RatherBeGolfing

Agree to disagree. Some of my most enlightened and caring clients realize that their plan is probably the only savings their employees will have in addition to SS, so they limit withdrawals to death, disability, and termination of employment.

Congrats Mike!

I'll take the road where many of my plans do not include ANY loans.

Yea I see more plans (and platforms FWIW) that will not allow loans to be rolled over than plans that will accept loans. It probably would have been nice to at least get the opportunity to pay it off with with outside money rather than trigger a taxable event and a 10% penalty though...

The end result would be the same as an offset. Both taxable and subject to the 10% penalty

Hi Angie, It sounds like what happened here is what is known as a loan offset. The loan has been repaid by a reduction of your vested account balance. This offset is treated like an actual distribution from your account, which means that it is included in your gross income. If you take a distribution prior to attaining age 59 1/2, a 10% penalty may apply for an "early distribution". Since the offset is treated as a distribution, and you are not yet 59 1/2 (my assumption based on the original post), you owe a 10% penalty on the offset amount. I hope that helps.

I have plenty of pooled plans in the 25-30 participant range. Investment committee is normally the owner(s) who in turn gets an investment adviser to handle the investments. I never recommend that an owner to actually make the investment decisions, but they do pick the investment adviser. One of the goals (or at least my goals) is to get participants and owners as far away from making investment decisions as possible.

No, you will be fine. If you file it without marking it as the initial return they will come knocking for sure though...

The plan has to have an amendment procedure, look at your base plan docuement. I doubt the amendment procedure says that the vendor has to produce it or that it has to be typed. That said, I'm not 100% sure that crossing out an option and signing in the margins of the document is necessarily a valid amendment either. We are even further removed from amendment by resolution that ETA mentions above. I would also look for a new service provider as they are clearly not meeting the needs of the sponsor.

We didn't get any darkness here in Tampa but the temperature drop was noticeable, which was pretty neat. Only 7 years to go for the next one, I think I'm going to stock up on solar eclipse glasses around 2020...

We will only get the partial down here in Florida, but my daughters school decided that today would be a good day for early release so that kids could enjoy the eclipse. She has been geeking out and researching all weekend. As a side note, I wonder if the DOL would object to investing pension assets in solar eclipse glasses... I saw them selling at $400 for a 10 pack on amazon last week which would be one hell of a rate of return for some flimsy cardboard glasses

I agree, employee would have the 6 required months on the rehire date because of service spanning rules, and the next entry date is 7/1/16.

or Turbotax et al...

The self help websites and software haven't exactly gone without controversy. Legalzoom has been challenged in several jurisdictions. As I understand it, the difference between Austin and a self help site is Austin would use a degree of judgment and discretion, whereas the self help sites do not. Giants like legalzoom have been able to defend themselves against the state bars, and in some cases I believe the reached rather large settlements, which would be hard to do for Austin, even though he is an international man of mystery...

100% agree. Pooled plans work great in the micro market. I do them all the time.

By that logic, you could use someone else's loan note as proof because the law doesn't specifically say it has to be YOUR loan note.

Yes, the law is inconvenient at times

I guess you could be a directed trustee but take an action that would be a fiduciary action (See OPs earlier question on education vs advice). But to rely on BICE, I think you would have to accept that you are a fiduciary but fulfill the requirements of the BICE and be exempt, I don't think it can function as a backstop while claiming that you are not a fiduciary...

Just curious, does the plan actually say deposited on a payroll basis, or allocated on a payroll basis?

There is nothing philosophical about 72(p). If you approve a a loan in excess of the costs that can qualify for a principal residency loan, you are 100% guaranteed to violate 72(p). No time machine needed.

Belgarath points to the same concern I have here. If the loan terms exceed 5 years and it does not qualify as a principal residence loan, you fail to satisfy IRC §72(p)and the consequence is a deemed distribution or VCP to correct. Whether the loan qualifies as a principal residence loan is not a needs tests like in a hardship situation, it is a best practices issue to make sure that you do not issue loans in violation of IRC §72(p) that could be detrimental to the plan and participant.

Ok so in your opinion the actual costs incident to the acquisition of a principal residence are irrelevant?

Sure, but your headaches still make for interesting discussion starters for the rest of us

So you approve loans amortized over more than 5 years based on what?

I have heard tales of ink testing and carbon dating paper to catch back dating, but I don't know how much truth there is to that. I had a conversation with someone at a conference once who jokingly said that it might be a good idea to save and label paper each year so that you would have the correct paper for the whatever document you may need in the future...