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Everything posted by Belgarath

  1. Interesting that you should ask. As I find out more details, it appears that the plan's administrator DID know, but things got delayed and many signals crossed due to the paperwork received from the legal guardian and the scope of the guardianship, etc., etc., etc... - which STILL apparently hasn't been settled. The ball has apparently been dropped by various parties at various times, probably because the amount of money is so small - or perhaps for other reasons. So the forceout was processed in error.
  2. Some details are sketchy, but as far as I'm able to determine at this point... A participant terminated employment in early 2021. Left funds in the plan. Less than $5,000. There should have been a mandatory forceout in 2022 when the 2021 valuation was done, but for reasons unknown, it wasn't. When the 2022 valuation was done, (in 2023) this was caught, and a mandatory IRS rollover was processed in the fall of 2023. Unknown to everyone, (apparently) the participant had died in the summer of 2022! Just to make it more interesting, no named beneficiary, and minor children involved, but that's a separate issue. I'm really not sure what the ramifications are here, and it is a small amount of money, so I'm sure the Plan Administrator is willing to take a little "risk" if necessary, to clean this up without excessive time and effort. If the vendor is willing to reestablish this as a plan account, (they are being questioned now) then it should be simple, other than correcting the 1099 (which may or may not have been issued yet - I don't know) - the death distribution will simply be processed according to plan provisions. Any thoughts on this? I've never encountered this situation... Thanks.
  3. Honestly, I haven't bothered to figure it out yet. I fully plan to be retired by then, so selfishly, it'll be someone else's problem. I did see something about this somewhere, but I just skipped over it, so I don't know what it said...
  4. It depends. Are you talking about IRC 318 attribution, or IRC 1563 attribution? What is the situation, specifically, and for what purpose(s) are you attempting to determine the attribution? And for 1563, the ages may matter in some situations.
  5. I don't believe a 204(h) notice is required for a profit sharing plan, EVEN if the PS plan has a fixed formula. Check ERISA 204(8)(B), Treasury regulation 54.4980F-1, and IRC 4980F(f)(2). But maybe I'm missing something. Certainly won't hurt anything if you give one - I just don't think it is necessary.
  6. Depends upon the specific provisions of your document. The 5% test is based on 415 compensation, but your document CAN limit that 415 compensation to the period of eligibility. So you may be able to exclude 415 compensation prior to the date of participation, or you may need to use full year compensation. You'll need to check the specific document provisions.
  7. Has anyone talked to Relius about when the 2024 specimen plan termination amendment is going to be available? I've just spent a very frustrating 1/2 hour trying to navigate their "ticket" system and telephone support when I couldn't get the ticket system to work. And the telephone option didn't work either... I miss the old days.
  8. Congratulations! And we'd like to extend this Laurel, and Hardy handshake (sorry, my so-called sense of humor again). I have appreciated your commentary over the years. As with all such announcements, I'm very jealous, but nevertheless I very sincerely wish you a very long, healthy, and happy retirement! Take care.
  9. This always cracks me up. Along with the "Paperwork Reduction Act" analyses by the DOL.😁
  10. Rock. You. Hard place. I have no perfect solution. Electronic distribution carries its own hassles - personally, I'd prefer to stick with extra pages (using recycled paper, of course).
  11. As a slight modification of David Rigby's suggestion, just cut and paste BOTH entire IRS versions into one document - the non-Roth and the Roth. Then just have a line saying if you have only pre-tax, ignore Section "B" (the Roth) or vice versa. This approach makes for more pages if you only have 1 or the other, but you also have one generic notice, which I think would solve your problem?
  12. A valid point. As a TPA, however, I find it hard to care. Owner-only plans aren't much of a money-maker - we do a very few as a favor for a good broker referral source for example. Since they don't have to make any contributions for such employees, then if they are maxing out the contribution for themselves, an extra (x) amount for "full" admin fees seems like a pretty reasonable price to pay. Depends upon fee structure, I suppose.
  13. Looks like I was worrying over nothing (or just plain wrong...) Restatement period for Cycle 4 is likely to be from early 2027 to early 2029. Hurray!
