Does anyone have a worksheet showing how to discount contributions made back to the beginning of the plan year where there are missed quarterlies? I know we need to add 5% penalty to the effective interest rate on payments that should have been made as of the quarterly due date to the end of the plan year. My question is. on Schedule SB line 19c, is it OK for the discounted contributions (with the effective interest rate and penalty rate where applicable) to be less than the MRC as of the beginning of the plan year?

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I have a cross tested 3% safe harbor plan. The plan uses W-2 compensation and excludes post severance and post year end compensation. There were a few employees who terminated 12/31/2016 but received their final W-2 in January 2017. I know that they should receive the 3% safe harbor non-elective for 2017 However, if the profit sharing allocation is conditional on being employed on the last day of the plan year or work 1 hour of service during the plan year, would they be entitled to the gateway contribution? Technically they did not work any hours in the current plan year even though they have wages and hours reported on the census.

We would like to offer lump sums to current retirees upon the termination of the DB plan. The PBGC has no issue with it but IRS Notice 2015-59 indicates that the IRS is going to publish retroactive regs which will eliminate the option under 1.401(a)(9)-6, A-13 to offer lump sums to current annuitants in the event of plan termination. I've seen various articles which seem to indicate that they don't anticipate the IRS eliminating the lump sum options on plan termination but the notice appears to indicate otherwise. Anyone have any recent experience with the IRS on this?

Our client, a P.A. I will call Company A, sponsors an active 401(k) plan. Very soon (like in 2 weeks), Company B is buying Company A. Company B, not currently my client, sponsors an active SIMPLE IRA plan. Company A will continue to exist and pay salaries to its owners out of receivables through 12/31. The staff of Company A will be paid by Company B from 8/15/2018 forward. The owners of Company A will continue to make deferrals out of their salaries but the employees of A will no longer have any mechanism for making deferrals to A's plan. Company A, in a perfect world, would have liked for Company B to assume sponsorship of Company A's existing 401(k) plan, open it up to all of Company B's employees, and move forward with as little disturbance as possible. However, I believe Company B can't have a SIMPLE IRA and assume sponsorship of a 401(k) plan in the same year. Company A's next preference would be to have Company B take over the existing 401(k) plan as of January 1, 2019. This leaves the employees of Company A without a way to make deferrals from 8/15 through 12/31 since they have no pay coming from Company A after 8/15. Is it OK to just suspend their ability to make deferrals and then have them be able to once again on January 1? Has a partial plan termination been triggered by the change of how the employees get paid as of 8/15/2015? If it matters, most of the employees of A will still be employed by B as of 8/15/2018, but not necessarily in the same jobs they had before. At this time I do not know (and neither does our client) whether this subject is addressed in the buyout agreement, and we do not know the wishes of Company B. Any advice on the correct way to handle this will be greatly appreciated!

Alternate payee fails to inform plan administrator of remarriage, which was to terminate immediately upon her death, her remarriage, or the participant's death. She remarried in 2002. Her new husband died in 2005. She married him in secret, across the country, so as to not raise any flags. We accidentally found out she was married last year. We alerted the pension plans of the modified fraudulent and terminated the QDRO. THE JUDGE TERMINATED THE SPOUSAL SUPPORT AS OF 6-5-2002. The plans are telling us "good luck" with our problem. After all, how would they know if she remarried? She told different lies to different people. She moved six times over the past 16 years and never once did she update her marital status. One plan cut her off on May 1, 2018. The other is still paying her. We get nothing and she is cozy and well off due to her deceased husband's NFL and University PROFESSOR'S pension, along with his SSA. We did find out she changed her SSA over to his. He had a substantial career being he was 82 when they married. Question: What are our possible remedies? The plans are not claiming liability. The Inspector General is also involved. Do we have her arrested for the abuse of an elder, blind and dementia suffering person? Can the plans recover her over-payment and return it to us? Is there insurance that protects either plan or the payee? HELP!

Much has been said and written about missing or unlocated participants. But much less has been discussed about what some describe as recalcitrant participants -- those who decline to deposit or negotiate the check that pays a distribution. Imagine this situation. A profit-sharing plan (with no 401(k) arrangement) permits a distribution after a participant has severed from employment and attained age 60. The plan requires a distribution after a participant has severed from employment and attained normal retirement age. After the participant severed from employment, about 40 mailings -- including disclosure notices, revised summary plan descriptions, summary annual reports, and benefit statements -- were sent to the participant's address, and nothing came back as undelivered. After this participant's normal retirement age, the plan administrator mailed the participant a check for her required distribution. The participant is not missing; rather, the administrator has solid proof that the distributee accepted delivery of the plan's mailing. After eight months, the payee has not deposited or negotiated the check. What steps should the plan administrator take next? What are the big recordkeepers doing with problems of this kind?

Rev. Rul. 2007-43 seems to me to provide some reasonable clarity for determining when a partial termination has occurred. You divide the number of "employer initiated" active participant terminations during the period in question (e.g., plan year) by the number of active participants you had at the beginning of the plan year, and, depending on how much the resulting percentage is over or under 20%, you determine whether you had a partial termination. 20% or over, you probably did. Under 20%, you may not have; other facts and circumstances can be brought into the analysis if you're close. All this seems reasonable to me, and as far as I can tell it's rationally related to the case law. But Rev. Rul. 2007-43 also seems to say, without any basis in regulations or case law, and possibly, in my opinion, contrary to the plain meaning of the statute (IRC sec. 411(d)(3)), that if you determine you had a partial termination, then everyone who terminated without full vesting during the period in question, including voluntary terminations, is deemed to have been "affected" by the partial termination and therefore is required to be fully vested. Below is the relevant paragraph from Rev. Rul. 2077-43:

"If a partial termination occurs on account of turnover during an applicable period, all participating employees who had a severance from employment during the period must be fully vested in their accrued benefits, to the extent funded on that date, or in the amounts credited to their accounts."

Does anyone besides me think that this may be baseless and lacking in common sense? Am I missing something that makes Rev. Rul. 2007-43's conclusion regarding the definition of "affected participant" correct?