Larry Starr

Tom's example might not exactly match the document you have -- it depends on whose software created the plan documents. But all of them should have something similar. Someone needs to say what we (the professionals on this site) are all thinking. You need to hire someone who knows what they are doing, otherwise the chances are very good that you are or will screw things up. Do you do your own dental work on you family members? You shouldn't be doing your own retirement plan administration either. You should at least have a competent firm that can be your consultant to make sure you are doing things right (though many of us would not take on a client that thinks he can do it himself). Sorry if that sounds harsh, but it is the truth. What we do is not easy and exists in a very complicated set of rules and regulations with many variations and requirements, any one of them which you can miss if you are doing this yourself. Best of luck.

Thanks, Belgrath. I decided not to take my resources with me in the North Atlantic. Left Iceland (an amazing place!) and steaming toward Norway now!

Absolutely; If the plan has decided to get rid of the insurance (an investment decision), then the plan (whether it is the trustee or PA) has the absolute right to change the investments. NO QUESTION. There's a PTE somewhere that allows the sale of the contract to the participant, or the bene, or the insured.

Correction of typo: should be:. ... and therefore COULD be rolled over (which is incorrect...).

Why are you confusing this discussion with 2017? He terminated in 2018; 2017 has never been under discussion. Did you mean 2018? If so, NO! there IS an RMD required in 2018.

Is your question actually whether Guaranteed Payments are part of net self employment income? Yes.

That is just not the issue. The participant died when he was not married and there was no DRO in existence. The PLAN benefit for the dead participant on that date is ZERO. The judge can do whatever he wants to divide up that amount, but (as Mike noted in his actuarial math!), any percentage of zero is ZERO. In your example, to make it clear, on Day 3 when the participant died, the value of the benefit was zero.

I'm traveling without resources, but there is a simple way for the contract to be distributed now. 1) Trustee borrows max cash value from plan. 2) Trustee decides it doesn't want the life insurance in the plan any more; it can surrender it OR it can sell it to the insured. 3) Trustee sells it to the insured for the reduced value left in the contract. Ex writes a check; trustee executes transfer of ownership documents. Voila!

Huh? Are you saying that the distribution in 2018 DID NOT REQUIRE an RMD and therfore could NOT be rolled over (which is incorrect, which is what I believer everyone else is saying)? I actually don't understand what jpdrews said, nor what you are saying is correct. For the record, the distribution rolled over in 2018 needed to have an RMD taken first and that RMD amount was imperishably rolled over to the IRA and must be corrected.

Gary has provided you the expert legal answer. Full disclosure: Gary is my partner in a number of books we have co-authored. HI GARY! However, based on your posting, I would guess this employer is NOT interested in doing it right and it is highly unlikely that he will do what is required. Therefore, you have practical issues to consider. The important thing is that you have been economically harmed, In fact, it appears he has stolen money from you, a probable criminal offense. So, you need to decide what YOU want out of this situation. Do you just advocate for yourself? More than likely, that is where you end up. So, after he refuses to do the right thing, you need to point out what you are willing to accept from him as a settlement to NOT pursue both ERISA violations and possible (probable?) criminal actions. You probably do need a good lawyer to help you sort this out. This is likely not going to be an easy situation. Best of luck.

Bill: as noted above, I completely agree that you must secure union agreement or you can have a problem. However, it is amazing how some unions work. Not all of them are the teamsters (who I have sat on the other side for negotiations and it generally isn't fun). Some unions are pretty casual and while they clearly could complain about an unfair labor practice, we have recommended to clients that they get approval ex-post facto of these situations and I have seen unions just say "sure". Surprising, but that does not appear all that uncommon. One comment on your note about making sure that non-collectively bargained plans exclude union employees. It is actually inappropriate to put the union exclusion language in every plan that does not cover union employees where the employer has no union (and I don't think that is what you meant but some might take it that way). Some advisors think that such a provision should go into every plan just to "discourage" union possibilities. The problem is that the "union exclusion" REQUIRES that retirement benefits had to be the subject of good faith negotiations between the employer and union reps and if there is no union, then there obviously have been no negotiation and having the union exclusion in such a plan is actually inappropriate. Just FWIW.

Who is administering a plan where loan repayments are going back into the plan with pre-tax money? In fact, those are NOT loan payments if they are deferrals. Which means you have a situation where no payments are being made and you have a potential disqualification on your hands. I'm sorry to say, but no knowledgeable admin firm would ever do this; you have to question the competence of whoever is administering the plan. I doubt the loan documentation provides for this situation, if proper loan documentation was done. This is such a fundamental error that we need to know much more about how this plan is operating to try to advise. Looks like BIG problems. And, yes, prevailing wage provisions have absolutely nothing to do with this issue.. If loan repayments are being made from untaxed/pre-taxed fringe benefit dollars, then the participant is not making any loan repayment at all since those dollars are coming from the employer. MANY MANY PROBLEMS with the partial description given.

