RatherBeGolfing

My concerns are similar to @justanotheradmin... Do the sources have the same restrictions? Otherwise I wonder if it could create a distribution disguised as a loan kind of situation, similar to taking a loan with no intention to repay... If I have $10,000 PS and $10,000 401(k) In service is allowed at Age 50 for PS and 59 1/2 for 401(k) P is 52, and takes a loan of $10,000, split evenly over PS and 401(k) P then transfers $5,000 loan "investment" from PS to 401(k) in exchange for $5,000 cash P then takes an in-service from PS of $10,000, leaving the account with $5,000 cash P then defaults on loan obligation to 401(k) Is it different if P is 62 and could take an in-service from both sources?

Tom, I hope daily Mass and baking brings you peace and happiness. God Bless!

There are several good articles out there on the impact of both Windsor and Obergefell. I have read a few in Journal of Pension Benefits. I don't think I have read one that focuses on domestic partnerships, but many discuss the issue. My AA has it as an to treat domestic partner as a spouse in the beneficiary section. I do not remember anything about stepchildren in the BPD.

You would think so but it is current, I checked it after reading this thread. My document has an option to treat domestic partners as a spouse for death benefits, but caveat's it with "to the extent applicable".

I think it is because of a 2018 GAO recommendation that the IRS review taxation issues involving uncashed checks and clarify for the public what the IRC requirements are (See P. 84 of the attachment). GAO_18-19.pdf

I was told by one vendor that they made the change after the DOL changed its model notice (https://www.dol.gov/sites/dolgov/files/EBSA/employers-and-advisers/plan-administration-and-compliance/model-sar-language-iqpa-audit-waiver.docx). I know another vendor made its change after receiving word from EFAST that it should be changed. I have not heard anyone mention confirmation directly from the DOL. I think it is one of those situations where if you ask the DOL whether you have to include the PRA statement on their model notice, their answer is "this is where you can find our model notice, but there is no requirement that you use the model notice provided".

100% agree. My point is that most practitioners that use vendors to produce documents, including forms and notices, count on some sort of reliance on the product. I'm not saying the notice would be non-compliant without the PRA statement, just that the vendor probably wont back you up if you do. The reason so many vendors updates their notice was because the DOL updated their model notice. Personally, it's not enough of an inconvenience to go change the vendor generated notice.

The DOL model SAR DOES have it. There is no requirement that you have to use the model notice, you can use any notice you want as long as it is compliant. I think most vendors use the model notice for the simple reason that they know it is enough to satisfy the DOL. If you want to rely on what you get from the vendor, use it as provided. I don't think its a bigger mystery than that. You could always print two sided ?‍♂️

No. The DOL wants the the statement included on the model notice. Most vendors starting including the change in June. As I understand it, software providers that work with EFAST on forms and notices received word that if the model notice is used it needs to include the statement, but SARs that had already been issued did not need to be reissued. Of course, you could always volunteer to be our benefitslink test case.... If you take the statement off your SAR and the DOL does not kick your door idown by December 31 we should all be good to go ???

Thanks all. I have come to my senses and will move forward accordingly, along with a recommendation to amend the plan and loan policy to treat future loans as a segregated investment.

No worries I appreciate the discussion because I'm really not sure I'm looking st it the right way either. I'm leaning towards my initial view being wrong. I'm ok doing it either way, I just want to have a some backup for how I do it.

Unfortunately it is not very specific. Is it? He gets pooled earnings (including his share of the loan interest) on the amount still in the plan. If he gets earnings on the full $100k, isn't he benefiting more than everyone else? In simple numbers: $1,000,000 in the plan P takes out $50,000 $950,000 in the plan. The $950,000 has earnings of $101,000 ($1,000 loan interest) P gets a pro rata share of $101,000 based on $100,000 account balance rather than his share of the assets that are actually invested. Doesn't this mean that everyone else is getting less earnings in the plan while he has both the loan and earnings on the non-existing loan assets in the trust? Like I said, its one of those days when things are not making sense to me.

