Amendment just came in. The adopting resolution language says it was "duly adopted" on August 25th. However, it was SIGNED on August 31. Is it still valid, or do those dates need to match? Does it depend on state law? P.S. I'm talking about the corporate resolution. The amendment itself, while being signed on August 31, isn't effective until November 1, so no worries there.

link to form 4506 that EBE refers to. https://www.irs.gov/pub/irs-pdf/f4506.pdf

FIS has posted a SECURE Act amendment that can be used for tax-exempt 457(b) Plans. I believe it was posted back in May or early June.

So I have a question: what if you have a new plan, effective 1/1/2022? They utilize individual brokerage investment accounts. First annual valuation/reconciliation will not be until the 12/31/2022 valuation, but they are not pooled accounts - they are participant directed. How in the world would you do a lifetime illustration on such a plan, by mid-September?

Thanks Lois! P.S. - for me, at least, the slides link isn't working. Doesn't matter, because I'm sure they will be posting them shortly for anyone who attended the webcast. But the webcast recording itself is working, so when I have time, I'll be able to go back and listen to the part in question. Thanks again.

For anyone who watched it (good webcast if you didn't) - at one point my attention got diverted for a couple of minutes by an e-mail popping up. When I dragged my attention back to the webcast, I THOUGHT I heard them say that for a tax-exempt 457(b), a SECURE amendment was due by 12/31/2022. Did they say that?

I recall seeing some debate on this in the distant past, but I don't recall any consensus. Say an employer does a corporate resolution to make a discretionary match, or PS, then doesn't make it. Are they now legally required to make it? If not, shouldn't be a plan qualification issue, just revising valuation(s). (And let's assume there's no employment contract that dictates an employer contribution.) Many employers never end up doing a resolution. If they never did the resolution, then I presume the "failure" to make the contribution isn't a problem anyway? There may be a potential bankruptcy looming...

It seems to me that it isn't, as the "Retiree" arrangement allows participant voluntary after-tax contributions, whereas the HRA's are, as far as I know, employer-funded only. I don't work with Health Insurance plans at all, and I'm finding the available information pretty fragmented and confusing. Is there a source that anyone knows of that gives a good, solid explanation of what these plans are, and the "rules" in relatively succinct form? Thanks.

Yes, assuming your document permits it, you're fine. (I'm obviously assuming there are no other contributions than deferrals/SH match)

Both spouses (business owners) were taking RMD's. Husband dies. Wife dies 8 days later. No 2022 RMD's taken yet. Both spouses had each other as primary beneficiaries, 2 adult children as 50/50 secondary beneficiaries. These questions are more difficult than pre-SECURE Act, which is why I'm double-checking myself. Since there are multiple "Other Designated Beneficiaries" - the 2022 RMD is calculated as usual - using the deceased participant's age to calculate the 2022 RMD. 1099-R's , since neither spouse is alive to receive the RMD, will go to the beneficiaries (children)? For future years (although I expect children will roll over entire remaining accounts to inherited IRA's) the RMD's would be calculated on the older child's age, unless separate shares, etc. Have I got that right?

Well, you may get different opinions from different folks. I would say you are ok for accepting employee self-certification that the employee lacks other resources to satisfy the need. As to approving the AMOUNT/NATURE of the need, yes, it is possible to accept employee certification, but the procedural requirements are fairly rigid. Many employers/TPA's find it easier and "safer" to continue to request source documents for substantiation of the nature and amount of the hardship need. The IRS audit guidelines give guidelines for acceptable substantiation for either source documents, or a "summary" of information, etc. FWIW, we still have our clients obtain source documents. (bills, eviction/foreclosure notices, etc., etc.)

I believe it depends upon the company. I've seen "packages" where price is locked in for 2 or 3 years, even if bonding amount increases, etc., etc. - but I really don't have any direct contact with actual insurance companies for ERISA bonds - we just tell the employer to get the bond, and to contact their insurance broker. Here's the list of approved vendors: https://www.fiscal.treasury.gov/surety-bonds/list-certified-companies.html

If you are working on the 2021 plan year, then the bond is generally based on the prior year value - while most folks use the prior year 12/31 value, it technically is the highest amount handled during that prior year. If the value increases during 2022, you don't need to increase the bond. Most of them that I see now have an automatic increase rider on the bond as assets increase.

Without any research, I'd say that technically it is not a "valid" contribution to a qualified plan, and all the consequences that flow from that. In practical terms, I haven't ever encountered this, and I don't know if an IRS auditor would necessarily put the hammer down if the plan effective date was 1/1/21.

FWIW, I note that in the Erisa Outline Book, there is a comment that "apparently" - since IRC 414(n) does not cross-reference IRC 409(I), the IRS is apparently of the view that leased employees may not participate in an ESOP maintained by the recipient organization. It then refers to Q&A-26 of the American Bar Association's Q&A session with the IRS on May 7, 2004, which is available at the ABA website. Don't know if this helps at all...