RatherBeGolfing
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Everything posted by RatherBeGolfing
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What if.... The ex-wife submits the divorce decree as a QDRO. It is not a QDRO, but the PA still has to determine that it isn't a QDRO, and notify all the parties and all that fun stuff. While the PA is determining that it is not a QDRO, the actual QDRO can be submitted. If you are going to deny the surviving spouse distribution, this at least creates a reason for the PA to not immediately distribute the assets which is better than "we were told they were working on a QDRO"
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I think the short answer is yes it can, but like @QDROphile says, it really depends on whether the division of assets in the divorce created a right to the ex-spouse. Even if the plan pays the full balance to the surviving spouse before receipt of the QDRO, it would be a civil matter between the ex spouse and surviving spouse. I don't see how it is any different than one spouse taking a full distribution after the division of assets but before the plan was served with a QDRO. They are taking something they know they no longer have a legal right to, even if the plan has not yet been put on notice.
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From the OP...
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Solo401k Do I need to send a form 5500ez?
RatherBeGolfing replied to Breakdown65's topic in 401(k) Plans
What Lou said. -
Solo401k Do I need to send a form 5500ez?
RatherBeGolfing replied to Breakdown65's topic in 401(k) Plans
Ok, since you didn't distribute the assets in 2017, no final form 5500-EZ is required for 2017. If you distribute the assets in 2018, a final form 5500-EZ for 2018 will be required. So Company A sponsored the 401(k) plan in 2017. Company A also closed in 2017 and you started Company B. Did Company B take over as sponsor of the 401(k) plan for Company A? Or did you actually terminate the 401(k) plan with the intent of distributing the assets (like a rollover to an IRA for example)? -
Solo401k Do I need to send a form 5500ez?
RatherBeGolfing replied to Breakdown65's topic in 401(k) Plans
If you terminated the plan and distributed the assets, you need to file a final Form 5500-EZ. Did you distribute the assets of the plan in 2017? -
That is a good point. I can imagine that there are many participants out there who would rather take a hardship than make a claim against insurance out of fear of cancellation or skyrocketing premiums. Even with an insurance claim, the deductible can be crippling.
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After you renew, you are supposed to get your renewal letter in the mail. If you haven't gotten yours, contact the IRS and ask them about it. I had to do that last cycle. If you send them an email, they are required to respond. When I have emailed them, they have called me within a few days to discuss, and then follow up with an email response to see if everything has been resolved. EPP@irs.gov
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I wouldn't bet on it being corrected anytime soon. While it was clearly an unintended consequence, fixing it does not appear to be much of a priority, or at least that is what I have been told... In the meantime, if the sponsor is really wants to get around the issue they could always amend the plan to not use the safe harbor provisions. Its not like we cant do it, we just cant do it using the safe harbor.
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Any particular reason for thinking it wouldn't be legal (or allowed)?
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They could have a company policy that allows the employee to convert the accrued vacation to cash on the condition that it is 401(k) contribution. That solves the cash/401(k) bit. But it opens a whole other can of worms since the ER can't actually enforce the "deferral", and is it even an elective deferral if its required?
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suspensions vs stopping elective contribution
RatherBeGolfing replied to thepensionmaven's topic in 401(k) Plans
As far as Im concerned, the usage of "stop" or "suspend" doesn't matter. For our purposes, both of them means deferrals cease when the participant elects to do so. As an administrative matter, I wouldn't start (or restart) deferrals until the participant enters into a new deferral agreement, so stop/suspend simply means stop at this point and nothing more. Most of my plans are drafted to allow for changes every payroll. I have a few plans that restrict it to quarterly but that is about it. If it makes sense to go with payroll period changes rather than quarterly, then amend away, but you certainly don't have to just because a participant might want it. -
They would fall under the 5500-EZ penalty relief program rather than the DFVCP, but they will now have to file a Form 5500-EZ rather than the electronic 5500-SF. The pilot program had them file the SF electronically, but the permanent program changed that to an EZ instead. Since they fall under the EZ program, they would be ineligible because they have already received the CP-283. They could still apply for relief due to reasonable cause, but I don't know how picky the IRS is with reasonable cause filings now that the penalty relief program is in place.
