"Plan is terminating and there is a participant who has an existing loan. In my experience they have two options: [1] Pay the loan back in full [2] Default on the loan. Someone is asking if they have the option to repay the loan back to their IRA, assuming they are rolling their balance into an IRA. I know what my gut is telling me, but I just wanted to make sure this isn't a viable option."

"We know that one cannot use Form 5305 SEP if 'Currently maintain any other qualified retirement plan. This does not prevent you from maintaining another SEP.' [1] Can anyone explain the logic behind these instructions or give a reference to the legislative history/sections of the Code which resulted in such? [2] These instructions clearly indicate you cannot establish the SEP if DB exists but why do practitioners decide it is prohibited to establish a DB plan if SEP already existed? [3] What is the meaning of the word maintain' in this context? Is it in the context of 'existing' or 'deduction'? In other words, is it OK to establish a new DB Plan in 2024 effective for 2023 (when SEP existed) but not take any deductions for contributions made to DB Plan for 2023? [4] What are the ramifications if a taxpayer ends up having SEP and DB Plan for 2023 (with no deduction is taken for DB contributions for 2023 tax year)? What exactly is the nature of the failure and what are the penalties?"

"My father was a state employee and participant in a 457(b) plan. When he passed away my sister and I were named beneficiaries. We each inherited 50% of our father's account. I rolled my account over to Vanguard. My sister kept her account with the plan. We both received RMDs each year due to my father's age. The plan proactively asked my sister for a beneficiary designation. My sister responded and named me as her beneficiary. On every quarterly statement my sister received I was listed as her beneficiary. Unfortunately, my sister passed away. She was never married and without children. She was ill for a number of years before she passed. I was her caregiver.

"My sister has a will and a living trust. She also has a document that lists accounts where I was listed as her beneficiary. Her inherited 457(b) account is on that list and I am listed as her beneficiary. When I called the plan to notify them of my sister's passing the plan confirmed on multiple recorded calls that my sister named me as her beneficiary and the plan accepted her beneficiary designation. Again, her beneficiary designation appears on every quarterly statement. I had planned to roll this account over to Vanguard. I called the plan with a couple of questions about the withdrawal form. The form is a mess (I have since learned that the withdrawal form doesn't conform with the terms of the plan document.) A supervisor called to respond to my questions about the withdrawal form and told me that the plan doesn't allow for a beneficiary to name a beneficiary. The terms of the plan state that a lump sum will be paid to my sister's estate....

"Does anyone have any advice? My sister intended for me to be able to maintain this account in a tax deferred status. Instead, the plan says it will make a lump sum payment to my sister's estate. I believe the plan's errors led to this issue. In my eyes as a layperson, the denial letter they sent and the plan document are carelessly written."

"Retired participant had reached RBD in the later 20-teens and began taking RMDs on schedule. He passed away in 2021 and his wife elected to leave the funds in an account in the plan in her name until she could decide what to do with them. As she was not yet RMD age, she did not take RMDS in '21, '22, and 23. She is now 73 years of age and wants to roll her funds out of the plan into an IRA. We're of two minds on exactly which RMDs are missed. On one side, it is argued that only '21 is missed, as since he was in pay status that year's RMD should have still come out, and she'll need one '24 since she is now of RMD age. On the other side, it is argued that '21, '22, and '23 were all missed, as since he was in pay status at the time of his death in 2021. Anyone feel particularly strongly about either side? The Plan Document does not appear to provide a definite answer to this specific situation."

"We have a business with only one eligible employee other than the owner.. For 2022 this employees was fully covered by the 3% nonelective safe harbor and profit sharing. For 2023, the person worked about 50 hours and earned $1,000 and terminated before the end of 2023. So the employee will get the safe harbor. What about the rule -- if terminated and less than 501 hours can be excluded from coverage testing? The question is profit sharing. The owner is getting high PS%. I know PS for this employee is miniscule. Still for my own knowledge, what is the rule here? I know if I put this into our admin system it will say fail 401(a)(4). So the term with <501 hours apparently does not apply to 401(a)(4). That's fine. I just wanted to nail down this rule. It could be more meaningful rule in a larger plan to exempt this one person from 401(b) but still be able to pass 401(a)(4) due to all the other employees receiving PS."

"Is there a reason we have to abide by the 25% DC Comp deductibility limit when the plan is a 403(b) and the sponsor is a church which does not pay taxes?"

"In the past 2 weeks 2 clients have received plan audit notices. Thankfully they are only PS plans, nothing more. But get this....I just received a call from the 2nd client who got the audit notice. He is in the hospital following a blind fall down the stairs in the dark in the middle of the night. He is in rehab with a concussion, 2 fractured vertebrae, and cracked ribs. Poor guy, he just retired last month! 80 years old! So he called the agent conducting the audit explained the situation and requested the audit be postponed and the agent said no! He said to give someone power of attorney. Is it unreasonable to request the audit be postponed? Is this normal that the IRS would not grant a postponement based on these circumstances?"

"This has probably been asked previously, but I can not locate. This concerns a sole proprietor that maintains a 401(k)/PSP for the benefit of his company. Of the net income derived from the sole proprietorship, stepping aside the calculation of any profit sharing for the non-owners, how can one determine what the owner's deferrals are (if there are any), vs if the contribution is to be considered an employer contribution (profit sharing)? Why am I thinking that unless the sole proprietor makes an election, prior to 12/31, the contribution must be considered an employer contribution?? Any other references or thoughts on this subject?"

"If a client is paying out of pocket (not from plan assets) for a whole life policy, but for some reason has named the plan as primary beneficiary of the policy, is the plan entitled to the cash surrender value? Do any loans from the policy need to be reported? I've seen plans buy life insurance before but never have seen someone buy life insurance and name the plan so I'm not sure what the reporting requirements are."

"We have a small S-Corp with a 50+ year history and have offered a SIMPLE plan to our employees for over 10 years. This was at Fidelity for most of that time, but mid-2023 they cancelled our plan and would not accept any additional deposits. We asked what we did wrong or why we would be cancelled and got no answer. During the 5 months it took to setup an account at Schwab, the business withheld the funds for employees that were earmarked for Simple contributions. This was done with each employee's written approval. In Feb-2024 we finally got Schwab all setup and employees established accounts. We were able to send the 5 months of back contributions, and current payroll cycle, and now we have received another plan-cancellation letter. In reaching to Schwab, again no reason provided. We are at a loss about what the issue is, but we appear to be on some type of 'black-list' that plan administrators don't want as customers, but we have no idea how to move forward. Does anyone have any suggestions on what could be causing this? Is there any other way our business can help our employees fund their retirement. We went the Simple route since it was low cost to setup and manage. Are there other types of plans we should explore, or are their retirement consultant agencies that might be retained to get answers from Fidelity / Schwab on what this issue is."

"We have a Cash Balance Plan that is terminating in 2024. I believe we still need to complete the Cycle 3 restatement document, since we are already in the window, but I just wanted to confirm."

"Let's say company A is a related and participating employer in Plan X which is a safe harbor plan with the basic match formula. Company A is purchased mid 2024 in an asset sale so all employees will be terminated from Company A. They have a distributable event. If the buyer has their own 401k plan that is not safe harbor, are there any spin off options mid year for that portion of Company X plan that is attributable to employees of A? Do we have safe harbor concerns where we should suggest a spin off as of end of plan year in order to not violate 2024 safe harbor status."