Nope, this isn’t an article about bad pop songs from the 1980s, but it is about something that can be just as much of a bother – lost participants with remaining balances in your retirement plan. ...
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Plan Distributions
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Facts We added Coronavirus-Related Distributions (CRDs) to our 401(k) plan in 2020, and a number of our participants availed themselves of the new feature. I know they have the option to pay any ...
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Facts Earlier this year, we decided to make the CARES Act coronavirus-related distributions (CRDs) available to participant in our 401(k) plan. We know that it is possible for participants to repay ...
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Facts As a plan sponsor, I want my employees to have access to their retirement accounts in the event of a financial emergency. I know that offering hardship withdrawals could satisfy that goal, but ...
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Facts When a participant requests a distribution from our plan, I provide them with a with a package that includes an election form and a bunch of other information. A participant who terminated and ...
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Facts Over the past several months, our turnaround times for normal business processes have lagged somewhat as we have adjusted operations in response to the various stay-at-home orders. When ...
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Facts Several participants in our 401(k) plan currently have outstanding plan loans, and many others are looking to initiate them. However, given the current pandemic, many participants are concerned ...
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Facts Our 401(k) plan allows participants access to their accounts via hardship distributions and, for those at least age 59 ½, via in-service withdrawals. But with the economic uncertainty of the ...
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Facts Some of our employees are dealing with financial challenges due to the coronavirus situation, and they are asking whether they can access their 401(k) accounts. Our plan allows for loans and ...
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Facts Larry and Kent are both participants in our company’s 401(k) plan. Both recently went back to school on a part-time basis to pursue graduate degrees and will continue working for us. Each of ...
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Facts The CEO (and 5% owner) of our company passed away earlier this year at the age of 73. He started taking his required minimum distributions right on time after reaching age 70 ½. At the time of ...
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Facts Our 401(k) plan allows participants to take loans from their accounts. We have a written policy that describes how the loans work and spells out the requirements that the plan and participants ...
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Facts The annual compliance report that our TPA provided to us indicates that we over-funded matching contributions for certain employees and instructs us to transfer the excess amounts out of the ...
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Facts The participants in my company’s 401(k) plan are regularly inquiring about how much money they have available for a loan. When I report back the amount available to them, it’s not unusual for ...
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Just about anyone who has dealt with a 401(k) plan – either as a plan sponsor or a service provider – for any amount of time has had to deal with the issue of participants not timely cashing plan ...
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Facts We just received our year end testing and it mentioned that we have several terminated participants with small balances that we are required to distribute from the plan. I remember seeing ...
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Facts Our company has several wholly-owned subsidiaries, and each of them has signed onto our 401(k) plan as participating employers. We sold 100% of the stock of one of those subsidiaries – Glen’s ...
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DWC
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Plan Loans & Past Participants: What Happens to a Participant's Loan Balance When They Terminate Employment?
Facts We have a participant who took a loan from his 401(k) account at the beginning of the year. Yesterday, he gave us notice of his resignation, effective in two weeks, but he still has an ...
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Facts Our company sponsors a 401(k) plan. One of our participants lives in the Florida panhandle and lost her home in Hurricane Michael. She is under age 59 ½ and is not eligible to take in-service ...
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Facts I sponsor a 401(k) Plan for myself and my staff. I recently processed a hardship distribution for the purchase of my primary residence in October 2018. I know the rules require me to suspend my ...
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This QOTW has been updated to reflect changes made by the SECURE Act, which was signed into law on December 20, 2019. Participants who were born on or before July 1, 1949, are required to start ...
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DWC
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Breaking News: Hardship Distributions Becoming Even Less of a Hardship Than Previously Expected
Nearly a year after Congress passed changes to the hardship distribution rules in the Bipartisan Budget Act and the Tax Cuts and Jobs Act, the IRS has published proposed regulations to fill in some ...
