"I have a scenario where a one-participant plan recently terminated their plan and is hoping to start a new 401k plan. Do the successor plan rules apply here and must the client wait 12 months before establishing the new 401k plan?"

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"Plan fails 2019 ADP test, but refunds never done. Correcting now under EPCRS using the one-to-one method. Are the refunds still considered 'late' and therefore subject to the 10% penalty tax? Are they late in filing the 2019 5330 and thus subject to more penalties?"

"My client is self-employed, sponsors a DB plan, no employees. For 2020, he is not showing any Schedule C income; he has arranged to deposit $6,000 per month into the plan brokerage account. The accountant at least knew he could not deduct as a pension expense and 'buried' the amount. Would this amount be shown as contribution on SB?"

"Do the successor plan rules apply to a one-participant plan?"

"Partner in plan had ordinary business loss on K-1 of $470,100 but had guaranteed payments of $302,576. Line 14 ED loss of $168,060. Partner made $17,000 in deferrals during year and received match of $7,500. [1] Is it correct that due to the negative SE earnings he should not have been able to do deferrals or recieve a match? [2] Plan terminated and all participants including partner have been paid out. Partner rolled his assets to IRA. If he could not do deferrals for year -- I believe we have to get the IRA custodian to liquidate and pay him out the excess deferrals -- correct -- most likely with some sort of earnings. [3] If he can't have the match -- that too has to come out of the IRA with earnings -- but since the plan participants have all been paid out and the CPA doing the plan audit and TPA who did the compliance work have both been paid in full in advance -- what if any options exist for the excess match? Does it have to be allocated to all the participants in the plan and supplemental distributions be complete?"

"I had a case recently where an ERISA-qualified union plan provided a pro forma set of QDRO procedures and a Model Order for a shared interest in its defined benefit plan. There was no mention of survivorship, that is, no mention of the availability of a QJSA or QPSA options. I used their Model Form as a rough guide, but added language providing the Alternate Payee with a 100% QJSA and a 50% QPSA as agreed to by the parties in their Marital Settlement Agreement incorporated in the Judgment of Absolute Divorce.

The plan's attorney responded that the plan did not permit QJSA or QPSA options. I responded quoting IRC 414(p)(5), IRC 401(a)(11), 26 CFR Section 1.401(a)-20 -- Requirements of qualified joint and survivor annuity and qualified preretirement survivor annuity, Q. 3-5 and Appendix C of an DOL EBSA pamphlet entitled QDROs: The Division of Retirement Benefits Through Qualified Domestic Relations Orders, and referring them to https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-qualified-joint-and-survivor-annuity

The attorney responded that they would permit the QJSA or QPSA options, but that I could not specify the percentages. (The plan provided that the QJSA had 50%, 75% and 100% options available; and the QPSA had 50% available.) I responded by reminding them of their obligations as plan administrators to provide informations about plan benefits to alternate payees (Questions 2-1 and 2-5 of the aforesaid DOL EBSA pamphlet), and sent them a copy of the PBGC Model Order Booklet, Page 12, Section 10 reflecting the option of inserting any available QJSA or QPSA percentage agreed to or ordered by the trial court. I also suggested that legal fees were awardable to the alternate payee for their failure to fulfill their obligations, citing 29 USC Section 1132(g), 28 USC Section 1927, and Chambers v. Nasco, Inc., 501 U.S. 32, 44-46 (1991) outlining the court's inherent power to assess attorney fees especially when a party is litigating in bad faith. The QDRO was finally approved as I have drafted it.

It was unmistakably clear that the attorney for the plan was intent on protecting their participants to the detriment of their former spouses, and hoped that persons less knowledgeable than I would not know the difference. Perhaps this happens all the time and I am just naive. But it never happened to me in the 33 years I have been preparing QDROs.

What do you think I should do, if anything? Any ideas?"

"Pretax eligibility is 3 Months of Service. SH Match eligibility is 1 Year of Service. Plan is now top heavy. It's my understanding that the plan cannot use the top heavy exemption. Based on this, it's my understanding that the top heavy minimum contribution needs to pass coverage testing. Well, it does not. The coverage ratio is 48.75%. The plan passes ABT, but because the coverage ratio is below the 50%, it does not pass coverage. I believe the only solution is to add people back into as 'benefiting'. Does this seem reasonable?

The plan design is not ideal for top heavy plans. I would have the plan change the eligibility requirements going forward, but they are in the process of terminating the plan."

"A participant requested the maximum loan available. Did the loan paperwork. He returned paperwork and the market has gone down. Can I process for the amount in the paperwork, or can he only have the maximum on the date it is processed? If the latter, do I have to redo the paperwork for the new amount?"

"An owner of a sole proprietorship made deferrals from compensation. However, the owner also had losses and the net compensation for the year was $0. How would you distribute the excess? Would it be using code '8' (assuming the deferrals were pre-tax)?"