"We have an asset sale and a SIMPLE IRA exists. As of the sale, the employees are technically terminated and then may transfer to the buyer. What are the options for the SIMPLE IRA assuming buyer does not want to set up a SH 401k plan? Option 1: the SIMPLE IRA stays with the seller and essentially terminates since employees are terminating and there will be no payroll contributions. Option 2: the buyer could take over the SIMPLE IRA during 2026? The problem with Option 2 is that I do not see how the new buyer can amend the form 5305 or 5304 mid year -- no room for a successor employer on the form. Is this a matter of a Board resolution or asking the IRA custodian to recommend the process?"

[Sponsored]

ADVENTURERS WANTED! Pensions on Peachtree hits Atlanta April 23–24. Join FBLC for a high-stakes expedition through ERISA compliance. Earn CE credits, navigate complex designs, & network with top guides. Your next move is everything. Register now! 

"Contributions made in error can be returned as a 'mistake of fact' (if they qualify) within 12 months of when the mistake was made. But there appears to be an exception for multiemployer plans. Based on what I'm reading in the ERISA Outline Book, 'IRC Section 401(a)(2) provides that a contribution made to a multiemployer plan due to a mistake of fact....may be returned within 6 months after the date that the plan administrator determines that it was made in error'.

"If the plan sponsor of a multiemployer plan submits a contribution in error on 2/1/2026 and they determine it was made in error on 2/15/2026, does that mean the deadline to return it is 8/15/2026? Or do they still have the 12 months from when the mistake occurred?"

"In a profit sharing Plan, a check was issued for the participant's balance to the participant pursuant to his distribution request. At some point (<180 days) after the check was issued, the participant passed away prior to cashing the check. The participant's designated beneficiary in the Plan was their surviving spouse. The spouse and their family is requesting that the check be reissued payable to her. To this point, we've advised the client that at some point when the distribution request was submitted/the check was issued, the funds became the participant's individual assets instead of assets of the Plan's trust, and so any reissues should only be made payable to the name of the participant or their estate to avoid liability for an incorrect distribution of funds. So any question of who the participant's beneficiary in the Plan was/is is irrelevant because the assets are no longer assets for the Participant's account in the Plan. Of course the Plan document seems to be silent on these very fine details.

'The participant's family has spoken with a lawyer (presumably an estate lawyer), and he said that any assets would have to go through probate unless a check is reissued. My thought is whoever is the default executor of the individuals' estate (no will is known of, and this is the only significant asset) should be able to deposit the check in the participant's name into the deceased participant's bank account, and then the funds could be accessed by the spouse (presuming she has access). Thoughts on my/the participant's family/the lawyer's reasoning?"

"For tax years that begin on or after January 1, 2027, SECURE 2022 replaces the saver's credit with the saver's match. An eligible individual claims this 'match' in her Federal income tax return. The US Treasury pays this as a contribution to the eligible individual's applicable retirement savings vehicle, which the individual specifies (in her tax return, we guess). A plan that receives this Treasury contribution may be a Section 401(k) plan, a Section 403(b) plan, a governmental Section 457(b) plan, or an IRA. For any of those, the Treasury's contribution must be credited only to a non-Roth account. A US Treasury contribution is made to a retirement plan only if the plan will accept these contributions, and segregate a separate subaccount for, appropriately credit, and tax-report regarding these Treasury contributions. The US Treasury's contribution is treated as the participant's elective-deferral or individual's IRA contribution, not as a matching or nonelective contribution. But the Treasury's contribution is not available for a hardship or unforeseeable-emergency distribution. Internal Revenue Code (26 U.S.C.) Section 6433, 31 U.S.C. Section 1324(b)(2).

'For an employment-based plan: Is there any big recordkeeper that might be unwilling to provide services to receive and distinctly recordkeep these contributions? Or will all of them fall in?"

"Have a MEP that has been in effect for decades as a closed MEP, and has never with any problem. Recently they allowed a firm that does not satisfy having the same business type which has been making the MEP closed, and I am concerned about the 5500 filing(s). For example, the other firms are all 'butcher shops' while this new firm is an automobile repair shop. Anyway, does this mean every firm has to file a separate 5500 now, or does the plan continue to use one 5500 for the 'closed firms' with the 'open firm' the only firm that needs a separate 5500?"