Biz Develop Consultant BJF

Recently had an advisor present a scenario where Company A (the client) has a SIMPLE IRA and planned to proceed with the Plan for 2022; however, an unplanned acquisition (believed to be stock) just occurred and Company B (acquired company) has an existing 401(k) Plan. The transition rule could cover this but the employer is asking if they could take over the 401(k) and put both Company A & Company B employees in that rather than one group in the (k) Plan and one group in the SIMPLE IRA. I could not find anything to support this but assuming it would not be a benefit cutback is there any relief, for the employer, if the employees get a term notice, albeit after the 11/02 deadline and the employees are receiving a better benefit?

Maybe it's the lack of coffee but I'm lacking confidence in my answer... We have a prospective client that is a controlled group and wants to set up separate Plans; they were hoping to avoid a SH option on Plan 2, which we advised is not permissible. So I was thinking SH match (100% on 4%) for Plan 1 and for Plan 2 QACA match. This provides SH benefits for both employers but a vesting schedule can be applied to Plan 2. Am I missing something...

I have been talking with a consultant that is working with an advisor who set up a "solo(k)" early last year and funded their deferrals (at that time) for the year; later that year, the business owner hired new employees and was operating on the idea that the next year (now) they would adopt a 401(k). However, the advisor now thinks no document, associated with the "solo(k)", was prepared, thus no eligibility criteria was established. So is the solution: 1. Treat it as though no document has been created and remedy that matter 2. Then remedy missed deferral opportunity based on step 1 (design/eligibility criteria)?

When the plan document election requires a $500 minimum on distributions, both termination & in-service would a recurring distribution of an amount less than $500, e.g. $150/mo be considered to violate that and create an operational violation?

We have an participant who worked for Company A (of a control group) and her job was transferred to Company B (of a control group). Company A sponsors a DC Plan with section 401(k) and Company B sponsors a DC Plan with employer source (only) funds. Said participant is seeking to take a withdrawal of her balance from Company A 401(k) Plan and the question arose about her having a distributable event. If review of the IRS guidance, https://www.irs.gov/pub/irs-drop/n-02-4.pdf, Section III seems to suggest that if both companies have section 401(k) then no distributable event is present. However, company B only has employer source funds and no 401(k). Am I interpreting incorrectly here?

We have a municipal pension plan that requires employees to make mandatory pre-tax contributions to the Plan. If a participant terminates prior to vesting, the mandatory contributions are paid out in the year of separation. I was told the "prior person" said the code on the 1099-R should always be 7 (normal) or 2 (exception), but no explanation was given. In reading the Form 1099-R instructions Code 2 does not seem to apply to this distribution, although intuitively it seems to, i.e. participant was automatically enrolled (mandatory contribution) and is now forced to take the withdrawal. However the section of the Code, 414(w)(1)(B), seems to only address section 401(k) Plan(s) with automatic enrollment. Thoughts?

Thanks, that was my understanding, but it's a show me the proof situation.

We have an HCE (>5% owner) who is now in RMD payout status, i.e. 70 1/2 and said HCE asked if we can count the ADP refunds already paid in 2017 to offset (reduce) the RMD amount (total distribution) now payable. Is this permissible? And any IRS produced documentation would be much appreciated. Thanks!