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Belgarath

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  1. Sad
    Belgarath got a reaction from Bill Presson in 2023 federal income tax refunds   
    Here's another laugher. Got a letter last week saying, "we need another 60 days to review." They then say you can call if you want to, but of course they don't list a number anywhere on the letter. I wouldn't bother calling anyway - that's a one-way ticket to Frustration Junction in Obfuscation Land.
    And of course, they can decide, at the end of 60 days, to delay again, or ask for "more information" which they then have 45 days to review, etc., etc.
    Our tax dollars at work!!! Gotta love it...
  2. Like
    Belgarath reacted to CuseFan in How does one decide whether a distribution happened (or didn’t) if neither side has evidence?   
    If I'm not mistaken I believe court cases have sided with participants, if they have proof they were in the plan, where the plan sponsor has not retained records to document the entitlement to and payment of benefits. I also think what DOL may view as a reasonable record retention and destruction policy would be much more stringent than what a plan sponsor or practitioner may consider.
    This is my non-legal practitioner memory from reading stuff over the years, and maybe my contextual memory is incorrect.
     
  3. Like
    Belgarath got a reaction from Luke Bailey in Last day of Plan year   
    No, I don't think so. If, for example, a participant got fired on Friday, participant would not satisfy the last day of the plan year requirement. It would be very unusual for a document to specify the last pay date in the plan year for allocation requirement, although it could - I've certainly never seen it.
  4. Like
    Belgarath reacted to justanotheradmin in Employer Match   
    Yes. Class specific match groups are written into plans all the time. Usually done only for regular match (not safe harbor or its variants). As long as testing (coverage, ACP etc) passes its fine. 
  5. Like
    Belgarath got a reaction from Paul I in SECURE 2.0 auto enrollment EACA requirement starting 2025   
    Ambiguously written? Nah, couldn't be...
    Thanks all for the opinions. It's very reassuring to be able to see the informed discussion on such issues.
  6. Like
    Belgarath reacted to C. B. Zeller in SECURE 2.0 auto enrollment EACA requirement starting 2025   
    There was a bill proposed last year that would have required automatic re-enrollment of participants who opted out or who enrolled at a lower percentage than the auto-enrollment default. If a new law would be needed to require auto re-enrollment, then it stands to reason that auto re-enrollment is not required under current law.
  7. Like
    Belgarath reacted to Peter Gulia in SECURE 2.0 auto enrollment EACA requirement starting 2025   
    And let’s consider: Many plans’ sponsors and administrators will interpret what the tax-law condition requires or permits and how to administer a set of partially or ambiguously written plan provisions about two or more years before those provisions might be stated by what tax law calls “the” plan document.
  8. Like
    Belgarath reacted to Paul I in SECURE 2.0 auto enrollment EACA requirement starting 2025   
    My understanding is the plan is not required to get an new election each year from each participant.  The plan is required to give each participant a notice each year before the start of the next plan year which explains the EACA including default elections, auto-increases, and opt-out elections among other things.  The timing of the annual notice is the 30 - 90 day window before the start of the new plan year.
    That being said, the plan document can have provisions that require the plan administrator to solicit new elections for each participant every year.  The plan may also provide that a participant that is not deferring anything will have default elections made unless the participant again opts out.  The plan may extend this default to a participant that is deferring, but is deferring below the minimum default deferral percentage.
    Then there is administration of refunding deferrals if the participant requests to opt out and the plan permits it.
    These are yet more decision points for the plan sponsor, and hopefully the decisions be made with due consideration of the company's payroll being able to adhere to the requirements of the plan.
     
