David Peckham

Trying to answer my own question. . . "Section 7503 of the Code extends the time for performing an act required by the internal revenue laws when the last day for performing the act would be a Saturday, Sunday, or legal holiday." quote taken from Rev. Rul. 2015-13. The Cycle 3 restatement deadline was an act required by Internal Revenue laws, was it not? So, I think our client would receive the benefit of the weekend extension. Does anyone disagree?

We routinely design our new comparability DC plan documents to require NO hours of service and NO last day of the year employment once an employee has satisfied initial eligibility conditions and has become a participant. With a new comparability plan, it is relatively easy to pick and choose which employees (if any) who terminated during the year will actually receive an employer contribution. If the plan is not top-heavy, the employer can even pick and choose which employees get allocations even among those employees who did NOT terminate. And even if the employer chooses to provide an allocation of the employer contribution (to pass 401(a)(4)), often vesting will mean that there is a relatively small net cost to the employer. This way, we don't worry about BIS, and all employees, once they are participants, can elect 401(k) deferrals for the entire term of their employment.

We have a client who signed the Cycle 3 plan restatement document on Monday, August 1, 2022. Is this late, or did we get a weekend extension in this case?

Doctor A, age 45, has her own corporation, Corp A. Corp A is a participating employer in the ABC 401(k) PSP, sponsored by Group G. Doctor A decides to move out of state and leave Group G, and her corporation signs a new contract with Group H, which has no affiliation with Group G. Corp A signs a "Withdrawal as Participating Employer" document to cease participation in the ABC 401(k) PSP. Group H sponsors the DEF 401(k) PSP. Corp A receives no further revenue from Group G; all of its revenue is now from Group H. What options does Doctor A have with respect to her ABC 401(k) PSP account, which includes salary deferrals as well as 2 other money types? Can she establish a rollover IRA? Or is the only option to become a participating employer in the DEF 401(k) PSP, and establish an account registered as such?

Notice 2023-54 provides relief for missed 2021, 2022 and 2023 RMDs for a non-eligible designated beneficiary of an IRA or DC plan. What about a missed RMD for a non-eligible designated beneficiary of a DB plan participant?

Is a mandatory plan restatement (for example, a Cycle 3 restatement) considered a settlor function by the DOL? Or can the fee be paid from plan assets?

Client has not yet restated DC plan for Cycle 3. Client is willing to sign interim amendment for a plan terminating in 2022. What are the issues if he terminates the plan prior to 7/31/2022, the Cycle 3 restatement deadline, without actually restating the plan for Cycle 3?

Small DB plan just husband and wife. Husband is age 73, so has been taking RMDs. The annual annuity date is April 1st, so husband has already withdrawn his 2020 RMD. Now both husband and wife want to withdraw $100,000 each as CRDs. Is there anything wrong with that?

Here is an anonymous attachment.RMD_Calculation_Joe_Participant.xls

Sorry, Andy, for not responding earlier. I have attached a pdf file and Excel file showing our calculations. Comments? (EDIT 06/07/19. Personalized attachments are removed.)

Participant A is age 77, so he has been taking annual RMDs for 7 years. In his first RMD year, he took out his RMD in December. Every year since then, we have advised taking his RMD in December and not any earlier to satisfy the "generally consistent" annual annuity distribution that he would be receiving from an insurance company if his annual annuity came from such as source. Now, he is really pressing us to allow him to take his RMD earlier in the year. Can we make some sort of one-time adjustment to allow this? He would like to switch to taking his annual RMD on March 15th every year.

Thank you, Luke. I agree with your analysis. It doesn't seem fair, but the two 5-year holding periods are computed separately (designated ROTH account inside PS plan holding period vs. ROTH IRA holding period).

Client executed an in-plan conversion of employer PS account to a designated ROTH account on December 30, 2014. QDRO now authorizes 1/2 of that designated ROTH account to go to ex-spouse. Ex-spouse has never owned a ROTH IRA. Ex-spouse now elects a direct rollover from the plan to a newly-established ROTH IRA. Client and ex-spouse are both age 70, so the 10% penalty is not a concern. The only concern is whether all earnings (and the earnings are substantial since 2014) are tax-free or not. Question #1: How does the 5-year holding period apply to ROTH IRA assets that originate from a transfer that would have been non-qualified if it had not been a direct rollover from the plan to the ROTH IRA? Question #2: Suppose that the direct rollover does not occur until January 2, 2019. How does the 5-year holding period apply to ROTH IRA assets that originate from a transfer that would have been qualified if it had not been a direct rollover from the plan to the ROTH IRA?

Can a non-profit 403(b) plan be merged into a 401(k) plan?