Larry Starr

You have gotten good responses previously, but I just want to state it unequivocally that this employer is WRONG in what they are doing regardless of whether mailing or receipt is the answer. They need to stop thinking about this 7/8 day window. There is no doubt they can get the check in earlier; we don't even talk to clients about the "8 day rule". They are told they need to get the money on its way the same day they do the payroll (or maybe a day or two later, but that's it). Anything else is a recipe for a problem.

I agree with the answer; spousal consent needed if the plan provides J&S as the normal form, as I do in my plans. The quick reason is that, otherwise, you are disinheriting the children of a prior marriage because in order to NOT have the J&S provision, the spouse MUST be the death benefit beneficiary for 100% of the account, instead of just 50% if there are J&S provisions in the plan.

Actually, that is you only choice; I don't see any other.

He's eligible 1/1/20 (not sure why you say 1/2/20). Anyway, the plain reading is that he has 60 days (counted from 1/1/ or the prior 12/31, but frankly, who cares?) to make his election. He doesn't have to make it in advance of his eligibility. Is that better?

Huh? No WHAT? I agreed with the long statement you made that I quoted. And I added "that old DRO was NEVER a QDRO and can't be one". That is true; it required a distribution that was not offered by the plan, so it failed to meet the statutory requirements for a QDRO. What do you disagree with?

Your understanding is not correct. If the participant met the 2018 and 2019 compensation threshold, which he did, and he is EXPECTED to earn over $5k in 2020, he is eligible for 2020 AS OF 1/1/20, not 12/31/20. A SIMPLE is basically a "two year prior" test of $5k. Normally, that is all that is necessary but if you know an employee has turned in his resignation on 12/15/2019 effective January 15, 2020, you can avoid having him in the plan, but that kind of situation will be a rarity.

I agree; that old DRO was NEVER a QDRO and can't be one. A new proper DB QDRO will be required if the parties want to or intended to divide that benefit.

I wasn't paying close attention to the webinar, so I didn't catch that statement. I believe you are NOT mistaken. A sole prop can set u a SIMPLE if desired (to the best of my knowledge).

Almost definitely those funds contributed in 2019 BELONG to the participants in that year, and there is nothing you can do but allocate it in accordance with the plan document. To NOT allocate it would involve violation of their ERISA rights and subject the fiduciaries to personal liability to the participants.

Yes, commissions are different than hourly/salary compensation, so it may be ok. However, you can call your local state department of labor and they more than likely will be able to provide you appropriate information.

All of this estimating is fine and we all do it; that was not the question that was asked. The question that was asked was "they want to know now how much HCEs can put away in 2020 in order to pass the test" and that is unknowable until the year has ended. Estimating is all that can be done, but I believe ratherbereading knows that, so that is why I asked "what is the real question here".

The union rep has no business giving advice on the non-union plan; he is obviously wrong. Correction will be required. You don't need to give advice on the union plan; that's the union's job. While I would be interested in knowing what the union plan says, if you aren't administering it, it's not your responsibility to interpret. However, I would ask the employer to ask for a copy of the plan (he's entitled) and I would check it just so that employer will know the correct answer for his employee who has switched.

More than likely, the "shop steward" is wrong (because shop stewards are ALWAYS wrong!). At the time he moved into an excluded class in the non-union plan, he most likely was NO LONGER ELIGIBLE to defer into that plan! That is probably one error that needs to be fixed. Of course, do read the FINE document to make sure there is no special language that says otherwise. As to the Union Plan, what is the eligibility to enter? More than likely it includes language that handles this, and I doubt it requires one year of UNION participation (vs ANY employment with the employer) and he probably was eligible upon the transfer, but RTFD to make sure of the applicable provisions.

The question confuses me. You know they are doing current year testing, and you are asking about 2020. Since current year numbers can't be known until the year is over, you CAN'T know now how much HCEs can put away in 2020, and I assume you do know that. You CAN'T "figure it out" in advance because you CAN'T have the needed information "in advance". So, what is the real question here?

You will have 1000 hours by the time you leave (7/1), therefore you meet the requirements to move up on the vesting schedule for that year. Doesn't matter when they show it on your account, you will be entitled to the next year, which takes you to 100%.

You are paid in February; it doesn't matter for what period you are paid, but you ARE paid in February. 30 days AFTER that month end is the end of March. You are wrong and your employer is right. BUT, see my next comment. Unless you are being paid in advance for a month (which, from your posting, you are being paid IN ARREARS for the prior month), most states do not allow payment if money owed to you only once a month. Most states require no less than semi-monthly (twice a month) in arrears. You should check with a labor lawyer in your state as to whether your employer is violating labor laws in how you are being paid!

Yes, it matters. Why didn't you just include that info (did it come from a retirement plan or an IRA?) in your posting?

Two answers: first one - NO. Second one: What would be your "well worded" language in the promissory note that would eliminate this issue?

Simple; tell the client NO. It probably is even interfering with his ERISA rights. You can't condition contributions, for example, on not stealing from the company even though that makes more sense that this nonsensical request. If he really wanted to do it and you wanted to administer it (both bad choices), he needs to get a legal opinion from a competent ERISA attorney, so spend a few thousand dollars to find out the answer is still NO!

So many things wrong with asking this question here. First, you will never know when the "inevitable" market crash will occur (there have been only 11 bear markets since 1946, and the average recovery time for those to recover to a new record high was only 24 months!). Second, attempting market timing (which is what your question is all about) is a fool's errand, guaranteed to produce an abysmal rate of return compared to the actual market returns. So, I have to reject the premises of your hypothetical. As to the general question about "commitments", you need to talk to a real investment advisor (preferably, one associated with your plan if you actually have one that you are involved with) to see what, if any, restrictions are on investment movements (which is really your question; you can eliminate all the stuff about market timing a crash). You have received some other responses, and they are fine. But you really need appropriate education, and you can't get that here for the specifics of your situation. Good luck.

I forgot about him; here's a link for those who are interested:

No. Sometimes there is a very clear and simple answer, and that is the case here. I'm pretty sure we have no safe harbor plans that allow voluntary after tax contributions.

The original question dealt with 10 year payouts, so no RMDs. Yes, life insurance may very well be a possible scenario depending on what the objectives of the client are and the various possible beneficiary situations (age, health, capability to handle money, etc.). I expect, however, that we will also see insurance sold into situations where it actually makes no sense. Part of what I am working on is when should life insurance be looked at as a possible tool. It is FAR from a simple situation since there are many moving parts that are subject to change (income tax brackets are scheduled to change without an extender or made permanent by Congress; estate tax issues may come back into the issue with the possible reversion to the old estate tax rates barring change by Congress; rates of return are of course unknown and unknowable; etc.).

What's in it is satisfying someone who brings you business and if it's no big deal, why not do it if there are no legal restrictions.

Bethany, what your real question turns out to be is whether the employer can PREVENT him from stopping his salary repayments of the loan. And the answer to that is almost always NO. Almost every state has rules that prevent unauthorized salary deductions from employee paychecks (impermissible garnishment is the phrase generally applied), and employees are actually generally free to stop repayments and then the plan rules regarding default will apply. All the rest of the "stuff" in your posting appears to be inapplicable to the real issue. So your client actually has no option to allow or not allow; that is in the control of the participant.