Mike Preston

Reading the links that are returned based on a search for DOL Advisory Opinion 77-08 one can see that it has no relevance here. One, it is DOL and I'm concerned with violation of the IRC. Two, it is about relieving fiduciary liability when not asking participants to pay back over-distributions. That isn't this fact pattern, either.

Hardly needed. Arguing that 4 cents recoupment would be a hardship is a non-starter.

Not to me. The only issue I'm concerned about is 401(a)(30). There is no leway for that section, is there?

I guess it depends on the dialect spoken by the duck. If it speaks only IRA (the fact is that the account is an IRA) I agree with the ERISA esq. If, otoh, it actually speaks qualified plan (the fact is that it is just a bank account with an improper name in the title) just have the name changed. The proof is in the pudding!

In the future you can just click the little thank you thingy.

Yes.

I would recommend disgorging, but I have no problem with no reporting.

When I last researched this issue the lawyers kept harping on the requirement that any agreement must be 'reasonable'. Whether 45 days or 30 days or some other time period is reasonable is a facts and circumstances determination. I should point out that some ERISA lawyers have opined that while a service provider may reasonably be held by a plan to a specific notice period (and 45 days is more than reasonable in that event) they have been known to say that a plan or plan sponsor must have the ability to notice a service provider on very, very short notice. Some even take the position that immediate is required. Peter probably has reams on this very issue.

No way this is not a significant failure. Punt to an ERISA attorney.

Audited by IRS? Or independent CPA audit?

I thought that the IRS previously announced that IDP's can receive an LOD on installation and on termination, but nothing in between.

I think CuseFan's response is closest to what I would say. But I would go a bit further. A restorative payment's deductibility may rely on the intended use of the payment by the payor. If the payor reasonably concludes that there is significant liability/exposure then a restorative payment may be deductible as a business expense. Lots of facts need to line up to make use of this. I would want an attorney's take, to boot.

Ignore.

Yes.

The plan buys the annuity. Plays havoc.

Dang you are good at puzzles. Bet you slay at pictionary.

Yet another problem created by contributions made before the end of the year.

Aaaarrrggggggghhhhhhhh. Strong letter to follow or not.

Good plan!

And just in case it isn't clear from the brevity of my comment, thanks for the extremely well written post. I know the answer isn't what you want.

You are wrong. Sorry.

Huh?

On its own, no letter. But submitting a 5310 on plan termination is still ok.

Not exact, but should definitely get one headed in the right direction. There is no 31% rule. It is a shortcut rule that usually, but not always, works. In this case the 31% (or the actual limit) is increased to no less than $X where X is the greater of the amount that satisfiies minimum funding or the excess, if any, of the plan's funding target over the value of the plan's assets.

Yet another problem created by plan sponsors contributing before the end of the year.