RatherBeGolfing

No. Making deferrals and directing investments are two separate issues. If investment direction is THAT big of an issue to the employer/plan administrator , they should simply make the plan trustee directed.

I agree with Lou. HC is attributed 60% of company I's 60% which is 36%. Add that to the 40% direct ownership, we still don't have enough to meet the 80% threshold.

Ah yes, gotta love the "here is a document, put some X's somewhere and keep the copy" approach.

Correct. Years prior to 2012 should be submitted using the current year 5500. That is funny about the selection tool, it couldn't have been that much more work to code it to work for pre-1999 years EFAST2 FAQ: Q4 https://www.dol.gov/ebsa/faqs/faq-EFAST2.html

Hey MoJo, This would have been mutual funds. As I recall, the were told that they could do it, but since they never actually went through with it it is possible that it would have been nixed at a higher level. J

I had a situation that was a little different, but it may be helpful. I have a client, a fairly large medical practice with 10+ physicians and about 70 employees. The practice does very well. During a yearly meeting, the physicians asked whether they could pay all investment expenses out employer assets rather than from the investments. They never pulled the trigger on it but we verified that it could be done. We looked into it with the adviser and the record keeper and indeed, there was a way for the employer to get quarterly invoices for the amounts that would have been fees per the expense ratio. The fee would never be deducted from plan assets, and the employer gets to write them off as a corporate expense. I agree with ETA though, I don't think you can do it by reimbursing fees already paid by a participant and not consider it a contribution.

She can get 15%.

Just wanted throw this out there for discussion. Per the Judicial Branch of California website http://www.courts.ca.gov/1037.htm. Obviously this is just what their website says, I didn't look up the actual statutes that would govern annulment, but still... Not sure if that matters here, but if the effect of annulment is that the marriage was never legal, what would be the outcome if a participant who is not married elected to take benefits based on the life of the participant and a named "spouse"? Once it was discovered that this person was never married to the "spouse", would it be treated as a single life annuity or use the original calculation but just pay over the life of the participant? I suspect that no payments would be made to the "spouse" if it was discovered that there was never a marriage.

Just thinking out loud here because we only have some pieces of information to go on. IF the plan requires that a loan balance be paid off by your vested account balance upon termination, they would apply your non-loan assets to pay off your loan. Basically, if you owe $5,000 on your loan at termination, they apply $5,000 from your vested balance to pay the loan off. You are then issued a 1099-R for the $5,000 because it was "distributed" in order to satisfy your loan obligation. You don't get an actual check for the $5,000 because it was used to pay off the loan (and you already have the funds from the loan). This would be reported on the 1099-R as a code 1 if you are under 59 1/2, without the extra L that would be used for a loan default.. The "we can do it when we want" statements are odd though, I'm pretty sure you were talking to a call center.

A code 1 would indicate a distribution prior to attaining age 59 1/2. If it was a deemed distribution, it would have said 1L. You may be dealing with a loan offset.

What does it say in box 7 of your 2014 Form 1099-R?

Look for documentation that was provided when you took the loan. It should be in your loan procedures which was probably part of your loan application. Good luck!

It depends on the plan document. The MAXIMUM cure period is by the end of the calendar year quarter following the calendar year quarter where the payment was missed. As ETA says, a missed payment in the quarter ending September 30 would need to be cured by December 31. Practically speaking, I think most companies would default AFTER confirmation of no payment on December 31, which in this case would be in 2014. I think you can argue that it could be defaulted on December 31 because no payment was made on or before December 31, but I don't think either is necessarily wrong, it just comes down to procedure. Now, a plan document could specify a shorter cure period as well, like your example with a November 30 cure date for a August 31 missed payment with a 3 month cure period (which is less than the maximum cure period)

That is at least an argument you could make. I would probably consider the same argument if it was my client... What if loans weren't allowed at all, but the plan issues a loan amortized over 5 years. The Sponsor does not want to amend to allow loans. What is your correction? It is essentially the same question. You have a failure to follow the terms of the plan. The loan does not exceed the 5 years under 72(p)(2)(B). Without a correction, it is a deemed distribution to the participant. Simply repaying the loan isn't a correction of the failure since the failure occurred when the loan was issued. The simple answer is amend under SCP to allow for loans. I think what you are suggesting (at least in the OP) is that you can: apply the VCP method of correcting a loan in violation of 72(p)using SCP because the loan did not actually violate 72(p), it violated the terms of the plan document. Rev Proc 2013-12 6.02 allows for more than one way to correct a failure, as long as it is reasonable and appropriate under the facts and circumstances.