  14. No employer contribution required if they are eligible to defer SOLELY as an LTPT. No safe harbor required, no match required.
  15. I don't think it is that simple. The proposed regs say that the class exclusion can't be a "proxy for imposing an age or service requirement." I suspect it might be generally playing with fire to use this exclusion, if the purpose is to exclude LTPT employees. Other than the PIA for determining who is or isn't an LTPT, and having the hassle of offering them the deferral opportunity, it isn't otherwise a big deal as far as I'm concerned. No employer contributions required, exclude them for testing, top heavy, whatever. I'm oversimplifying, of course, and the PIA/hassle is potentially very substantial!
  16. Not wages, and not reported on W-2. Reported an a 1099-R, Boxes 1 and 2a, code "G" in Box 7. Now, employee might want to increase normal wage withholding to take all this into account, but that's a separate issue. Take a look at IRS Notice 2024-2, Q & A's L-1 through L-11 for a discussion of the issue.
  17. Funny thing - when I was in high school, I took typing (all right, mostly because the teacher was radiantly attractive) but we had what was, for those days, pretty advanced electric typewriters. I got reasonably good at touch typing. Then when I went to college, all I could afford was this little Underwood manual typewriter, which was about the size of a lunchbox. You couldn't really touch type because you had to hammer the keys, and if you went more than about 20 words per minute, the strikers stuck together, and correcting errors back then wasn't fun. So over the course of 4 years, I lost the ability to type without looking at the keyboard, and have never regained it to this day. It is a source of amusement to my co-workers that I type while holding a pen, in writing position, between the fingers on my right hand. I've thought about doing a video of "Remedial Typing For The Slow Of Wit Dinosaur" but I don't think it would catch on. Boy, did this get off track. My apologies to the original poster.
  18. Yeah, I saw that - thanks. As things stand now, it would be my goal to have all our 403(b) plans restated by 12/31/2025, so that 2026 could start with a clean slate, in a manner of speaking, for restating 401(k) plans. But things rarely work out so well. I'd also like the SECURE amendments to be done by 12/31/2025, in spite of the extended deadline. But a lot could change between now and then!
  19. Just wondering... The 2-year restatement window for 403(b) plans is currently scheduled to open 1/1/2025. If the restatement window for 401(k) plans opens 1/1/2026,then the two will overlap. Originally, (in a galaxy long, long ago and far, far away) I seem to recall that the "regular" pre-approved plan cycles were going to be timed such that they would not overlap, but I'm not certain of that. This could create some challenges. Do you know if anyone has suggested to the IRS (document providers, ARA, etc.) that the 2-year DC Cycle 4 restatement window not open until 2027, to avoid this overlap? And if so, even unofficially, was the IRS at all receptive to the suggestion?
  20. We just had one that was very timely submitted, (early December) and the custodian botched it. Didn't cut the check until 1/2. To give them credit, they said, in writing, that if the IRS won't waive the 10% penalty, then they will pay it. I'd be a little surprised if the IRS won't waive in such a situation. Historically, at least in my experience, they have been very reasonable about this type of thing.
  21. I don't think the Code/Regs require any specific ordering. But the Plan may. Our docs specify that the distribution shall be made from the pre-tax or Roth account, as "operationally determined by the Administrator." But the distribution must be made first from unmatched deferrals, regardless of whether they are attributable to pre-tax or Roth.
  22. I think the term "SECURE 3.0" should be outlawed. Too many negatives associated with the term. Call it Breckenridge's Scourge or something like that. (Some few of you might be old enough to remember "The Court Jester.") And as an aside, if you do remember it, Glynis Johns just passed away, at the age of 100.
  23. You may want to take a look at IRS Notice 2024-2. I haven't read it in-depth to apply it to a specific situation that you describe, but I almost think that my initial skim read it providing for using the safe harbor correction in RP 2021-30, for the lower QNEC amount, even for a terminated participant. Not sure about that, however, you'd want to read it thoroughly!
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