RatherBeGolfing

No, you have to remove them with a D in the original plan and add them with a C in the second plan

FL gets 5% and CA gets 8% is fine Fl gets 0% and CA gets 8% would not be fine if everyone is in their own group because it has the same effect as an exclusion by name, which is not a reasonable classification. @Mike Preston Would a nominal allocation to FL solve the issue? FL gets $100 and CA gets 8%.

I'm not so sure that is correct, but the wording in the instructions contradict the wording on the Form 8955-SSA itself so it isn't 100% clear. The Form itself says "Code C — has previously been reported under another plan, but who will be receiving benefits from the plan listed above instead." To limit it to a plan of another sponsor doesn't make much sense since the 8955 is plan specific. Code C simply signals to SSA to transfer the previously reported benefit (a P with code A in prior years) to a new plan so that they can reference the correct plan when they send their "you may have a benefit" letter out. If the balance of a participant who has been a code A in the past is going to be paid out from plan 002 rather than 001, the participant should be a code C for 002 and a code D for 001. So no need to use code C for anyone who was not a code A in the past.

I don't think its completely clear if the participant continues to refuse the check. In that case, there is an argument to be made that that restoring the withholding is the correct approach, even if it just to make sure that the withholding and payment is done in the same year. It certainly can be done. The taxation issue has been included in a couple of the recent comment letters on missing and recalcitrant participants as well as a GAO report earlier this year so it is worth mentioning. Also note that I'm not saying its the right thing to do, only that it can be done.

That is a very good question. Probably, since their argument would likely be that they wouldn't have issued the coverage if they had known of the applicants prior bad acts.

I seriously doubt it. It wouldn't surprise me if the forms included some kind of self-certification though. Check here to certify that you have not been convicted of X or barred from serving as trustee bla bla bla

I'm not super comfortable with it but I have done an almost identical setup for one client with his ERISA atty's blessing. We treat each option as a Designated Investment Alternative. The plan information part of the disclosure isn't different from any other disclosure, we have the general information an explanation of the fees associated with the DIA and so on. The more difficult part is the investment performance related information.

Restore would mean getting the withheld taxes back from the IRS. The IRS has a process for it. In this case the payment to the participant went stale / uncashed. If he continues to not cash the payment you have a recalcitrant participant rather than a missing participant, but in the current missing participant debate the two are frequently lumped together.

If anyone is interested, we discussed the proposed changes in this thread

The proposed changes were put on ice pretty quickly due to lack of funding, and 5500 modernization is not high on the DOL priority list at the moment. From what I can recall from a Janice Wegesin session, it would likely take 2-3 years from when changes are approved so its not going to happen any time soon. Some of the changes could happen outside of the 5500 overhaul, but I haven't heard of anything specific going on right now.

Reverse was a bad term, the appropriate term would be restore, and it can definitely be done. The IRS addressed the issue back in 2003 because the PBGCs missing participants program requires the full benefit to be transferred rather than 80%. It is commonly done with missing participants but could possibly apply in this case if the participant continues to refuse to accept the check (recalcitrant rather than missing). In the current missing participant debate, some are even advancing the argument that failure to recover withheld taxes from the IRS (for a missing participant) is a possible fiduciary breach.

The loan payment is a plan asset as soon as withheld right? It is never an employer asset.

You can reverse the withheld taxes, but I don't think they want to. It sounds like their position is that the plan followed its terms and cashed him out at under $1,000 and they won't re-do that distribution to let him roll over to an IRA. Completely reasonable in my opinion.

I agree with Bird. Can you run it through VCP? Yes, but I don't think that you have to. The participant made the loan payments when they were withheld from pay. The fact that the employer did not deposit the loan payments on time is a different issue. If a participant defers $18,500 today, and the employer makes the deposit to the plan in January of 2019, were the deferrals made today or January 2019? Why is this any different? The problem will be to get the RK/admin to understand the issue and take appropriate action, that is sometimes easier said than done.

asppa 2016 annual.self employed.IRS forms.pdf asppa 2016 annual.sole prop outline..pdf these show up and work on my end. If have problems downloading them, just message me your email and I'll email you Larry's outlines

The plan can start 10/1. The SHN should be distributed within a reasonable period before the beginning of the plan year. If the plan is established on 9/25, is it reasonable to distribute the SHN 25 days before the plan was even established? Larry and Kevin are both correct. You have until 10/1 to start the plan and 30-90 day period for the SHN is when it is deemed reasonable. If you establish the plan during September and don't drag your feet on the notice, you are fine. Personally, I wouldn't rush to crank anything out. Let it take the time it takes to make sure nothing is missed. There is nothing worse than rushing something out and having come back to bite you because you overlooked something. Call FTW support and ask to speak to the document department. They have excellent people there and they are very quick to call back if they are not available.