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This QOTW has been updated to reflect changes made by the SECURE Act, which was signed into law on December 20, 2019. Participants who were born on or before July 1, 1949, are required to start ...
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This QOTW has been updated to reflect changes made by the SECURE Act, which was signed into law on December 20, 2019. Participants who were born on or before July 1, 1949, are required to start ...
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Facts One of the participants in our 401(k) plan submitted a request for a hardship distribution for the purchase of a primary residence. On review of the supporting documentation, we discovered that ...
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Introduction Whether you are starting a new plan or reviewing your current plan design, the key to success is access to knowledge for selecting the best plan.
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Facts One of the participants in our 401(k) plan heard from a friend that it is possible to take money out of a plan while still employed. I’ve always heard that age 59 ½ is the rule of thumb as to ...
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Facts Our company sponsors both a 401(k) plan and a cash balance plan. One of our employees is a strong supporter of a local charity. She does not have a spouse or children, so she would like to name ...
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DWC
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Can a Company Freeze a 401(K) Account if an Employee Is Suspected of Stealing From the Company?
Facts We just discovered that one of our employees has been stealing money from the company for quite some time. We fired him as soon as we discovered the theft, and we are working with the police ...
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DWC
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401(k) Distribution Rules: After Taking a Hardship Distribution, How Quickly Must a Participant Stop 401(k) Contributions?
Facts A participant in our 401(k) plan recently took a hardship distribution. We know we are supposed to suspend his deferrals for six months following the distribution, but we are not entirely clear ...
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Facts One of our employees who was a participant in our 401(k) plan recently passed away. He never submitted a beneficiary designation form; however, since he was married, we understand that his ...
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In the wee hours of this morning, Congress passed a spending bill to end the most recent government shutdown that had just begun at midnight. Although the bill was focused on funding the government ...
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DWC
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How Should a Plan Sponsor Handle Required Minimum Distributions For Missing or Nonresponsive Participants?
Facts One of our employees retired on July 31, 2017 at age 73. During her tenure with the company she was an active participant in the 401(k) plan, accumulating a balance while having never taken a ...
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Facts We have a 401(k) plan that includes several different types of contributions—employee deferrals, a company-provided safe harbor match, and a profit sharing contribution. The plan has a 6-year ...
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Facts We have selected a new recordkeeper for our 401(k) plan. We are told that there will be a period of eight business days when our participants are not able to log in and manage their accounts. ...
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Facts The owner of our company is retiring next year, and the business will close as a result. We sponsor a 401(k) plan that we know we need to terminate, and we want to get started right away so ...
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Facts A participant in our retirement plan just passed away. When we were reviewing our files, we were glad to see that he had completed a beneficiary designation form. On closer review, however, we ...
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Facts One of the participants in our 401(k) plan just applied for a loan for $25,000. He has enough in his account to support the loan, but there is a bit of a wrinkle. We are planning to reorganize ...
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This QOTW has been updated to reflect changes made by the SECURE Act, which was signed into law on December 20, 2019. Participants who were born on or before July 1, 1949, are required to start ...
Read More
DWC
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Do We Need an IRS Favorable Determination Letter for Former Employees to Roll Over Their Balances?
Facts We recently processed a rollover from our 401(k) plan for a former employee who wants to roll her balance into her new employer’s plan. Shortly after the payment was processed, the former ...
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Facts We have a participant who is going through a divorce and told us that he will be submitting a Qualified Domestic Relations Order to assign a portion of his 401(k) account to his ex-spouse. It ...
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What information is required to be reported on the Form 8955-SSA? The form requires the plan sponsor to report any participant who terminated in a prior year and is still due a vested benefit from ...
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What are required minimum distributions (RMDs)? When a taxpayer reaches age a certain age, he or she must begin withdrawing minimum amounts from all tax-favored retirement accounts each year. This ...
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Plan sponsors have the option to allow participants to access their accounts while still employed via a plan loan or an in-service distribution. However, some companies prefer to limit that access so ...
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