Basically

A single member plan that invests through Merrill Lynch made every effort to liquidate before 12/31/2021 so that the plan can be terminated. The process started in August of 2021 and everything was rolled into IRAs. For some reason 14 shares of an investment kept being returned to the account. $1,900 dollars. It left and came back and left and came back. The advisor is saying its a ML back office problem. He has a documented paper trail. I am of the mind to say the plan is terminated as of 12/31/2021. If an issue arises later then deal with it then. Sound good? Anyone ever have this problem?

Thanks. Appreciate the response.

A client is telling me that the form 5500EZ does not need to be filed this year because their assets have dipped below $250,000 (as of 12/31/2021). Makes me nervous to not file. Do people skip a year if the plan's assets don't exceed $250,000? Or is it recommended/you recommend to the client to keep filing? OR by chance, is an EZ plan required to keep filing once a form was filed (even if assets are less than $250,000 now)?

Got it.

perfect, thank you.

I have read: (1) that a younger beneficiary of a deceased plan participant is entitled to take a lump sum distribution and not be subject to the 10% premature distribution tax because the deceased participant was older than 59-1/2. (2) But then I also read that "the lump sum you receive will be subject to local, state and federal income tax. However, you will not have to pay the 10% early withdrawal tax even if you and/or the deceased person are under 59 ½" That seems fair to me, but then I don't decide what is fair. Is #2 correct? And on the side, the spouse of the beneficiary has no bearing at all on any tax matters.

Zeller, I am using the ftWilliam doc, so I gather I can open the vesting section and place Suzie Doe in there and say that she is 100% vested upon her termination and that will fly? david rigby, I will for sure get it done prior to her being paid out. Thanks

This small CPA firm has 6 employees. A receptionist is leaving and is 80% vested at best. The owner wants her to receive her full account balance. The 2/20 TH vesting leaves her just short. I suggested with the Cycle 3 restatement requirement change to a 3 year cliff which would also be TH compliant. He want's to just give her the full account balance (her money is segregated, all segregated investment accounts). He asked me "what if we call it a mistake, we paid her out everything by mistake, what harm would there be?" I said it would be an operational failure, you didn't follow the document as it stands. Would the IRS come down on them if by chance there is an audit? He wants to just do it.

Appreciate all the responses, thanks for your help!

Ok, so because she is old enough to need an RMD and because she died that is what triggers the required RMD.

Mr. Bagwell, that is what I have been told. 2021 becomes the beginning date, must take the RMD by 4/1/2022 C.B. Zeller, the beneficiary is the spouse. It is my understanding that there is an exception to the 10 year rule. He can roll it all into an IRA and simply take normal RMDs (no 10 year rule). You are also correct, they have not/did not taken the RMD by 4/1/22. This is a CPA asking me what I know, this is not my client. They will deal with late penalties. I am assuming the spouse beneficiary will need to take an RMD (for 2022) prior to rolling it all over to his IRA, correct? And use the table for beneficiaries, not the uniform life?

Never terminated, just died December 2021. (12/22/21 I'm told) Because she died would she be considered terminated as of her date of death? and as such be required to take a 2021 RMD based on her 2020 year end balance? I can see the beneficiary being required to take a 2022 RMD based on her 2021 balance.

So an employee who was never required to take an RMD, if they die then the RMD requirement will kick in? The beneficiary will be required to take it until the funds are distributed? If so, when? Beginning the following year? The year they died? This participant died in December 2021. Appreciate your help.

I have never heard of this situation. A full time employee old enough to need an RMD but not required to take one because she isn't an owner (just an employee) died in December 2021. Technically she wasn't employed as of her date of death. That wouldn't kick in that she needed to take an RMD for 2021 based on her 2020 balance, would it? Maybe the short question to ask is, do deceased plan participants (who have not been paid out yet) need to take RMDs? I guess technically they still aren't owners so no? I just read that "once a participant starts taking an RMD they must continue taking one, even after death". The twist is that this participant was never required to take one due to the fact that they were an employee and not an owner. Would that mean that her account is not required to distribute an RMD for 2021 because she was just an employee? Am I answering my own question?

A Dr. left a practice and started his own. He rolled his pension into a new plan established by his new practice. This money would be an unrelated rollover, correct? He promptly took a $40K loan. Made payments. COVID comes and he suspended his payments. He forgot to re-start his payments so now the loan is in default. If I am correct and the money the loan was taken from was his rollover account, can't we just distribute the remaining balance, issue a 1099-R and be done? Would it be an offset? Dr. Loanshark is only 55, if that makes a difference.

Thanks for the reply, sorry for disappearing. I will look up if Massachusetts requires withholding.

So this single member plan paid out the RMD for 2022 today but did not withhold the fed and state taxes. The financial advisor is saying..."no harm no foul... just put on the 1099-R no withholding and the participant will be responsible for the taxes outside the plan". He said that "the CPA will prepare some tax payment vouchers and remit the funds". Soooo... will there be a problem? is this ok? Thanks

Thanks so much

So he has to fix It's a small heating oil company, 5 employees total, and everyone is participating. The owner is happy to pull the contribution because this burner tech has burnt him by quitting after the owner went over and above to accommodate him. At the same time he doesn't want the terminated employee to spread bad blood. The owner is ok with paying the 20% vesting ($1,600) to just make him go away. Can't leave it alone?

A plan sponsor provided a hire date that was actually months before the employee was actually hired. As a result the employee was included in the profit sharing contribution calculation. A contribution was made on the employee's behalf. This is a straight PS plan, not a 401(k). Do we have to honor the contribution, or actually, do we have to take it away ? Thanks

I'm pretty sure that is how it is CuseFan but I will be sure to check. Thank you

Thanks!

I have a small plan that has a couple of companies, a control group. The owner of course earns compensation from each company. When calculating the contribution the compensation I would use would be the total he earned from all companies, correct? As I write this it seams like a no brainer but I just want to be clear.

The plan is TH either way so TH minimums are always made. I was just curious. I'll have to ask them to be specific so I can make sure I have it correct. Cross my "t's", dot my "i's". Just to be clear... Un-Related: - Rollover from an unrelated plan someone belonged to before this plan - Rollover from IRA? in essence, a rollover from anything that is not directly related to the plan being rolled into.

That is what I was wondering.