  9. Like
    Belgarath reacted to Bill Presson in grandfathering in insurance policy?   
    If it's offered, then you do have to offer it to all. But it's not a protected benefit so you don't have to offer it forever. Get the current people to sign off on not wanting insurance and then amend it out for future offering.
  10. Like
    Belgarath got a reaction from CuseFan in Statutory Employee - exclude from the 401k plan?   
    While I'd observe that I think you are oversimplifying the definition of Statutory Employee (see IRC 3121(d)(3)) I'd agree that if the employee is truly a Statutory Employee, (and not a full-time life insurance salesperson - see IRC 7701(a)(20)) they are independent contractors, and thus ineligible to participate in the plan - shouldn't need an additional special exclusion.
  11. Like
    Belgarath reacted to Bird in 401K did not distribute to correct individuals   
    I agree with prior posts.
    I think it is highly unlikely the granddaughter is entitled to anything. In the absence of a named beneficiary, the plan has a beneficiary under default provisions. It's not like this is a gray area; it is simply a matter of reading the plan provisions to see who the beneficiary is. That is typically going to be spouse, otherwise children, otherwise the estate. (as fmsinc notes, there may be a longer list; it might even be shorter, as in - spouse, otherwise estate). The only way the granddaughter gets anything is if she is the daughter of a deceased child (i.e. not the son's daughter) and the plan says that the benes are "issue per stirpes" (i.e. per branch of the family tree) but I've never ever seen that in a default. (All right, I suppose the plan designation could be "estate" and it is possible the granddaughter is is entitled to something under the will or intestate laws.)
    I repeat, this is not mysterious/subject to discretion/gray area.
  12. Like
    Belgarath got a reaction from Lou S. in Changing Pro Rata Profit Sharing Allocation to New Comparability Mid-Year   
    Well, the position of the IRS is that the existing formula gives the participants a "protected allocable share"  (i.e. IF an allocation is made for 2024, it must be pro-rata) and that such an amendment couldn't be implemented until 2025.
    I've seen arguments that the IRS' position is inaccurate, but I wouldn't want to fight that battle
  13. Like
    Belgarath reacted to RatherBeGolfing in Counting ineligible participants with balance   
    You make them a participant by accepting the rollover, so I would argue that  "not a participant as of EOY" is incorrect.  They are a participant who has not met eligibility for contributions other than rollover.  
  14. Like
    Belgarath reacted to CuseFan in Basic Plan Document vs. Adoption Agreement?   
    Both the AA and the BPD comprise a plan sponsor's plan document. Therefore, to the extent a provision is delineated in the BPD without any corresponding AA selection, the BPD governs and should be followed. Not everything can/will/need to be outlined/selected in the AA and anything that is not expressly provided in the AA via a permissible selection is subject to any BPD mandates.
  15. Like
    Belgarath reacted to Peter Gulia in Counting ineligible participants with balance   
    If a plan accepts an individual’s rollover contribution and credits the amount to the individual’s account, she is a participant, at least within ERISA § 3(7)’s meaning.
    That an individual has not met the plan’s conditions for sharing in a nonelective contribution or matching contribution, or even for eligibility to elect an elective-deferral contribution, does not mean that the individual is not a participant.
    A textualist, but acontextual, reading of the line 5 instructions might support a different finding for Form 5500 reporting.
    But caution suggests counting an individual who has an account balance, even if she has not entered the plan for anything other than the rollover contribution.
  16. Like
    Belgarath reacted to Paul I in one time irrevocable election to not participate   
    An irrevocable election not to participate must be signed before the individual is first eligible to begin participation in the plan (or any other retirement plan sponsored by the employer which I think includes any other member in a controlled group with the employer.
    As a word of caution to the plan administrator, this is the type of election where in individual who misses the cut-off date may be tempted into trying to convince the plan administrator that the individual intended to sign timely, or was delayed by circumstances beyond their control, or even attempts to back date a form.  The plan administrator needs to hold fast to the timing.
  17. Like
    Belgarath reacted to RatherBeGolfing in Employer Contributions for SIMPLE to 401(k) SECURE 2.0   
    You did have a plan in place "as of the day after termination date".  My issue with your hypo is that you also had a plan in place before the transition year (the period beginning after the termination date and ending on the last day of the calendar year during which the termination occurs".
    Sec 332 adds adds 408(p)(11), which lets you terminate the simple mid year, and allows you to accrue benefits in the qualified plan during the "transition year".
    By making the plan effective 1/1 for profit sharing, you are maintaining the qualified plan while also maintaining the Simple.  The reason you are allowed to terminate the Simple mid year is because you replace it with a qualified plan.  It seems clear to me that the intent is for one arrangement to be maintained at any point in the year, rather than allowing both to be maintained at the same time.
    So, while I agree that 408(p)(11) does not specifically preclude the SH plan from being effective 1/1, I argue that 408(p)(2)(D)(i) already precludes you from doing this.  
  18. Like
    Belgarath reacted to Paul I in No response from IRS   
    There is far less peace of mind in assuming the IRS closed a case as compared to confirming that the IRS has closed a case.
    The client should have in hand a copy of the IRS notice and of the response, and then call the contact number on the letter.  The agent likely will ask for information on the IRS notice including the EIN, plan number, plan name, notice number, notice date... and then search for it in their system.
    If the response is not associated with the IRS notice, then the client may need to provide information from the response to see if it can be located.  This may include the address where the response was sent, date mailed, delivery service (USPS or overnight)... to see if it can be located.
    Since the client has not receive a follow up notice, more than likely the case is closed.
  19. Like
    Belgarath reacted to Paul I in IRS Notification letter number for line 12 5500-SF   
    EFAST2 does not have a validation edit for the compliance question asking for the Pre-approved Plan Opinion Letter number and there are plans that are individually-designed plans that don't have an Opinion Letter, so it is not a surprise that the filing DOL accepted the filing.
    Some software providers have added an edit check on the field at least to generate warning if the field is left blank, and some even go further to check the syntax (first character "Q" followed by 6 numerics, a maybe even a trailing character "a").  This seems like a prudent edit since around 90% of plans use a pre-approved plan document, and particularly because this question was not on last year's form and may not yet be incorporated into a preparer's routine.
  20. Like
    Belgarath reacted to Paul I in LTPT employees   
    You are correct that for purposes of testing, the employer can elect either to include LTPTs in all applicable testing or to exclude LTPTs in all applicable testing.
    The examples 1(A) and 1(B) in section f(3)(i) illustrate how this election is applicable non-elective employer contributions.  They could have provided the same examples applicable to match as well. 
    The rule remains "all or nothing" for all of the testing listed in section f(1).
  21. Like
    Belgarath got a reaction from Mr Bagwell in By the way, Happy Pi Day to all   
    Still seems funny not having Tom remind us of this. Tom, if you are lurking out there, Happy Pi Day.
  22. Like
    Belgarath got a reaction from AlbanyConsultant in mandatory cash out woes   
    Peter, this compliment is long overdue. You are without question one of the most objective and fair minded observers I've encountered, as well as being a great source of information.
    If you decide to run for higher office, I'll vote for you! 
  23. Like
    Belgarath got a reaction from Luke Bailey in mandatory cash out woes   
    Peter, this compliment is long overdue. You are without question one of the most objective and fair minded observers I've encountered, as well as being a great source of information.
    If you decide to run for higher office, I'll vote for you! 
  24. Like
    Belgarath got a reaction from Pension Nerd in mandatory cash out woes   
    Peter, this compliment is long overdue. You are without question one of the most objective and fair minded observers I've encountered, as well as being a great source of information.
    If you decide to run for higher office, I'll vote for you! 
  25. Like
    Belgarath got a reaction from Bill Presson in mandatory cash out woes   
    Peter, this compliment is long overdue. You are without question one of the most objective and fair minded observers I've encountered, as well as being a great source of information.
    If you decide to run for higher office, I'll vote for you! 
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