Like during an audit?

I don't think so either. It was a proper loan at the time it was issued, with a 15 year amortization schedule. If we agree that a proper loan took place, I don't see how the plan admin can recall the loan unless the loan docs include language that addresses the issue.

I like the EO a lot more than I thought I would. We have fought the DOL for common sense regs on electronic notices and disclosures for many years, and this seems like it will finally make something happen. Updating the RMD rules and tables to reflect retirement security needs over government tax collection also makes a lot of sense. I'm ok with expanding MEPs, as long as it is done in a responsible way. It sounds like those of us involved in government affairs will have a busy winter/spring with the 180 day clock in the EO I was a little disappointed that the EO did not include anything on missing and recalcitrant participants. MEP promoters of BL, did you get what you expected out of the EO?

Executive Order on Strengthening Retirement Security in America By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows: Section 1. Policy. It shall be the policy of the Federal Government to expand access to workplace retirement plans for American workers. According to the Bureau of Labor Statistics, 23 percent of all private-sector, full-time workers lack access to a workplace retirement plan. That percentage increases to 34 percent when part-time workers are taken into account. Small businesses are less likely to offer retirement benefits. In 2017, approximately 89 percent of workers at private-sector establishments with 500 or more workers were offered a retirement plan compared to only 53 percent for workers at private-sector establishments with fewer than 100 workers. Enhancing workplace retirement plan coverage is critical to ensuring that American workers will be financially prepared to retire. Regulatory burdens and complexity can be costly and discourage employers, especially small businesses, from offering workplace retirement plans to their employees. Businesses are sensitive to the overall expense of setting up such plans. A recent survey by the Pew Charitable Trusts found that 71 percent of small- and medium-sized businesses that do not offer retirement plans were deterred from doing so by high costs; 37 percent cited high costs as their main reason for not offering such a plan. Federal agencies should revise or eliminate rules and regulations that impose unnecessary costs and burdens on businesses, especially small businesses, and that hinder formation of workplace retirement plans. Expanding access to multiple employer plans (MEPs), under which employees of different private-sector employers may participate in a single retirement plan, is an efficient way to reduce administrative costs of retirement plan establishment and maintenance and would encourage more plan formation and broader availability of workplace retirement plans, especially among small employers. Similarly, reducing the number and complexity of employee benefit plan notices and disclosures currently required would ease regulatory burdens. The costs and potential liabilities for employers and plan fiduciaries of complying with existing disclosure requirements may discourage plan formation or maintenance. Improving the effectiveness of required notices and disclosures and reducing their cost to employers promote retirement security by expanding access to workplace retirement plans. Outdated distribution mandates may also reduce plan effectiveness by forcing retirees to make excessively large withdrawals from their accounts — potentially leaving them with insufficient savings in their later years. In light of the foregoing it shall, therefore, be the policy of the Federal Government to address these problems and promote retirement security for America’s workers. Sec. 2. Improving Retirement Security. (a) Expanding access to Multiple Employer Plans and Other Retirement Plan Options. (i) The Secretary of Labor shall examine policies that would: (1) clarify and expand the circumstances under which United States employers, especially small and mid-sized businesses, may sponsor or adopt a MEP as a workplace retirement option for their employees, subject to appropriate safeguards; and (2) increase retirement security for part-time workers, sole proprietors, working owners, and other entrepreneurial workers with non-traditional employer-employee relationships by expanding their access to workplace retirement plans, including MEPs. (ii) Within 180 days of the date of this order, the Secretary of Labor shall consider, consistent with applicable law and the policy set forth in section 1 of this order, whether to issue a notice of proposed rulemaking, other guidance, or both, that would clarify when a group or association of employers or other appropriate business or organization could be an “employer” within the meaning of section 3(5) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1002(5). (b) Qualification Requirements for Multiple Employer Plans. Within 180 days of the date of this order, the Secretary of the Treasury shall consider proposing amendments to regulations or other guidance, consistent with applicable law and the policy set forth in section 1 of this order, regarding the circumstances under which a MEP may satisfy the tax qualification requirements set forth in the Internal Revenue Code of 1986, including the consequences if one or more employers that sponsored or adopted the plan fails to take one or more actions necessary to meet those requirements. The Secretary of the Treasury shall consult with the Secretary of Labor in advance of issuing any such proposed guidance, and the Secretary of Labor shall take steps to facilitate the implementation of any guidance, as appropriate and consistent with applicable law. (c) Improving the Effectiveness of and Reducing the Cost of Furnishing Required Notices and Disclosures. Within 1 year of the date of this order, the Secretary of Labor shall, in consultation with the Secretary of the Treasury, complete a review of actions that could be taken through regulation or guidance, or both, to make retirement plan disclosures required under ERISA and the Internal Revenue Code of 1986 more understandable and useful for participants and beneficiaries, while also reducing the costs and burdens they impose on employers and other plan fiduciaries responsible for their production and distribution. This review shall include an exploration of the potential for broader use of electronic delivery as a way to improve the effectiveness of disclosures and to reduce their associated costs and burdens. If the Secretary of Labor finds that action should be taken, the Secretary shall, in consultation with the Secretary of the Treasury, consider proposing appropriate regulations or guidance, consistent with applicable law and the policy set forth in section 1 of this order. (d) Updating Life Expectancy and Distribution Period Tables for Purposes of Required Minimum Distribution Rules. Within 180 days of the date of this order, the Secretary of the Treasury shall, consistent with applicable law and the policy set forth in section 1 of this order, examine the life expectancy and distribution period tables in the regulations on required minimum distributions from retirement plans (67 Fed. Reg. 18988) and determine whether they should be updated to reflect current mortality data and whether such updates should be made annually or on another periodic basis. Sec. 3. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect: (i) the authority granted by law to an executive department or agency, or the head thereof; or (ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals. (b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations. (c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person. DONALD J. TRUMP THE WHITE HOUSE, August 31, 2018.

