Larry Starr

Agree with Rather Be Golfing; but there was nothing that led us to believe that he didn't have MUCH more than $100k in his account. So, assuming that case, it should be obvious that he gets a check for $100k, his account is dinged for $50 in addition, and his 1099R will reflect the amount of the distribution to the participant, which is the aforementioned $100k only.

It is interesting; I wonder if it can be charged that requiring a notarization on non-required item could be considered interference with the participant's ERISA rights? Never considered asking for such, but I can see that there could be some use to that, particularly in large companies.

The Forbes article noted is deficient in its explanation of what items make up payroll. I don't know how they could include health insurance premiums (correct) but completely ignore retirement contributions. Something as fundamental as that makes me not use such a piece for "third party" info. FWIW.

One last try: I'm saying the OP CAN'T make that statement because it is impossible to know. You are hanging your hat on that. That's our difference.

We agree as to those who can meet the 100% in the 8 weeks. If you can't, we are also waiting for guidance whether you can use the 24 weeks and submit after, say, only 12 weeks if you are now at 100%. There is also the issue of the June 30 date for FTE recovery moving to 12/31; that is being looked at for some sort of modification since what if you are a season employer (think of a restaurant on the Cape) and on 12/31 you never have many employees but you had everybody working over the summer. Stay tuned for 40 more pages of "guidance" tomorrow (they have typically drop the loan on us on Friday afternoons). Why not screw up our weekend AGAIN!

We believe that the 24 week period will make the vast majority of PPP recipients 100% whole with just payroll over the 24 weeks. There will of course be exceptions, but just if we get 24/52 of $100k ($46,153) forgiveness for the highly compensated who only received 1/12 x $100k x 2.5 ($20k), we look to be exceeding 100% of the loan with compensation alone in the 24 week period. Retirement money and health insurance and even rent and utilities will not often be needed to qualify for 100% forgiveness. We are still waiting for SBA to bless the 24/52 calculation as appropriate now.

Bless you my son....

1) There was no CRD when the anaticipanted RMD was made; now, there is no RMD so what is this thing? Participant is free to determine he has received a CRD; no way the employer can say otherwise. "Are you eligible for a CRD? Yes I am". fini 2) Hardship is factual for which there is documentation: is there a purchase and sale agreement for the home? Medical expenses runs into HIPAA issues, but nonetheless, there is an insurance company statement to prove how much was reimbursed. Proof exists, but not for a negative. 3) Why am I taking it to the extreme and you are not? We have a difference of opinion; I won't call you stupid for your stubborn insistence that this solution is not available to the participant when it absolutely is.

That's fine if you would like to claim that difference; I'll work around it! ? But as to the employer, I'll say it one last time, it is IMPOSSIBLE to prove a negative, and what has to be PROVEN is that he KNOWS that the individual is NOT eligible. "Mr. PA, you can state without a doubt that you KNOW Mr. Participant does not meet any conditions for a CRD determination?" I suggest the answer can NEVER be yes. I'd be happy to be the PAs expert witness on this.

There is no way you can know that they are NOT eligible unless they determine they are not (currently) eligible and tell you. And that status can change five minutes later to eligible, which is why you throw it back to them and give them the information they need to deal with it. Separately: we can discover NO REASON for why they extended the payback for all RMDs that occured AFTER January; I think the IRS has something against January!

Nothing in your items 1, 2 or 3 that I would disagree with, except that I would say for number 2 "If they DO NOT APPEAR to be a qualified individual", since I don't think you can prove a negative, which is what would be required to state he is NOT a qualified individual.

I don't hold caution against anyone; that is your absolute freedom. Semantics? I'd say arguing that solution and workaround are not close enough to have the same effect in this case is where semantics are being applied. I have no problem using "solution" instead of workaround if that would make you happy! We can agree there. The suggestion is to give the participant the necessary information for the participant to make a decision as to what he can do. Once given to the participant, it is no longer an issue for the employer as the employer does not need to make CRDs available, this January payment won't be one from the plan standpoint, but the participant now has the info to decide if he's going to claim it as a CRD. That's all that's going on here.

There is absolutely NOTHING unethical about the workaround. IF the participant can claim it as a CRD, then it is a "workaround" to the problem that the distribution was made as an RMD, which doesn't exist in 2020. You may think "workaround" SCREAMS inappropriateness; it simply does not. Assuming a 3% ADP for NHCEs in a new 401(k) plan set up in November of 2019 is a "workaround", perfectly legitimate, of the normal ADP test. The HCEs can defer 5% even if no one else defers a penny in a non safe harbor plan. This is nothing more than pointing out the workaround in this situation, which is perfectly legal.

