"Can someone point me to how ROTH payouts are taxed? I know the 5 year rule but here is where I am unclear: Situation: Susan has been making ROTH deferrals since 2015. She makes ROTH deferrals every year. The last 7 years she has amassed $100K+ (deferrals and earnings) Susan is over 59-1/2 and would like to take a distribution. Key Points:

• Susan opened the ROTH account over 5 years ago ... ✔️
• Susan is older than 59-1/2... ✔️

So -

1. Is the only rule that the ROTH begin date of the account be 5 years or older?
2. Does it matter that some of her ROTH deferrals are less than 5 years old?
3. Would Susan's distribution (which includes contributions and earnings) be tax free?

As you know, a client comes to you telling you how it will be taxed. I just want to be sure. When she dies, with the Roth account non-zero, what is the taxation to her beneficiary? Thanks"

"Based on what I'm reading from the IRS website, missed deferral and SHMAT contributions over 2 years old have to do the following: [1] Deposit 50% of missed deferral + 100% of missed SHMAT contributions. [2] Missed deferral is deposited into QNEC source, missed SHMAT is deposited into QMAC source. [3] Lost earnings are based on the missed deposit going into QNEC and QMAC sources. [4]Prepare 5330."

"I'm being asked to conduct mandatory distributions for a few termed participants with balances over $1,000. In the past I've used Penchecks, but I'm wondering who else might be out there to take custody of the funds. Tried to contact Millennium Trust but can't get a call back. Anyone out there have ideas for other service providers?"

"DB plan expected to terminate in 2024. All remaining participants are VTs and all payments/lump sums are expected in 2024. Excess assets are anticipated. There is no possible Qualified Replacement Plan since there are no 'overlapping participants'. Plan sponsor want to maintain the plan's trust into 2025 so that such assets can be applied to anticipated 2025 audit expenses (PBGC audit or other agency). Review of DOL Advisory Opinion 97-03A indicates that reasonable such expenses can be covered by plan assets (at least that is my read of the AO). Since 12/31/24 assets are not zero, a 5500 will be required for 2025 plan year, but little or no other administrative tasks. If, after such audits, any remaining excess assets will be taken as a sponsor reversion, per the plan document.

1. Is it reasonable for the sponsor to maintain the trust in anticipation of expenses?
2. What if (for example), there is no 2025 audit, but the sponsor anticipates a PBGC audit will eventually occur in 2026; is there a time limit over which maintenance of the trust becomes unreasonable or in violation of some other rule?
3. What other concerns have I overlooked?"

"Recently took over a non safe harbor plan and am looking at making two changes to improve the ADP test results. First, the plan has an ACA (not EACA or QACA) and the plan sponsor has agreed to increase the default percentage from 2% to 3% effective immediately. It's a minor change but I figure every little bit helps. Second, the plan uses compensation for the full year and I want to amend to exclude comp before date of entry. Eligibility is no minimum age, 1 YOS, monthly entry. The employer will not be making contributions of any kind this year. Given these circumstances, can the compensation definition be amended mid year, effective for participants entering on or after June 1? There will be no cutbacks with no ER contribution."

"If an employer has recently bundled multiple H&W benefits under one mega wrap plan, do participants have to be supplied with all plan materials that constitute the bundled plan's SPD? Or can the plan administrator provide plan materials that describe only the benefits for which a participant is currently enrolled? For example, if the wrap plan includes M, D, and V, and an employee is only enrolled in the dental benefit, can only the dental materials (e.g., certificate/benefit summary) be supplied along with the wrap's SPD?"