A doctor, who recently died, adopted a 412(e)(3) Plan in 2014. Funded it the first year, but not the three years following. He froze the plan in 2018. Note: we urged him to freeze the plan in 2016 when he didn't fund the 2015 benefits. He didn't want to, he stated he wanted to fund the plan. After three years of not funding, he finally allowed us to freeze the plan in 2018. After that he was ill and could no longer fund the plan. We were going to terminate our services if we could convince him to fund the plan, but he died on May 30, 2019. His brother is trying to keep the business open and ownership transferred to his name, but the brother refuses to fund the plan. Has anyone dealt with a plan that is not covered by PBGC, not fully funded and the sole owner/trustee has died? Can we force the business to fund the plan? Can we go to his estate to get the plan funded? Can we just pay out the NHCEs with the funded assets?

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401(k) plan has designated Roth accounts. Participant receives a QUALIFIED distribution -- over 59-1/2, over 5 years. It was reported as Code 7B on 1099-R. IRS is saying it should be a code Q. When I look at the 1099 codes, Q specifically states it's used for a Roth IRA -- there is no letter code for a qualified distribution from a designated Roth account.

Just got a phone call from a person in the HR department of our client saying that a certain participant, who has a participant loan, is dying of pancreatic cancer and has been out on medical leave for the last 6 months. He's not expected to come back to work. His employment has not been terminated. He took out a participant loan on 12/18/2018 for $11,650.00. He made two bi-weekly payments of $119.40 on 1/14/2019 and 1/22/2019. He then went out on medical leave and hasn't made any further payments. The quarter ending June 30 is his cure period. The client wants to know what his options are. Could he make a tiny payment, say $100, and get another cure period running July 1 to September 30? Could he do that twice and thereby keep his loan from going into default in 2019? Frankly I think the person in the HR department is wanting to somehow keep this thing running until the participant passes away so that it will become someone else's issue at that point. In the somewhat similar situations I've seen, it's been "all or nothing" -- the person was either making payments or completely stopped. I don't know what happens when someone pays a little something but not enough to bring a loan up to date. I know the loan is supposed to be paid within 5 years of the initiation date, but does it get re-amortized each quarter, with higher payments, such that it would still be paid off theoretically within the original 5 year period? Is that even permissible? He could, of course, just let it default and pay the taxes on the deemed distribution at the end of 2019 if he's still alive and has the money to pay them.

A 501(c)(3) employer maintains a 403(b) annuity with employee contributions only, and a profit sharing plan with a fixed formula of 3% of compensation. Apparently the two plans were never coordinated. One has recently learned of the other. Because the 403(b) contains only employee contributions, no 5500s have been filed, although 5500s have been filed for the profit sharing plan each year. We don't handle any plans sponsored by 501(c)(3) organizations. Something seems a bit odd here, and I think it should be corrected, but how?

Attorney X had a one-participant profit sharing plan at Fidelity for his one-person law firm until he established a partnership with attorney Z on January 1, 2018. The partnership adopted a plan (as successor employer) that had been sponsored by the attorney Z (who is our client) -- a cross-tested 401k. Attorney Z had a number of employees (all of whom became employed by the new partnership). Attorney X, unaware as to how all this worked, made a $15,000 contribution in May of 2019 to his OLD plan, even though he had no income from his sole proprietorship in 2018 or 2019. A contribution by the new partnership for 2018 is still being determined. Attorney X wants to fix his mistake before he rolls over the old plan assets into the new plan. I'm not sure what kind of mistake or error this should be classified as, in order to determine the proper correction method.

An ESOP adopts an amendment and switches from forfeitures only after a 5 year Break in Service to forfeitures effective immediately upon the taking of a cash distribution. How would prior terminated employees be handled? It seems you can't forfeit their shares until a 5-year break in service even if they took an earlier distribution.

Partnership has a calendar year plan putting deferrals for 2018, for partners in on July 1st. How do you think the IRS would view this on an audit?

How is 5 "years of participation" figured under a plan that restricts in-service distributions to age 59-1/2 and 5 years of participation? What little information I've found indicates the use of elapsed time (5 years = 60 months). Is it permissible to count 5 years for someone with a 7/1/2015 entry date as 2015, 2016, 2017, 2018 and 2019, so as to constitute 5 years of participation? The plan document says 5 years, not 60 months of participation.