RatherBeGolfing

Like @Bird, we are holding off until we know more. No amendment no distribution ?

This. Im surprised to hear the RK proposing to fix it with negative contributions, they usually resist creative accounting fixes, for good reason...

"B" is the correct answer, but for the 2018 SSA, not the 2017 SSA, unless you code it as voluntarily reported on line Line 6b. "A" is only used for participants who have not been previously reported. "D" is for participants who have been paid out (or started receiving benefits) after being reported as an "A" "B" is used to modify previously reported information, so for example, you could use it to change the vested balance reported as an "A", or to update the status of a participant previously reported as paid out or receiving benefits as a "D". It makes more sense when you also consider the annuity and payment codes. When the participant was first reported as a "D", it should have been with a payment code other than A (lumpsum) to reflect the frequency of payments. Now that the payments have ceased in 2017, it will be reported as a "B" with a payment code A to reflect the lumpsum and annuity code A to reflect single sum. With all that in mind, I don't think there are any consequences for reporting the participant as an "A" rather than a "B", and we know they will screw it up anyway ?

Some are hesitant to do anything document related without a formal amendment from their document provider, even if they could operate in good faith based on the proposed regs. As a more general observation, a lot of folks don't even want to get into the details of rules and regs until they are final. I think its partly the PITA aspect, but also that some are simply uncomfortable stepping outside clearly drawn lines.

My document says that the PA shall correct such excess pursuant to the procedures outlined under EPCRS. My guess is that most documents address it in some way

Yea you are missing something big. I don't know where you get the idea that the loans are secured by other participants balances. That is not how it works, and that is not what was discussed above...

If its a write in ("other") section of the document, I would probably insist on a determination letter. I would not do via an administrative procedure if the document clearly allows for both without restrictions.

Why violate the rules instead of fixing the internal process like you are supposed to?

The Maximum loan is the lesser of $50,000 or 50% of the vested balance. If the vested balance is less than $100,000, the maximum available loan will be less than $50,000 The IRS issued this memo back in July of 2017 in regards to the computation of the maximum loan amount under IRC § 72(p)(2)(A). In the memo, the IRS says that a plan could determine that the highest outstanding balance is could be either the highest balance at one point during the year or a total of all loans during the year. So, both $32,000 and $46,000 are acceptable as "the highest outstanding balance". While it is up to the plan to make the determination, most recordkeepers will probably insist on THEIR determination rather than yours depending on how their system is set up.

Where does you current understanding come from? The 5500 will have small changes from year to year but the proposed overhaul went nowhere, it simply wasnt a priority item. The IRS tried to add compliance questions to the existing form after the proposed changes stalled, and even that went nowhere.

Aaaaaaaaaaand that is why I don't eat pumpkin ?

The proposed changes have were put on ice. There are other priorities and no funding has been allocated to take on major Form 5500 changes. If and when such funding actually happens, we can probably expect an implementation date of at least 2 years further down the road. Don't expect major changes anytime soon.

I think RESA would let you adopt a new plan as late as the extended tax return due date with a 4% SH, so I would assume an existing plan could amend to add safe harbor at the same time. Did the house bill limit it to amending existing plans or would you be able to adopt a new plan after the end of the year? From what I understand they will be pushing hard on RESA because it is legacy legislation for Hatch but who knows what the next week will bring

Thanks all! Termination notices went out to SIMPLE IRA participants today.

Perfect! That was the solution I wanted but it almost sounded to simple to work :)

Prospective client started SIMPLE IRA in early 2018, but wants to start a 401(k) plan for 2019. The problem we are faced with is the 2 year rule for distributions from the SIMPLE. Can they start the 401(k) for 2019, cease contributions to the SIMPLE as of 12/31/2018, and just not terminate it until the 2 year clock has run on the contributions to the SIMPLE?

Yea I would take issue with this. Looking past the discrimination issue, how is this fee structure reasonable? I would be worried about potential litigation.

But the TPA is not a group or association of employers, it is just an employer. If you had a TPA association, you could sponsor a MEP for TPAs. If you had an Alaska Chamber of commerce, you could sponsor a MEP for members of that chamber of commerce. Region is a commonality of interest under the reg, but the region has to be the commonality for the group or association. Being a service provider and having only regional clients is not a group or association of employers.

The quoted section is only one of the requirements. You still need to be a group or association with a commonality of interest. For example, location could be a commonality of interest, so a local chamber of commerce could sponsor a MEP under the proposed regs. Trade/industry/profession is commonality of interest, so an association like ASPPA could sponsor a MEP under the proposed regs. The concept of Pooled Employer Plans where all you need is one employer sponsoring the MEP and agreeing to be the Pooled Plan Provider is not considered in the proposed regs since the proposed regs have to follow existing legislation. The are basically just expanding the concept of commonality of interest. Since the TPA is not a group or association of employers, its a non starter under the proposed regs.

No. The TPA would not be a bona fide "group or association of employers". The proposed reg does not cover open MEPs or PEPs

Many of my pooled plans treat loans as an pooled investment rather than a directed investment. Its certainly not rare, but overall it is less common.

If they dont like it, then no loans from the plan. Now that would be heaven... Less than prime +1 would probably be an issue on audit. At least they would would ask you to justify the rate, and "the client wanted it" wont cut it. *EDIT loans not land...

Most AAs can accommodate "other" exclusions Plan A excludes M-Z Plan B excludes A-L You can split any way that is reasonable, but this way has less opportunity for participants moving from plan to plan.

Tom is correct. It's an EZ.

I don't think its idyllic to know your limitations and stay within them. Rather than getting into something that is beyond your scope (and a potential minefield for both you and the client), why not play to your strengths and find a solution that you know you can handle and handle well? I seriously doubt that the RK savings of a 2 plan MEP will be so significant that other solutions can't be considered. Take Larry's example of splitting the plan to avoid audits for example. If additional cost is a concern because you are creating another plan, you can probably drop your fees to stay competitive (after all, the two plans are mirrors of each other).