RatherBeGolfing

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

First attachment is BL app for android, second is google browser on android.

Both the android app and android google browser looks off as well.

But the RK probably isn't a plan fiduciary in that case right? Good question. I believe they can (and do) charge for paper statements. I am 99.9% sure they cannot charge a fee for required disclosures just because the participant expressly wants a paper disclosure. I'll have to come back later to see if I can cite it...

Is this an email to a participant or to the sponsor? Not making paper available to the participant would be contrary to regulations. I could see electronic only to the SPONSOR, who would then be in charge of delivering to the participants per their instructions. ASPPA GAC has been fighting hard for opt-out rather than opt-in, but the DOL is still standing firm on paper as default.

We moved away from Relius years ago, but at the time there was a function called "Keogh salary solve" that would do it.

The loan defaults when payments are not made. That could happen because the employee requested payroll deductions to cease or because the employer failed to make loan payments (or even failed to withhold loan payments). Employer error happens all the time but the loan is still defaulted.

The program the IRS commented on is pretty interesting... Current program matches elective deferrals on a payroll by payroll basis. An elective deferral of at least 2% of pay period comp triggers a 5% of pay period comp match, deposited each pay period. The proposed program allows a participant to enroll in the student loan benefit program. Under the program, a "student loan repayment nonelective contribution" of 5% of pay period comp will be if student loan repayment of at least 2% of pay period comp is made. the SLRNE will be deposited after the end of the year. Participants may also make elective deferrals during the year but can't cant get a match for a pay period s/he receives a SLRNE for. you can get both SLRNE and match but not for the same pay period. There is a last day condition on both the SLRNE and match while in the program, and the contributions are subject to vesting. The IRS determined that the proposal to amend the Plan to provide SLR nonelective contributions under the program will not violate the “contingent benefit” prohibition of section 401(k)(4)(A) and section 1.401(k)-1(e)(6).

The participant cannot make an election to pay taxes out of assets that are not his. It doesn't matter whether he wants to withhold 10% or 100%. The plan does not have a responsibility pay it just because the participant does not have the assets left to use. Participant has $10,000 in his account. QDRO assigns $9,500 for back child support. Participant now has $500. The plan distributes $9,500 as directed by the QDRO, creating a tax liability to the participant since its a non-spouse AP. Participant wants to withhold the default 10% of the distribution, or $950. Participant only has $500 to withhold. The plan is only liable for depositing what can actually be withheld. Can the QDRO itself order less than the default? Maybe, but in my opinion it doesn't have to since the participant can only withhold from assets that are actually his.

Good question. Does it matter that there isn't enough left over for voluntary withholding? I don't think so. The QDRO orders you to pay 95% of the participant's account to a non-spouse alternate payee, leaving only 5% for the participant. The participant wants to pay 10% in taxes, but there aren't enough assets for a 10% payment. The participant is short, and will have to settle for the 5%. It is not the responsibility of the non-spouse alternate payee to make sure that the participant can satisfy tax payments with account assets.

I actually agree with your argument, but I'm not 100% that the IRS would. There is no missed deferral opportunity because the participants were not improperly excluded from making deferrals. They had just as much opportunity to defer as anyone else, they just weren't provided with the proper incentive to defer. They were improperly excluded from the match, so a missed match correction is appropriate. I can see the IRS arguing that a participant was not afforded full opportunity because they were told they would not get a match. If the correction isn't too expensive, I would consider correcting for the deferrals just to be safe.

No worries, makes sense if that is how you read the question. Maybe they will open it back up in 10-15 years when there is enough demand again.

It isn't a moot issue since current ERPAs are still ERPAs...

Form 2848. You are still limited in practice areas but getting a POA to speak to the IRS directly is a big plus for practitioners who are not an attorney, CPA/EA, or enrolled actuary.

No problem. If you are an ASPPA member there are some good asap's on 404a-5, 408b-2, and the DOL electronic disclosure policy. Just look at the archives for 2012 & 2013

Thats what I meant by the punchline. You have to meet all the requirements for electronic disclosure before you even think of directing the participant to a website. Platforms are pretty easy to work with for the notices since they put it (the annual notice) together for you. We download both the plan information part and the comparative chart and make it one pdf. We send the pdf with instructions to the clients. They deliver it to the participant either on paper or email the pdf if the electronic delivery requirements have been satisfied. The quarterly notice requirements are usually met by the platform since they add that information to their statements. We are a non-producing TPA as well.

Unless you are leaving out a bunch of steps and just giving us the punchline "A plan administrator may also send, via electronic or paper mail, a link to the required information on a website", that is not going to satisfy the requirements for electronic disclosure.