See this is why I'm questioning myself... Each time I see it clearly another issue muddies the water. #1 does not get him close to the earnings on loan. Is it harming him? Im not sure. He gets the benefit of the loan and the interest replaces what the money in the loan can't earn outside of the trust. #2 gets him the benefit of the loan and full earnings on the $100k account balance even though half of is not in the trust. The practical ramification of #1 is that the participant with the loan receives earnings on his share of the assets still in the plan, and does not get the extra benefit of replacing the earnings lost by taking the money by adding the interest payment.

I think the long week is getting to me because I keep questioning whether I'm looking at this correctly. Any input greatly appreciated Plan has pooled/trustee directed investments Participant loans are allowed loans are NOT treated as a segregated investment Im looking at the mechanics of the loan itself rather than fiduciary issues, but there is some disagreement in my office and this is one of those days where I would gladly take a coffee-IV. The way Im looking at it, it is still a participant loan secured by the participant's balance. The loan interest is credited to the plan trust as a whole rather than back to the participant account. Bud Weiser has a $100,000 account balance and borrows $50,000. for 2018, Mr Weiser has repaid $10,000, $1,000 of which was interest. Before Mr Weisers account is credited for 2018 earnings, his 12/31/2018 balance is still $100,000, $59,000 in pooled investments and $41,000 as a participant loan. The $1,000 Mr. Weiser paid as loan interest is added to the plan trust gain/loss to be allocated among pro rata for all participant ending balances Mr Weiser's share of the pro rata investment earnings is limited to the $59,000 that is part of the pooled investments The opposing view is that the trust made the $50,000 to the participant as an investment, and it did not actually come from the participants account balance. The 12/31/2018 balance for Mr. Weiser is $100,000 before it is adjusted for earnings The loan should be tracked separately from Mr. Weiser's account balance in the plan Am I crazy, or is the opposing view describing an extension of credit (secured by plan participant assets?) as a plan investment rather than a participant loan? Thanks J

Would you mind expanding on that? I agree the assets are not excludable under ERISA since it is not an employee benefit plan under ERISA. But are there not still protections as long as the plan is qualified, both federal (at least I thought so) and state. Most states have language to offer protection as long as the plan is qualified. The argument here is that the plan is not covered by ERISA, and because it is not covered by ERISA it cannot be qualified, therefore the assets have to be included in the bankruptcy.

Which trustee argument is correct? That the plans are not covered by ERISA? That the plans are not qualified because they are not covered by ERISA? That assets in a one participant plan are fair game in a bankruptcy simply because it not covered by ERISA? Im not expert when it comes to bankruptcy but my understanding was as long as the plan was otherwise qualified, the assets were still protected.

Holly is awesome, she did our first demo with them back in 08 or 09 i think. Overall FTW has always been responsive when it comes to adding features or functions.

Thanks Bill. We have quite a few balance forward plans that DTS would work well for, and I like the integration with the other FTW modules like 1099 and compliance. I REALLY like that we can use the DTS user forms to autocomplete forms for different platforms like JH and American funds, because then I only have to teach someone one system in order for them to deal with distributions from multiple platforms

Which is why the "not covered by ERISA, therefore not qualified" was an amusingly lazy argument (for those of us who don't have to deal with this particular case...)

Has anyone used FT Williams Distribution Tracking Software (DTS)? It has some features that look very appealing but I'm wondering how much time you spent setting it up and if you have had success getting clients to use it to initiate and sign off on distribution and loan requests. Thanks.

Its actually not that difficult. I think people just assume it is because its the IRS

Can you point to anything that supports the deduction of a current contribution in a future year, other than a contribution in excess of the 25% limit?

Yea I usually do mine at least a month before due date as well. I know a few firms that do them in February Hectic must have been an industry trend this year. I got caught up in a merger and ended up filing extensions the week of July 31 for the first time in many years

Yes. I generally wait at least 4 weeks between the 5558 and 5500. Its just a PITA to deal with incorrect "late 5500" notices when you can just delay the filing.

They are two separate issues. There is still a loan failure because the loan payments were not made. The Employer caused the failure but could correct it under VCP. The failure to timely remit would also need to be corrected.