JPOD: sounds like a perfect situation to look for specialist counsel to give you a second opinion. I think your concern is well placed and worth a second opinion form someone who can provide the needed info. FWIW. It is important enough (I would think) to look for an opinion you can count on. All our opinions would be difficult to use in court if needed!

ESOP Guy is correct. You can exclude all the usual "union" employees EXCEPT a named individual, but you do need to make sure that does not violate your collective bargaining agreement. If you want to do this, get it in writing from the union that they have no objection.

I think you are saying that HE was an owner in 2018, right (for one second)? That makes HER an owner in 2018. But her 70 1/2 year is 2019, so she''s not a 5% owner in 2019 and therefore if she continues employment does NOT have to start RMDs for her own account (that is what you are referring to, her own account, right?). The non-owner stipulation is NOT an HCE test; it is an ownership test in the 70 1/2 year. Caveat: I am traveling without resources and would normally check this answer but can't so this is from memory and I give it only a 99% chance of being correct! :-)

Then they need to hire competent counsel to advise them. For example, Derrin Watson is on this site with a forum. There are others, but if they are a lender, they need their own counsel to advise them.

Practical answer: go out to all participants in plan; provide copy of old beneficiary designation and ask them to either confirm that that should stay in force with the merger OR they fill out a new one. A separate form for them to respond to this question should be produced, and a note that if they do not reply, the prior beneficiary form will be assumed to continue in effect. You want to be pro-active in a situation like this. No need to make any assumptions without specific notice to all participants. Cost is minimal and avoidance of lawsuits is desired.

Thanks for the advice, but you might want to check how close Cape Cod is to the North Atlantic! :-)

ON the Holland American Line Koningsdam for a two week cruise. Leaving Scotland now and heading toward Iceland and then Norway.and then back to Amsterdam where we started. We are on a VIP Art Cruise with the Park West Galleries (the folks who run all the on-ship art auctions) with 130 other VIPs (their largest ever) and over $35 MILLION of amazing art! These "free cruises" tend to be very expensive! No such thing as a free lunch (or two week open bar!) is very true!

The plan owns the real estate; the plan is the OWNER. Who else should pay expenses attributed to the RE? Who would pay for a plumber to fix the pipes? It has to be the plan that pays the expense. Another reason (among the thousands!) for why RE does not belong in the plan. There are things that are legal, but stupid! We consider it out job to keep the clients from doing both! :-)

Yup! We simply will not deal with a plan that is involved in a ROBS. Let others try to solve the inevitable screw ups that are almost 100% guaranteed; we have better things to do than deal with clients who don't listen to us in the first place. FWIW.

If the plan sponsor has reason to believe she is married (and that she is lying to the employer), the sponsor has a fiduciary duty to ask for a copy of the divorce or legal separation or mandate the spousal consent. Remember, the spouse has ERISA rights that also have to be protected by the plan.

And we have to assume it is a calendar year plan and calendar year taxpayer. Scenario 1:3/15/18? for 2017? Full details ALWAYS please so we don't have to guess! Assuming above, the contribution made after the return is filed WITHOUT an extension (another assumption we have to make because you didn't tell us), then it is not deductible in 2017, only 2018. Scenario 2: Deductible in 2017 if they want to take the deduction in 2017. They can take it in 2018 if they prefer. Scenario 2: Assuming contribution made after their extended due date for the prior year, then same answer as 1; not deductible in prior year. Did I guess right on all the assumptions? If not, please give us the correcd answers and we'll try again.

Please provide more complete info. OK, it's a S corp. Is the W-2 from the S Corp? Where did the K-1 come from? Are you talking about an S distribution? If so, it isn't earned income and is ignored and only the W-2 matters. More complete info always gets better answers.

You seem to not understand how a DB plan works. Do you only deal with DC plans? If the plan pays out a benefit that someone isn't entitled to, don't you think SOMEONE has to be a loser? in this case, it is the plan itself (and the employer by proxy). Also, the plan is not subject to a local judge's order except as it applies under a QDRO since the plan is subject only to FEDERAL LAW (and the QDRO is a specifically provided exception). Any order provided to a plan to do something that is not in compliance with ERISA should be appealed to FEDERAL court and quashed. And I fear you completely miss the proper application of fiduciary status; the plan (or the PA) MUST follow the terms of the plan, not decide what is BETTER for participant (or ex-spouse) that violates the terms of the plan. Your response is simply significantly out of line with the way the law works. Sorry.