pensiongeek

I have a DB plan where the plan effective date is for 2024, providing a vested benefit accrual as of 12/31/2024, but the plan did not fund until August 2025. The RBD for the participant/owner was 4/1/2025. Did she miss her first RMD even though there were no assets in the plan to take an RMD from? Or maybe I am over thinking it. This RMD is mute because it is for 2024 which is based on a 2023 accrued balance that did not exist? Maybe her first RMD is actually due by 12/31/2025 for 2025 plan year based on 2024 accrued balance.

The plan documents do not seem to address this topic in either the RMD section or the MEP section.

I have a situation where I have a closed MEP that includes Company A and Company B. Company A has different ownership than Company B. The owner of Company B is over age 72 and has an account balance in the plan derived from being an employee at Company A (in which he has no ownership). Is he required to take an RMD since he is an 5% owner in ONE of the companies that sponsors the plan? I found this, but that is all I can find. I told him he does have to take an RMD and he wants additional documentation and I understand his argument. Retirement plan and IRA Required Minimum Distributions FAQs | Internal Revenue Service (irs.gov)

We are responding to each denial letter separately and sending a blanket letter to the IRS with the certified receipt confirmation showing mailing before 7/31. Has anyone heard any updates from the IRS on these?

yes, this can be done. Many people do this to be able to borrow from the funds. It also may help with pricing of an investment since it will add more assets to the account.

It will depend on when your plan is effective. If they made it effective in 2020, you can make contributions for 2020. Your TPA or CPA should calculate the amount available for 2020. No more than 10,000 should be classified as deferrals since you made the election in that amount. You can make additional contributions that are considered employer contributions if your income allows for it. For 2021 you can update your 2021 deferral election any time up to the last day of the year. You will still have until your tax filing deadline for 2021 to make your employer deposits to the plan.

Example- I have an ESOP plan that includes a 401k deferral feature. The employer would like to remove the deferral feature, including all the deferral assets and close the accounts. Is it possible to write the partial plan termination amendment to terminate only the deferral portion of the plan that would create a distributable event for the participants?

THe IRS has worksheets to use. https://www.irs.gov/retirement-plans/plan-participant-employee/required-minimum-distribution-worksheets

I don't know if I agree that this can be removed retroactively. If they had signed the amendment prior to 12/31, then yes.

When was your father's date of birth? If I remember correctly, it doesn't change the calculation unless your mom was more than 10 years younger than him.

I have a scenario where the employer declared the 2019 discretionary profit sharing contribution before the tax filing deadline for 2019, signed and filed the 5500 with the contribution on it, and provided the participant statements showing the contribution. Due to a change in bookkeepers, the check never got issued and is still outstanding today. I believe the plan is owed the contribution and it should still be paid, but deductible in 2020. Are there thoughts on if the missed contribution can/should be paid to the plan since the participants were notified and it was declared? The current CPA is going to amend to remove it from the 2019 tax return and believes is CANNOT be made to the plan now and that the 2019 5500 and participant statements should be amended as well.

Our Pension Reporter (datair) is rejecting an 5500-EZ saying its already been filed. ..... but it hasn't. There is no way to tell that it hasn't either since EZs are not available for public disclosure.

If an employee defers 100% of her pay in a Safe Harbor Match plan, does she have to return a portion of her deferrals to ensure she receives the match or does she not get her match for the year due to the 415 limit?

@Bill- so you agree it should be no more than 50% on the date we approve it?

With this date of constant market fluctuation, what is considered 50% of the balance to take a loan? Is it the date the loan was requested, approved, or processed? Below is what is says in code section 72(p). I have a participant who requested a max loan on 3/9 and we are processing it today. Of course, the balance is way less today, so his loan availability is much less today. Would it be appropriate to process it today for the balance requested on 3/9 because it was 50% on the date he requested it?

Yes, when they remove the Safe Harbor in 2020, they will amend the plan with a 30 days notice to employees. They will be required to pay the 3% SH through the date of the amendment effective date.

The plan is silent on this topic. It does say it would be combined for 410b and 401a4, but doesn't mention ACP testing.

I have a plan that offsets Discretionary Match with the prevailing wage in their other plan. Does the ACP test include ALL calculated match, or just what they get after the offset?

I agree with David Rigby. It is a transfer of liability, not a distribution.

Doghouse, can you please confirm the section of the EOB?

We have a plan that has a participant who died in 2019 after attaining age 70.5. Had he survived, his first RMD would have been due by 4/1/2020. His spouse is his sole beneficiary. Section 1.401(a)(9)-3 allows her to delay commencing benefits until 2020, however she is electing a distribution now. Does a distribution now trigger an RMD requirement for 2019?

Our paperwork has a section that indicates if you are overpaid, you will pay it back. I agree with the above, it is not funds you were entitled to so you must return them.

One of my plan sponsors had another company in their plan and they sold that company in June and it spun off into their own plan for 2019. The plan is failing the 410b testing for ERPS due to those individuals. Do I really have to include those people who were with the employer that was sold off? Tell me there is a special rule that those employees don't count?

https://www.law.cornell.edu/cfr/text/29/2520.102-2

I think the question may be, not are they exempt, but does their PBGC coverage satisfy their ERISA bonding coverage requirement?