RatherBeGolfing

I agree. Compound interest is more appropriate, and something that most admin software or spreadsheet will take care of.

No. Any distribution in 2020 is a CRD if made from an eligible plan to a qualified individual, including the RMD you describe. In your example, it is a 2020 distribution from a 401(k) plan, correct? In that case, it is a CRD if the participant is a qualified individual, and can be paid back to any plan or IRA that accepts rollover contributions. If the original plan accepts rollovers, it can go back to that plan. Since it is terminating, it is possible that it will not accept a rollover. Short answer is that RMDs are waived for all plans (except defined benefit plans) for 2020. It is simply not required by law. You do not have to be a qualified individual or be affected by the virus in any way. The longer answer is that some plans may still require a distribution based on the plan document language, even if it is not required by law for 2020. These plans will be the minority though, so chances are that your plan will not require an RMD.

Yes. We are having issues with several recordkeepers processing CRDs. Its understandable since they had to develop procedures on the fly, but it is frustrating...

They sell "401(k) leads" to financial advisors. They collect the data, package it in a report, and sell it as a lead. Im sure they do some sort of review so they can say they provided a service, but their game is selling access to the plan.

I have used 23rd, but... I think it is the 22nd. The 23rd would be day 181

@Dave Baker Including a notification to Dave for this thread. I don't think it is necessarily inappropriate for a participant to come here to ask questions. Many have simple questions and just don't know who to ask or where to turn for information. I agree that it is inappropriate to try to resolve specific participant issues or lay blame on someone through the message boards. We never have all the information, and we only get one side of the problem. To that end, maybe just have Mods lock a specific thread when it gets combative and insulting, rather than not allowing questions from non-industry folks all together?

I believe they are closed down. This is one of the reasons ARA is fighting hard for the automatic extension for all plans, the service center that receives and processes the 5558 is shut down. If you really need to file, I would file it electronically on the SF with limited information as a one participant plan.

Unless I'm missing it @Peter Gulia is actually mixing his apples and oranges in the hypo. If it's a participant directed plan, and Pat takes 100% of his balance as loan, the only thing left in the plan for Pat is his loan receivable of $100,000 plus interest. There is nothing to decrease in value due to market swings. If the loan is a PLAN investment, it is a whole other animal. If you let a participant borrow 100% (let's say $100,000) and participant is laid off/defaults with a market loss that that now values his account at $75,000, the plan has a loss of $25,000 on that investment after participants account balance is used to offset. If loans are plan investments, I would heavily favor CRDs over CRLs in this economy. Let them take their balance out and pay taxes or repay over the next 3 years rather than an iffy plan investment in participants ability to repay the loan.

https://content.govdelivery.com/accounts/USPBGC/bulletins/285ef9c Follow up from PBGC

100% this.

@Ian what is it that you are trying to achieve / what is the reason for your question? Are you in the retirement industry, or are you an affected party? The answer to your question is not going to be a simple yes or no, so it will help to know how the answer the question

@EBECatty Agreed. It has also been very helpful when looking at the loan provisions. There is also a bit of a conflict between plan and individual treatment of distributions. The plan can treat a distribution to a qualified individual as a CRD, unless the aggregate distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $100,000. The Individual on the other hand, can designate any distribution as a CRD as long as the total amount does not exceed $100,000. So if I take $50,000 from my IRA (and intend to designate is as a CRD) and $100,000 from my 401(k), I can only designate $50,000 from the plan as a CRD. The plan can treat the entire $100,000 as a CRD. Should the plan's default be to treat any distribution to a qualified individual as a CRD as long as it does not exceed $100,000, or should the plan leave it up to the participant to tell the plan if less than 100% of the distribution should be treated as a CRD, and treat the remainder as normal distribution?

"any and all" is one of those old legal doublets they teach you not to use anymore. They usually mean the same or close to the same, and they want you to use the most appropriate single word instead. I'd say any refers to an unknown number. It could be one, a subset, or all. All refers to... all, or every one. If the intent was to define all repayments, they would have used all rather than any.

It says if the due date for a payment occurs between enactment and December 31, 2020, such due date shall be delayed for a year. The language is very clear. Nowhere does it say say you have until December 31 to delay Really? Where do you see "all"? Where do you see "one year delay"?

missed that part :)

Then (A) is pointless, and that is just not how statutes are drafted

That is how IRS interpreted KETRA...

JH CARES - withdrawal form.pdf John Hancock CRD form

But only if the participant is a qualified individual, right? If I don't the definition of qualified individual, I don't get tax relief. So you would still have to ask all the CD/CRD questions (regardless of plan adoption) just to figure out if 10% default or 20% required applies. If you fail to withhold when you have to, that could be an issue too.

Follow up from above... So what if I took $120,000 distribution today, from a plan that elected to not adopt CRDs. 10% default on the first $100,000 and 20% on the last $20,000?

I think you guys have changed my mind on how it applies to the participant, in other words participant tax treatment is separate from plan treatment. I'm still struggling with the withholding part though, since the plan is required to withhold. And if you don't adopt the optional CRD, I guess you would still have to amend if withholding changes applies regardless of CRDs...

It does. It means you get to add the delayed period to the remaining term and add accrued interest. This also tracks with the IRS guidance in Notice 2005-92 in regards to KETRA 103 which is pretty much identical to 2202(b)

Agreed

No. You can only treat it as a CRD if the CRD is offered by the plan. Otherwise it is just a distribution. Correction: Yes...