RatherBeGolfing

Options are treated as ownership Not sure about RSUs. When you say unvested, is it just a time thing or other restrictions on the option?

If the QDRO is silent on fees, follow your service agreement. In my opinion, it would be improper to charge the the alternate payee unless authorized in the QDRO. As a side note, my service agreement takes this a step further. Even if the QDRO stipulates that the fee should be split, I can collect from the plan sponsor in the event of non-payment from the third party.

I agree, there is nothing to support an exemption from the 8955-SSA based on account balance. Id love to hear their justification though.

Personally, I would be aggressive and use a plan year of 1/1/16. As far as I know, there is nothing that expressly prohibits the practice, and there are at least informal comments made by the IRS to indicate that it would be ok (the aforementioned 1997 comments) . Draft your plan document to use a limitation year of 12 months ending on the last day of the plan year rather than using the plan year as the limitation year if the initial plan year is short. This way you have a 1/1/16-12/31/16 limitation year, and no proration is needed. From Sal's ERISA Outline Book:

So much for a relaxing weekend...

I understand not wanting to use revenue sharing, but do they have a problem with keeping the fees set by using basis points? I just set up a plan last week though a major RK with all non-revenue sharing funds. The still state their fee as a matter of basis points, and are paid by plan funds, just not via revenue sharing.

I would think so. Most documents I have read include some type of language giving the plan discretion. So as a matter of plan policy you should be able to refuse 60-day rollovers as long as you are consistent. for example, my document states:

I see your point, but in this case it is simply impossible for the PA to know all surrounding facts and circumstances. For that reason alone, I would never advise a PA to make this type of call on behalf of the participants. I just don't see how making this type of decision based on some partial facts known to the PA can be prudent.

The ER shouldn't make this decision, period. I'm not going to get on my soap box in regards to auto- enrollment in general, but if you are going to do it, you need to treat everyone as equals. Income & tax rates are not the only factors when it comes to Roth, so it does not make ANY sense for the ER to make this decision for the EE.

1/1/16. The second computation period ends 12/31/15 and he hasn't met eligibility until it is completed.

What right does the plan have to suspend his right to a distribution? No DRO at this point right? And the plan has not been notified of a pending DRO? A divorce does not mean that there will be a QDRO.

Processing times differ from company to company, and sometimes processing gets delayed for whatever reason. Lets look at the literal interpretation of "account balance at death" that ignores the fact that the participant signed and submitted a distribution request. It leaves zero room for interpretation. The argument is that because it wasn't processed, it is included in the account balance and therefore belongs to the QP beneficiary and not the IRA beneficiary. Lets say that for whatever reason processing was delayed and took longer than normal, and during this time, the participant died. lets go as far as saying it was 3 weeks after the participant submitted the request. I doubt anyone's document says account balance at death unless there is an unreasonable delay. Would you advise the PA to cancel the distribution request (properly executed and submitted by participant) and pay the QP beneficiary and sleep soundly?

Can I have their contact info, I might need them after this October 15 since the IRS decided to audit two clients with less than month before the October 15 deadline.... As far as the loan is concerned, I don't see a problem either. The loan was repaid, where the money came from doesn't matter for plan purposes. May have tax implications for the payee/payor but the plan is fine.

I agree. It is simply unreasonable for the beneficiary to change depending on how long the it takes to process the form. Once the Participant has made his/her wishes clear by submitting the request, that shouldn't change just because the provider took three days to process rather than two. From the providers side, it would mean possible litigation for every distribution request they process since the party snubbed due to the extra day or two would claim they were injured due to the providers failure to timely process. Possible litigation would not necessarily translate into any liability. Can you imagine someone winning a lawsuit based on failure to process a claim on a timely basis when the claimant died after only three days, rendering the election invalid? Industry standards are surely not so fast as to render a three-day turnaround insufficient. No litigation automatically translates to liability, but if processing time is the determining factor between two different beneficiaries, the processing provider would always be open to litigation. Fault or liability is not the only factor in litigation, it is also costly and time consuming. Provider issues aside, I can't think of a reason why "industry standards" should interfere with the participants executed and submitted request for a distribution.

I agree. It is simply unreasonable for the beneficiary to change depending on how long the it takes to process the form. Once the Participant has made his/her wishes clear by submitting the request, that shouldn't change just because the provider took three days to process rather than two. From the providers side, it would mean possible litigation for every distribution request they process since the party snubbed due to the extra day or two would claim they were injured due to the providers failure to timely process.

This made my day. Probably shouldn't have laughed as hard as I did since it is a serious problem, but damn that was funny! Now quick, somebody make a meme with kittens asking "can I haz 401k?"

I agree. I would also ask why you would want to remove the option. My personal opinion aside, it is such a rare issue in my practice that it would be much easier for all my plans to retain the option than remove it.

What kind of delay are you expecting? Contributions are not late just because they are not deposited immediately IF there is a valid reason for the delay. So in other words, if the deposit is made as soon as possible during the payroll switch, you should be fine. A few things to consider: 1. A delay can be reasonable if you are switching providers 2. The deposit should be made as soon as possible 3. The delay cannot be more than the 15th day of the month following segregation of assets, even if you have a reasonable cause for the delay. Edit: A black out notice is not needed for the timing of the contributions, but may be needed if the switch also impacts the participants ability to direct their accounts.

You are absolutely correct. It may be inconvenient and costly to recreate the wheel, but you really have no other choice. This is information they are required to have and are required to provide on the return. Absent a fire/flood/[insert disaster here] that destroyed all paper and electronic records of the documents needed, I can't think of a reason why it can't be done.

I can't put my finger on the number but I believe you can call EBSAs main line and ask for the appropriate regional office or the EBSA employee reviewing your filing.

In my opinion, no. The TPA has no discretionary authority here. All you are doing is making an electronic deposit of the withheld taxes via EFTPS. Do you add a layer of liability because you accept the responsibility to make the deposit? Yes. But as service providers we take on responsibility all the time, this is just another example of it. you should be covered for any potential loss due to employee theft under your normal professional policy (and the odds of one of your employees escaping with a tax deposit are probably extremely low)

I will echo Bird's comment. Do not use the employers EIN, it WILL get messed up when you get the point of doing Forms 1099, 945, 1096. Other than that, it is very simple. 1. Set up a bank account for your firm to use as dedicated account for tax deposits 2. Set yourself up as a batch provider with EFTPS (simple and free) 3. Have the client execute Form 8655 to authorize you to act as a reporting agent. Fax the form to EFTPS to enroll the client using the PLAN EIN 4. tax check is paid to you for the electronif deposit 5. submit the taxes to EFTPS on behalf of the client It really is very simple and does not take much time at all. We do this for all of our non-platform clients and it is a great way to show clients how you make life easier for THEM

You are absolutely correct, both on the free market correction and possible claim for damages. I can still empathize with the employer who picked a bad service provider though

You make a good point (or points rather). However, I still feel a little bad for the small business owner who gets hit with a big required contribution when its due to poor plan design and bad communication from a "service provider".

Absolutely. What I really wanted to say (but I was watching college football and I'm lazy) is that there are better ways to word the exclusion in the document so that you only exclude those you want to exclude and avoid having a surprise down the line when someone else falls into that category. To me, it is simply a matter of being clear and keeping it simple. In this case it is pretty clear cut. If she is an owner under California's community property laws, then she is not excluded. If she is not an owner under CA law, she is excluded. It sounds simple, but we also have to remember that just because it is CA it doesn't mean it is community property. So the real question is, is she an owner under CA law? J