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Found 4 results

  1. I have a situation where Company A started 401(k), contributed, took loans, and then Company A went bankrupt. Although the business is closed the 401(k) maintained active status to avoid loan default and classification as taxable income. 6 months later the same owner started another business, of the same industry type, and 3 of the same employees. A new 401(k) was opened and the owner requested to transfer the loans into the new 401(k). Because this is a same owner with a request to transfer assets, is this a successor plan or new plan with rollover? Thank you for any input.
  2. The PBGC recently filed a bankruptcy claim for $937 million against a plan sponsor who went bankrupt last March but where the Defined Benefit Plan they sponsored had an AFTAP OF 115% in 2015 ($911 million in assets and $789 in liabilities). In looking over the 5500 all the assets are reported as being in a Master Trust Investment Account. Could an MTIA really be worthless in a bankruptcy? Or could this be the PBGC filing a routine claim to protect themselves? 2015 5500 and PBGC claim letter attached Westinghouse - pbgc claim-1.pdf westinghouse-5500.pdf
  3. Actuarial vendor performs the annual actuarial valuation for a DB plan, and delivers the report to the sponsoring employer (i.e., the PA). Actuarial vendor then sends its invoice for services rendered. The plan provisions have always permitted the plan to pay reasonable expenses if not paid by the sponsor. "The trust fund shall be used for the exclusive benefit of the participants and their beneficiaries and to pay administrative expenses of the plan and trust to the extent not paid by the Hospital." In prior years, the sponsor has elected to have the plan pay some expenses, including fees from the actuary, but not necessarily the same each year. In some years the plan has paid expense X, Y, and Z, while in other years the plan has paid expense X and Y. For the current invoice, the sponsor does not pay promptly, nor is the invoice paid by the plan. A few months later, the sponsor declares chapter 11 bankruptcy. The sponsor also files for a PBGC distress termination (without involvement of this actuary). Sponsor refuses to pay the actuary's invoice, and refuses to send the invoice to the plan trustee for payment. Bankruptcy attorney says, “get in line, like everyone else”. Research includes ERISA sections 403 and 404, and DOL Advisory Opinion 2001-01A, Distress Termination instructions. Nothing appears to restrict the payment of reasonable administrative expenses in the event of bankruptcy. My view is that plan provisions require the sponsor to direct payment from the trust since the sponsor has not made the payment, but I’m willing to consider other viewpoints. Any comments or experience that you are willing to share?
  4. Hi, Employee of Sports Authority participated for a number of years in deferred compensation plan. FICA and Medicare was withheld from the deferred comp. SA went bankrupt in 2016. Deferred comp is a total loss. Is there any type of tax deduction/writeoff on the personal federal tax return for the withholding and contributions? If so, how? Thank you. Keith
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