NAPA Net article on the executive order White House factsheet on the executive order Executive Order on Strengthening Retirement Security in America Executive order directs DOL to "consider changes" to make it easier for businesses offer MEPs together. Order uses the term Association Retirement Plans so I guess they are now MEP/PEP/ARPs... Executive order also directs Treasury to review rules on RMDs so that participants can keep more money in plans and IRAs longer Executive order also directs DOL to consider ways to improve notice requirements to reduce paperwork and admin burdens. Can you say electronic disclosures?

Fee or no fee, the loan happened. Kevin beat me to it but there is clearly no exception to it in 72(p) and I don't think an auditor would agree with treating it as never happening because it clearly did. Its no different than the doctor who needs some quick liquidity and needs $50k and repays it all a week later only to come back for another $50k loan 6 months later. That the house purchase fell through after the loan was issued is immaterial. Presumably, the participant is looking for another home to buy and can use the money s/he already borrowed from the plan for the new home. The IRS has clarified (informally, but still) that if a participant takes a hardship for the purchase of a home, and the deal falls through, the hardship distribution stands. It was a proper hardship at the time of distribution, and there is no process through which the plan can accept the money even if the participant wanted to return it. I see no reason why a loan should be treated differently.

If the TPA is an ASPPA member, it would would violate the code of conduct. I believe the same is true for NIPA. As for the IRS, it is still an issue. Even if you are not a practitioner covered under 230, the IRS can still make your life difficult if they find that you are filing or assisting others with filing false returns. I can't put my finger on the exact session but the IRS did a phone forum or webinar on disciplinary actions in last year or two. I can't remember the specifics but they clearly indicated that you can't shield yourself from discipline or sanctions by not being covered under 230.

Yes I have had it happen before. I handle it the same way every time. I will not prepare or file a form with false information. The most common request is to say that there were no late deferrals. I always tell my clients what they need to do to correct the issue (and most likely I will do the correction for them) but I will not prepare or file a form with information I know to be false. If the client insists, I tell them that I am happy to recommend several good local service providers if they are not happy with my services. If they still insist, I terminate the relationship with the client in writing, citing my reasons for doing so. I have terminated a handful of clients for this reason. If Circular 230 applies (it does for me), I would point to § 10.21 (knowledge of omission) and § 10.22 (Diligence as to accuracy). The loophole of reliance on others in § 10.22 clearly can't apply if you know the information is false. What it boils down to for me is don't make your clients problems your problems.

Hi Lois, Looks great on both android google browser and BL for android after the fix. Thanks. Jim