The participant is getting a distribution of $100k. If the plan dings his account for $50, the participant is STILL getting a $100k distribution. The fee is immaterial, because the participant is NOT taking a distribution of $100,050!

If the employee does not care, there is not an issue at law. State labor laws DO NOT APPLY to ERISA plans; they apply to the employer.

The only required notarization (or plan admin witnessing) is for spousal consent. BTW, I am a notary in MA and will not be doing any remote notarizations. The MA rules to do so are much too onerous (like mandatory maintenance of the video of the session for TEN years).

As I stated in another thread (edited for continuity): The PA can ask that the participant re-examine his situation, give him a CRD form that shows the conditions (as of now) that are necessary, and then asks the participant to self-certify, which only requires a statement that says "I certify that I am eligible for a CRD"; no reason is required. The employee can certainly have a change in his situation that now would qualify him. And again, all he has to do is self-certify. Understand?

I would suggest that it is IMPOSSIBLE for the plan administrator to KNOW that the participant does not qualify. Maybe her wife was diagnosed but they don't want to broadcast that. Lot's of other possibilities that it is impossible for the PA to KNOW for sure. How can the PA KNOW that the test used to verify CORVID was a CDC approved test; I'm quite sure the participant has no idea what test was used and whether it was approved. Therefore, the self-certification of the participant is going to be adequate. Practically, it is never going to be challenged to the plan by the IRS. Perhaps IRS might challenge the individual tax return, but I frankly don't think that will happen. I also think we will get more guidance from IRS of what will qualify under the additional conditions, and my betting is that almost everyone in the country will qualify once they announce their "additional" conditions. FWIW.

You haven't missed anything; nothing has been done about the January distributions at this point. There is a solution. Have the participant self-certify that it is a coronavirus related distribution and they have 3 years to put it back. This can be done even if the plan itself does not adopt CRD provisions.

Huh? You have stated the rules precisely above; entry is on 1/1/ or 7/1 following. So why are you asking about February (though you didn't tell us which February, neither of which make any sense whether Feb 2020 or Feb 2021)? Who cares what the participants "wants"; the plan rules apply to everyone. If he is eligible, say, today (June 9. 2020) then he enters the plan on 7/1/20. What is the real question here?

You are not going to get answers you can depend on here. You need to work with the attorneys to figure out what is going on. I should also point out that attorneys that require the two spouses to sign the QDRO are making requirements that are not in the law. ONLY if the judge mandates that (and some have done so) should it be included. The law does not require participant agreement; only that the order properly reflects the judges decision, whether the participants agree or not. A participant saying "I'm not going to sign that thing" should never defeat the ability to have a valid QDRO approved by the court and executed by the plan.

I agree with your recommendation. Again, have the employer ASK if the employee wants the extra $500 taken out, and if so, INCREASE the deduction for the one payroll by $500 (with the appropriate employee election). Now there is no issue; revert back to only $500 per payroll after the one check for $1000.

Thank you; I looked several times and just could not find that! Old eyes? And actually, for anyone who cares to check, Excess Allocation is immediately prior to the definition of Excess Amount (they are alphabetical after all) and it's on page 20. I will copy the definition below, but I think it justified what I said: that this error is NOT an excess amount so this fix does not apply. (a) Excess Amount. The term "Excess Amount" means a Qualification Failure due to a contribution, allocation, or similar credit that is made on behalf of a participant or beneficiary to a plan in excess of the maximum amount permitted to be contributed, allocated, or credited on behalf of the participant or beneficiary under the terms of the plan or that exceeds a limitation on contributions or allocations provided in the Code or regulations. Excess Amounts include: (i) an elective deferral or after-tax employee contribution that is in excess of the maximum contribution under the plan; (ii) an elective deferral or after-tax employee contribution made in excess of the limitation under § 415; (iii) an elective deferral in excess of the limitation of § 402(g); (iv) an excess contribution or excess aggregate contribution under § 401(k) or (m); (v) an elective deferral or after-tax employee contribution that is made with respect to compensation in excess of the limitation of § 401(a)(17); and (vi) any other employer contribution that exceeds a limitation under § 401(m) (but only with respect to the forfeiture of nonvested matching contributions that are excess aggregate contributions), 411(a)(3)(G), or 415, or that is made with respect to compensation in excess of the limitation under § 401(a)(17).

It is now absolutely clear that it is PAID OR INCURRED.

Does the participant WANT the extra $500 taken out? Please see my other response immediately above (I think).