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As far as what the best way to prepare, the practice exam and the syllabus are your best friends. Don't assume that the practice exam material will be on the exam, but the format will. You should definitely read all the material, but focus on the learning objectives in the syllabus. If it says that a successful candidate will be able to do XYZ, it will probably be on the exam in some way. Here is what I would do since the exam is coming up fairly shortly: Answer / explain each learning objective in each chapter. You can do it on your computer or by hand, but make sure you can organize and read it. Do it in short but complete answers with bullet points if possible. Make sure all required information is included in the answer. After you are done answering all the questions/objectives, put away the book and focus on your learning objective outline. If you can answer each learning objective, you will have no problem with the exam
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suspensions vs stopping elective contribution
RatherBeGolfing replied to thepensionmaven's topic in 401(k) Plans
Yes. Yes. 100% this -
Bankruptcy protection qualified plan versus IRA
RatherBeGolfing replied to ldr's topic in 401(k) Plans
Hah I thought I was going crazy for a while... I'll admit that bankruptcy is not my specialty, but the EOB suggests that the full protection from creditors in bankruptcy is not automatic for an owner only plan. It would require the plan to be "qualified in operation", and one case cited was held to not be qualified in operation because of prohibited transactions under §4975 (that the IRS considered corrected!). -
Bankruptcy protection qualified plan versus IRA
RatherBeGolfing replied to ldr's topic in 401(k) Plans
There is an example in the EOB (CH3B - Section XI - Part B - 2.b.4)b)) where a court (Daniels v. Agin, 736 F.3d 70 (1st Cir. (Mass.)) held that a one person plan was not qualified in operation, and thereby got around bankruptcy exclusion extended to working owners in a plan that otherwise meets the definition of an employee benefit plan. It sounds like its an outlier, but following this logic it would be worse off in a one participant plan than an IRA. Thoughts? -
Bankruptcy protection qualified plan versus IRA
RatherBeGolfing replied to ldr's topic in 401(k) Plans
Other than 401(k) contributions, is there a difference between a husband and wife profit sharing plan and a "solo 401(k)"? *Edit: Looks like Larry beat me to it -
I find the DOL behavior very odd. In my experience they act fast on participant complaints. Make a complaint of your own, and like Bird said, shame them into doing their jobs if you have to.
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For document purposes, there is no problem with a mid year amendment. For safe harbor purposes, you have messed up royally.
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I thought even payroll providers knew better than to retroactively try to change the type of SH... I think Mike and Larry are correct. You are stuck with the match because you have led the participants to believe the have to contribute to get a contribution. you also have to follow the document and provide a 3% contribution, even if it blows up your safe harbor. Your document doesn't allow ADP/ACP combos at all? I could understand that it wouldn't allow both as the ADP safe harbor, but I have never seen a document that doesn't allow for a match in addition to the 3%
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You probably have contact the IRS after DFVCP since there is nowhere on the assessed penalty notice to respond with the DFVCP information like there is on the proposed penalty. But the result should be the same.
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They use this language in their current VS as well, so I talked to their document folks about it. Both of our interpretations are reasonable, but yours is more conservative. An amendment similar to what @Kevin C described could be done with the FTW document as well.
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Well, there is nothing on point because it is not a protected benefit :) what is the exact language in your current document? And I'm pretty sure FTW can accomodate this change, there is simply no reason for a provider like FTW to restrict their volume submitter like that, and I don't eve think they have a standardized document any more. After the next restatement there wont even be a prototype or VS document, just a pre approved document since there is almost no difference any more.
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Tom, I'm not reading that the same way you are. What it says (to me) is that if you are eligible on the effective date, you enter on the effective date. If you were not eligible on the effective date, you enter on the specified entry date if you are still an employee. I don't read that as not permitting changing eligibility. It really just makes the effective date a "special" entry date.
