60 days from Business account?

Hi,

An MP Plan, owner only, terminated 22 years ago. The owner (plan sponsor and only participant) now received from unclaimed funds, a check made out to the "xyz corporation mny purch" (plan sponsor)  for $200,000. There is no plan account anymore. To facilitate a non taxable rollover of this money purchase check to the IRA of the owner, can the check be deposited into the Corp account AND then within 60 days be transfered into the owner's IRA? Similar to a plan distribution that was deposited into the personal account of a participant, that can be transferred to an IRA within 60 days to be a non taxable distribution? Thank you very much for any insights on this.

What if you contacted Penchecks (or another trust paying agent) to see if the trustee could endorse the check to them and they pay it out to the IRA?  They may not be able to take the check, but if they can, it keeps it out of the corporate account.

On 3/3/2023 at 1:35 PM, Bill Presson said:

What if you contacted Penchecks (or another trust paying agent) to see if the trustee could endorse the check to them and they pay it out to the IRA?  They may not be able to take the check, but if they can, it keeps it out of the corporate account.

Thank you Bill. Much appreciated.  If this is not an option (or maybe If a plan document is required and not available anymore from 20 years ago) is it not advisable to deposit it into the sponsor corporate account and then to the IRA, or does the fact that it will be rolled out into the IRA within 60 days, somehow make it more justifiable?

1. I don't see the relevance of 60 days here. It is a payment from a plan account to another plan account.

2. It would take a very friendly bank to deposit a check of that size into an account that is not titled as the check is written.

3. I think someone needs to go into the bank (or other financial institution) and see what they are willing to do. Most likely they will say they have to open an account in the name of the plan, deposit the check, write a check back out and close the account. So be it. Then you have questions about both 1099-R reporting and 5500 reporting, as well as plan document issues...obviously a document was not maintained all these years so you don't have a qualified plan.

(C'mon, aren't you going to tell us how this happened?)

1 hour ago, Bird said:

1. I don't see the relevance of 60 days here. It is a payment from a plan account to another plan account.

2. It would take a very friendly bank to deposit a check of that size into an account that is not titled as the check is written.

3. I think someone needs to go into the bank (or other financial institution) and see what they are willing to do. Most likely they will say they have to open an account in the name of the plan, deposit the check, write a check back out and close the account. So be it. Then you have questions about both 1099-R reporting and 5500 reporting, as well as plan document issues...obviously a document was not maintained all these years so you don't have a qualified plan.

(C'mon, aren't you going to tell us how this happened?)

Thank you Bird. Just to clarify...

1. The 60 days is so that the deposit of the plan assets into the Corp account should not be a distribution (similar to when a participant deposits into his account and then within 60 days rolls into an IRA).

2. The plan terminated over 20 years ago. That is why there were no plan doc restatement etc over the years. 

I think the bigger question is how were these assets treated 20 years ago when the Plan was terminated and why are they being returned now from unclaimed property?

And if you you are treating them as qualified plan assets eligible for rollover to an IRA, how are you doing so now if the Plan terminated 20 years ago and has never been updated for current law nor filed any 5500 (presumably) during that 20 year period.

I am with Lou here.  What is this money?  Was it distribution check not cashed?  If so, is that person owed the money?

Maybe if I had all the facts it would be obvious the money has to be the owner of the plan sponsor but I would start with as a guide where was the money supposed to go 20 years ago? 

I'm confused as to how an owner only plan has $200K wind up in unclaimed property.