PS
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Everything posted by PS
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this is the owner.
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the termination date was 09/01/2023 and the plan document is silent on the personal contribution.
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Good Morning! Plan is terminating due to business closure and there is still once active participant who wants to do a personal contribution strictly from his funds directly into the 401k plan. Personal contribution (with no funds coming from the Company) is this permissible? Thank you.
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Thank you!
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Hi, I've never come across Form 2678, can any one explain what Form 2678 is and if this is required for terminating plan. Thanks
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Should the Cycle 3 restatement have the plan termination date.
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Hi, Should the Cycle 3 restatement be amendments to include the Plan Termination date? is it a must or does a 5500 hold good.
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Hi B,
you had some follow up questions related to the Puerto Rico plan Termination. Please find my finding.
Is the plan with a cash or deferred arrangement? Does it have a match or after tax feature, or just profit sharing?
Is the plan PR-qualified only or dual-qualified in both US and PR?
Is it 401k or 1081.01(e) plan, can you confirm that the plan sponsor does not sponsor an alternative defined contribution plan that would subject the distributions to the successor plan rule under both the US and PR law?
- Its a Deferred arrangement and it does have a Match
- its Dual- Qualified but only 11 participants with balance and all are in PR
- its a 401K and plan sponsor does have other 401k plans however I don't believe there is any restriction on distribution.
Could you share your thoughts how the Termination can be handled and also is there any guidelines on Puerto Rico plan termination that might help.
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Hi, Does any know how many years after the 401k Plan terminates can a participant bring a claim against the Fiduciary and Plan Sponsor. One of my client has insurance policy for this type of claim, and they will need to purchase “tail coverage” for the policy for it to stay in effect in case anyone brings a claim. Is the statute of limitations for a 401k plan usually 3 years, or is it longer?
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Hi, This is DC plan and it is a dual-qualified. I need to dig in to find out more on the remaining question. I will check and confirm.
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Hi, Good Evening! looking for help on Puerto Rico plan termination. This is the first time I'm handling a Puerto Rico Plan that needs to be Terminated. I would like to under how different this is from a regular plan termination specially when it comes to a 1) forced distribution for the unresponsive participants. 2) Any special notice that needs to be sent out to the participants? 3) Can Participants be rolled over to an IRA account? should that be Puerto Rico Individual Retirement Account only? 4) What are the option available for a participant that has loan? 5) how does 5500 and Non-discrimination testing work? Thanks
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The three entities were part of a controlled group. Company A owned all three entities participating in the 401k plan and the new 401(k) plan will be a multiple employer plan.
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There are three entities and out of which two of them wishes to continue with the retirement program and hence they decided to spin off their portion into a new plan however the client never got it to our attention or spoke about spinoff. We went ahead with the termination of the 401k plan and now we are in a situation the term needs to be on HOLD since participants have not received spin off notification letter, looks like some have even taken a distribution any idea from the regulatory stand point how this can be rectified and handle the spin off first. Thank you.
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yes.
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the plan terminated in 2022 and if they allocate it for 2021 than don't they have to allocate to all eligible participant? the client allocated the $300 to just one participant in 2022.
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sounds good, but is there anything that I can share/point the client to refer on this ( Secure 2)
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the funds already got re-allocated and the distribution was processed. We have now identified the defect and trying to see how this cab be fixed or how this can be fixed in order to pass the testing.
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The sponsor did not have any invoice the only option was to have the funds re-allocated, but they chose to give it to one part.
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Hi, There was a balance of $300 in the forfeiture account and the sponsor was unable to terminate the plan because of the balance in the plan level l account. The sponsor decided to re-allocate the balance in the forfeiture to one participant as a match contribution. There was no employee for 2022, they funded a match in 2022 but there is no deferrals which has lead to a operational defect since they can not fund it match. Since the plan is completely terminated what options the client has to have this corrected/fixed. Thanks
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we received the plan for termination in 2019 and the balance in the forfeiture was used sometime in 2017, my guess is the sponsor. Since the amount will be given on apro-rata base I'm wondering how can this be reported on the part's 1099-R.
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The will be given on a pro-rata base however does ERISA state how this should be reported on 1099-R?
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This was a lump sum distribution and its an abandoned plan. Participants are reaching out and we don't have a sponsor to fund.
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Agree!
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Hi, One plan is moving to the "retail" and making the current RK as the custodian and not the record keeper. The accounts can be used to hold 401k assets on the "retail" side of where the plan is record kept. In order to open these types of accounts, the Plan Sponsors must sign a new Retail Adoption Agreement and a new Retail Service Agreement, in order to do this the plan must terminate. My confusion is "Will this be even considered as a Plan termination" as per my understanding Plan termination is a corporate action, participant have the right to choose they distribution option, they cannot simply be moved over to retail side. Can participants just be rolled over ( Active and Terminated) into the retail account? I've never encountered something like this. Thanks
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Hi, one of the terminating plan have 5-6 participants who had forfeited the checks, the money was moved into the forfeiture account which was used to pay an invoice. Since we are working with the DOL and the forfeited check needs to be re-issued and considering the fact that the balance in the forfeiture is less by $100 can we re-issue on a pro-rata base and also will this needs to be reported on the 1099-R? Thanks