RatherBeGolfing

What system do you use for annual admin? FTW had the required illustration available prior to the October 15, 2021 deadline, you just needed to elect to include or exclude it from the benefit statement. I assumed all the major providers would have it available by now.

The balance required to be reflected on the statement is the same balance that was required prior to SECURE. The only change is that the 6/30/2022 has to include the illustration as well.

Same here.

Late to the party but they did this last year as well. I responded to a handful at my old firm last year and we have received more than that this year. We did confirm last year that the email is legit and that it does not preclude you from filing DFVCP. When I spoke to the DOL last year they said that they basically compared the returns they expected to see to the the returns that were actually filed. In some cases the returns were filed after Oct 15 but well before other extensions like disaster extensions. We calculated that the DOLs "filed" list was pulled 3-4 weeks after October 15. I hope that helps anyone still scratching their head on this.

I'm not 100% confident either. That said, I have never seen someone include it, and I have read writings from other benefits practitioners and CPAs, but without a citation I could hang my hat on. What makes it more complicated is that my understanding is that it is only treated this way if its within a 125 plan. Otherwise, its included but deductible. Which is obviously different than excluded. I think we need @Ilene Ferenczy or @S Derrin Watson to chime in and set us straight

I think that the contributions are treated the same way as employer funded premiums for group health insurance. Its paid for by the employer and it isn't considered income to the employee.

I'll just add that in a case like this, I believe it should be filed as a superseding return rather than an amended return. A superseding return can be filed after the first filing but before the due date (as extended). A superseding return will be considered the first return except for the SOL on assessments and refund claims, which start with the superseded return. It gets more technical, but I think the gist of it is that a superseding return will be treated as the original return, whereas an amended return changes something that was filed in the original return. Im not sure that it makes a big difference in this situation, but a superseding return can change things that an amending return cant.

Yep, the retro plans under SECURE have been great for flexibility.

You are correct, when you allocate the employer contributions, you will re-characterize the $1,040 to catch-up. What software are you using? I'm not a fan of overrides, most systems will either re-characterize it for you or have a function you would use to trigger it yourself.

Corrective distributions - 8E

$92,000, the 2% shareholder medical insurance is comp for plan purposes. That's the short answer. We have gone over the long answer a few times on here before, but it's been a while.

Yes. Yes, you cannot make any employee contributions in excess of compensation. Think of it this way, when compensation is paid, you can either put the cash in your pocket or contribute it to the plan. You cant contribute more money to the plan than you could have put in your pocket.

Maybe I'm not reading the question the way meant it, but you cant defer compensation you don't have. If you have $20,000 in compensation, you cannot defer more than $20,000 under any scenario. I think that what you are really referring to is whether you can contribute catch-up in excess of the annual additions limit in 415(c), which is the lesser of $61,000 or 100% of compensation for 2022. Catch-up contributions are not considered for annual additions, so it is possible to have total contributions in excess of the annual additions limit, and total contributions in excess of compensation. What your scenario is missing is employer contributions. For example: Does that help?

I don't necessarily disagree, I think you can do that with an expense as well. In that situation though, Wouldn't you show $0 net assets and 0 participants at EOY 2021? The issue I'm having here is reporting no participants at EOY2021/BOY2022 while also reporting assets. If they get a 2021 1099-R, how do you report the same assets as still part of the trust BOY2022? I assume the reasoning for the 2021 1099-R is constructive receipt, but in that case I think you need to accrue the distribution in 2021. Otherwise you are reporting participants based on accrual and assets based on cash on the 5500, while also reporting assets based on accrual on the 1099-R.

Why? If there are assets at BOY there should be a participant (or several) at BOY, no?

Its not impossible, but its not easy either. You just have to hit redial until you get a spot in line. I've seen this issue a lot the last few years. If you have a lot of clients getting these notices, ask the IRS if you can send electronic media to cover all them instead of one-by-one. You would put certain information on a flashdrive and mail it to the IRS. Protip: An IRS rep told me to attach an "other attachment" stating that you are filing under a disaster extension, preferably with a copy of the applicable extension announcement. Doing so should bring extra attention to the filing and avoid slipping through the cracks like this.

The DRO was rejected as not qualified, with a instructions to re-draft the order to complete the missing parts and clarify that the plan will not pay participant through the QDRO, only the AP. Thanks everyone. I appreciate your thoughts and insights.

Yea that is what I'm thinking too, but at this point Im annoyed at the whoever drafted the lazy DRO (and the judge for signing it...), so I think I make them fix it first.

DRO itself does not contain any of the relevant information, instead it just incorporates the marital settlement agreement by reference. The MSA states that the AP is entitled to 50% of the marital portion of Ps account. It also says that through the DRO, P is to receive $20,000 from APs share of the marital portion. In this case, the AP will be entitled to something like $50,000 from Ps retirement account, but per the MSA, the DRO is supposed to both divide the marital portion and direct payment of $20,000 of APs share to the participant.

This is a new one for me. Short DRO incorporates the much longer Marital Settlement Agreement by reference. The MSA awards 50% of the funds accrued from date of marriage to date of the divorce, adjusted for earnings (marital portion). The MSA further states that Participant shall receive $20,000 from APs share of the marital portion of Participant's retirement account by virtue of the same DRO that divides the marital portion. I may be grumpy due to the lazy DRO which made me go through the MSA to find the relevant language, but this doesn't sound right to me. If AP has agreed to pay P $20,000 from APs share of the marital portion, P can use the MSA to enforce that agreement. It shouldn't be the plans responsibility to pay P from P's retirement account using a DRO that assigns the benefit to the AP but with part of the award payable to P. Am I missing something here?

Its rare, but it happens.

Its been a while, but I have contacted the entities division at IRS in the past. I don't have the number available, but I believe you fax them with a request to change the PN, with an explanation, and they fix it in their records for multiple years. I had to do it for several clients after the IRS took it upon themselves to change the PN for several of my plans in 2014 or 2015.

I think it's pretty clear. Based on OPs question, he turned 70 1/2 in 2019 while he was a 5% owner. He was a 5% owner in the plan year ending in the calendar year he turned 70 1/2, which means he takes RMDs as a 5% owner. The fact that the 2020 RMD was waived, and that he sold his ownership interest, is immaterial. He is due an RMD for 2021 as a 5% owner, you cant unring that bell.

No citations handy, but I just looked at it this morning, and after some cross referencing: 5% owner on any day of the plan year that ends in the calendar year in which the employee turns 70 1/2 or 72

Salary is going to depend more on the TPA, the location, their specific needs, etc. There is a demand for employees at the moment, so that is in your favor. We pay for our employees credentialing, conferences, etc. 4 year break may not be a big deal, it all depends on the position. Your H4 visa could be an issue, especially for a smaller TPA. Since the H1B is temporary by definition, some will be cautious to make an investment (time and money) for an employee that is only eligible to work for a limited period. If you are early in your first 3 year cycle, it would probably give you a better shot. Good luck!