It is one of those "it depends" answers... In order to use the DOL calculator, you also have to file under VFCP. Otherwise, your lost earnings should be the 1) actual return participant would have earned, or 2) highest rate of return during the period, allocated to all affected participants. Basically, if you use the VFCP calculator and and dont file under VFCP, DOL can come in and say that your correction was insufficient. I believe it is still OK for IRS purposes though. There was a really good article in the Journal of Pension Benefits a few years back that detailed the different steps per the regs. (EDIT: it was the October 2012 issue. "How Much Goes Into Correcting Late Deposits?" by Frank Castrofilippo) The calculator is the easiest step, you just have to go the extra mile with VFCP.

Well, mine was after the merger with Screwem, Goode, and Hart I had a law school professor who was a genius when it came to funny aptonyms on exams. My favorite example was the dentist office of Hurt, Pullem and Yankum.

You do not need to keep 7 years of returned mail (or one year for that matter). Scan and shred away.

Just curious, is that 33 pages in addition to the employee data like Name, SSN, DOB, DOH, etc? Our year end collection is more limited, and is meant to supplement the data we already have for example Our records show that you have an ERISA bond in the amount of $10,000 issued by Dewey, Screwem & Howe SuretyCompany, is this still correct Yes [ ] No [ ]

Rev Proc 2013-12 6.07© I know you can self correct loans from a plan that didn't allow for loans, but only if the loans were within the limits of 72(p). Since there is an exception under 72(p) for principal residence loans, I think you could do SCP if you wanted to amend the plan to make the 15 year loan allowable under the terms of the plan document. Following that same reasoning, I think you are stuck with VCP if you want to correct in a way other than expanding what loans are allowed under the plan...

I agree, try to get something in writing from the IRS to be pro-active, or at the very least get the issue on record with IRS. They can log it under your firm's EIN, this way they can reference it if an issue comes. We had this done last year when many 5558's of a batch weren't processed by IRS. Are you a member of ASPPA? If so, I would also check with Craig Hoffman to see if they have had reports of similar issues. J

The assets in the account are not actually security in that sense. The 50% comes in to play only for calculating and issuing the loan. The loan is considered adequately secured when issued, subsequent changes to the account balance does not change that. From the ERISA Outline Book / Chapter 7

You are correct. If otherwise eligible, a participant can withdraw his/her remaining account balance. The 50% is used when calculating the available loan, but does not have to remain in the account after the loan has been issued. J

I'm not sure why you are treating the employer as having implemented the 0% deferral just because the employee left. The employer never actually implemented deferrals for the employee, period. An employee can't elect to have deferrals taken out of pay he/she doesn't get (or elect to have 0% deferred for that matter), so how does it make sense to call that a 0% deferral implemented by the employer?

So to sum up 1. The distribution of the excess would be permitted even after 4/15 if the deferrals were made to one plan (under Rev proc 2013-12 Appendix A .04) Otherwise, it is distributed upon a distributable event and taxed in the year of distribution. 2. The distribution is subject to the 10% additional tax under IRC 72(t) unless another exception applies (like attainment of age 59 1/2) We are having the same 10% discussion in my office this week so this was a timely thread for me to jump in on

I agree, and this is why I am examining my own firm's written procedures to see if they should be revised. Would you agree then that law is pretty clear that the duty to segregate assets is not triggered until you have a DRO (not a draft or notice thereof, but an actual order, decree or judgment made pursuant to state law etc.)?