RayRay

That's interesting, and resolves the immediate problem (thank you!) but the greater question I think persists. If a participant is in RMD pay status at the time of his/her death and the spouse doesn't remove the funds from the plan, would the RMDs cease until such time as the surviving spouse reaches their RBD or do they continue (recalculation or questions regarding the proper denominators notwithstanding)?

This plan has been amended to use the updated ages as applicable.

Retired participant had reached RBD in the later 20-teens and began taking RMDs on schedule. He passed away in 2021 and his wife elected to leave the funds in an account in the plan in her name until she could decide what to do with them. As she was not yet RMD age, she did not take RMDS in '21, '22, and 23. She is now 73 years of age and wants to roll her funds out of the plan into an IRA. We're of two minds on exactly which RMDs are missed. On one side, it is argued that only '21 is missed, as since he was in pay status that year's RMD should have still come out, and she'll need one '24 since she is now of RMD age. On the other side, it is argued that '21, '22, and '23 were all missed, as since he was in pay status at the time of his death in 2021. Anyone feel particularly strongly about either side? The Plan Document does not appear to provide a definite answer to this specific situation.

I haven't received a copy yet from the individual I've been dealing with personally, but from her description of the form it appears to be the normal form letter, attached. SSA Potential Private Retirement Benefit Information Letter.pdf

Has anyone else received calls from clients stating their former employees have received SSA Potential Private Retirement Benefit Information Letters when they took full distributions years ago? In the last week, we've received calls from several and in every case the participants were reported with a code D on a form 8955-SSA at some point in the past. The oldest one was from 1994! Anyone aware of any issues at the DOL that might have resulted in this, or aware of something that has been released about this that I might have missed? Thanks!

This isn't entirely on point, but a large part of our practice is along the gulf coast and we experienced a large number of delayed filings due to Hurricane Ida in 2021. We received a few dozen notices from the IRS regarding the late filings, and while we responded to all of them in the 1st half of 2022, we are STILL waiting for responses from the IRS to let us know if the late filing penalties have been removed. So who knows how long it may take for what you're doing.

A customer engaged us to prepare a non-SH 401(k) plan document for them in mid-2022 with elective deferrals to begin in the 4th quarter of the year. We prepared the document and they signed it. We've received word from the advisor that they've never collected or contributed a cent into the plan, and whether or not they ever gave their employees copies of the SPD or had an enrollment meeting is unknown at this time. I was wondering what the board feels is appropriate with regarding to formally terminating the plan. I've heard the argument that if the plan is never funded it never really starts, but I don't know if I can get behind that. In my mind, the execution of the plan document creates an obligation on the part of the plan administrator to operate the plan according to its terms, and there's an operational failure resulting in a missed deferral opportunity as a result. I haven't been in the industry that long, so I'm not sure what the commonly accepted practice would be in this situation. Any thoughts?

It's entirely possible that I'm just overthinking it.

We've recently taken over as TPA for an older 401(k) plan. It has an enhanced safe harbor match and an automatic contribution arrangement, but it is not designated as an EACA or QACA. Looking at prior administration records, it looks like they've treated it as a Safe Harbor plan for purposes of the ADP/ACP and Top Heavy testing benefits, which I can certainly see the argument for. It also looks like they've met all the criteria to be a QACA without calling it one. So I'm looking at this and thinking, well, it walks and talks like a duck, so maybe its actually a QACA? And on the other hand, if it isn't a QACA, would it still have the ADP/ACP and Top Heavy testing benefits that the SH Match provide in a normal 401(k) situation? I feel like the answer to the latter is yes but I can't quite pinpoint why.

That's a great idea! I'll try it. The kicker of all this is that the person I'm assisting is the CFO of the company. Thanks for the assist!

This is an actual question I received from a client. I tried to explain that when a loan is taken, the funds are removed from the account and given in cash, so they cannot be invested in the plan because they aren't in the plan. They get reinvested according to the participant's allocation elections as they are repaid. He then asked why the loan balance was shown on a report as an asset of the plan, and I tried to explain that the loan balance was basically an account receivable at that point. After several additional exchanges, he asked for some regulatory information to support what I was saying. This left me at a loss, because this is such a basic concept that I cannot fathom there being any regulatory information about this. I even tried but couldn't find anything. Anyone have another way to try to explain it?

That all makes great sense, thank you both!

Hi all! We're looking at taking over a plan that is a spinoff from a MEP. The MEP allowed for Loans, but the employer does not intend to include loan provisions in the new plan. Would this be able to be treated like a plan termination offset situation for the few participants who have loans, allowing them to begin rolling funds into an IRA to replace the loan offset? Or is there some anti-cutback rule that I am not thinking of that would require the employer to allow the participants with loans to continue their payroll deductions for loan repayments into their accounts in the plan until all are repaid? Thanks!

Thanks for the discussion! I read that other thread too and I wonder what got deleted from there. We talked about it here and came up with something similar to what Bird said above. Glad to see that others agree!

I have a similar question but with regard to TPA fees and for how far back may the reimbursement be reasonably made?