Dawn Marlar

We have a client, call him John who has a 401K Plan and the Plan allows rollovers into the Plan. Both a Husband and Wife are employees of John who sponsors the plan and both the Husband and Wife participant in John's plan; to say it another way, both husband and wife have separate participant account balances in the John's plan. The wife recently died and her surviving spouse wants to receive a distribution of his Deceased Wife's account in John's plan as a subaccount under his account in John's plan. Is this type of distribution allowed and considered an eligible rollover distribution under Code Section 402(c)(2) and (4)? Thank you, Dawn

Thank you for your prompt and great responses.

Good Afternoon, I have never had this situation before and I need the Forum's expertise: The situation is as follows: There are two Company Plans, a Cash Balance Plan and a Cross Tested Profit Sharing Plan. Together the plans are Top Heavy. The cash balance allocations must be tested with the Profit Sharing allocations. When non-discriminately testing the Cash Balance Plan with the Profit Sharing Plan, only one Participant, lets call him John, would need to have his PS percentage increased from the 5% MTH allocation (the 5% MTH allocation provided to all NHCEs passes the Gateway test) to 8.35% of compensation. This provides the minimum increase needed to pass 401a4 testing. As stated above, the Profit Sharing Plan is X-tested and to receive a Non-Elective PS allocation, the Plan Document has a 1000 hour and last day requirement and even though John was there on the last day of the plan year, he only worked 600 hours during 2021. Knowing those facts can John receive a NE contribution greater than the 5% of compensation MTH contribution in the PS plan or do I need to increase another Participant’s PS allocation that did work 1000 hours and was there on the last day of 2021 to pass 401a4 testing? Thank you, Dawn

ESOP Guy - She turned 70.5 in 2019 and was still an active employee until 11/2020. Her first distribution would have been taken by 04/01/2021 if 2020 RMDS had not been suspended by IRS.

I have a 401(k) Plan whereby a non-owner participant who is older than 70.5 terminated on 11/02/2020. Her First Distribution Calendar Year was 2020. She was rehired on 02/26/2021 and has been working part-time. Does she need to take a RMD for 2021 and future years.

We have an owner only cash balance plan that purchases warrants but the warrants are never valued. The asset statements only show wire transfers out of the plan account for warrant exercises and does not show which warrants) are being purchased by the wire transfer. How do we value the monies that are leaving the plans to purchase warrants if we don't know what was purchased? Is it shown as the value of the monies wired out of the plan or just as a loss on the assets for the year? Does the client have to request that their Financial Advisor provide the current price for each warrant listed as the end of the plan year?