Articles — Ascensus

What is a prohibited transaction under ERISA? What penalties are imposed under ERISA involving prohibited transactions? Are there any exceptions to the prohibited transaction rules?

Abandoned IRAs and State Escheatment

When an IRA is forgotten or abandoned, it can prove problematic from an administrative perspective for IRA custodians, trustees, and issuers. What can these organizations do when this occurs? Can they legally “shed” these IRAs that are owned by unresponsive individuals?

IRA, expertAscensusJanuary 21, 2021Compliance & Operations, IRA, Distribution, Q&A, Reporting, Withholding

Prohibited Transactions Under the Internal Revenue Code

What is a prohibited transaction? Who is a disqualified person? What are the consequences of a prohibited transaction? How is a prohibited transaction corrected?

Your 2020 RMD Waiver Questions Answered

Can an IRA owner roll over a distributed 2020 RMD? Does an IRA beneficiary have to satisfy a year-of-death RMD for 2020? Does an IRA owner have to take an RMD for 2020—despite the waiver—before converting to a Roth IRA in 2020?

Understanding the Annual Additions Limit for Defined Contribution Plans

How much can be contributed each year to a plan participant’s account? What happens if a plan participant exceeds the annual additions limit? What can an employer do to help avoid exceeding the annual additions limit?

Correcting HSA Mistaken Distributions

Can HSA owners repay mistaken distributions from their HSAs? When HSA owners use their HSA assets for nonqualified expenses, are those considered mistaken distributions? What options do they have for correcting these?

HSA, expertAscensusNovember 19, 2020Compliance & Operations, HSA, Distribution, Q&A

More to Consider When Using the New Comparability Profit Sharing Formula

When designing an employer-sponsored retirement plan that uses the new comparability profit sharing contribution allocation formula, your employer clients may want to consider ways to make the formula work better.

When to Use Pre-SECURE vs Post-SECURE Beneficiary Rules

How do you know which beneficiary rules—the ones before the SECURE Act or after—to follow? Which beneficiary options are available if an IRA owner died in 2019 but the financial organization isn’t notified until 2020?

IRA, expertAscensusOctober 15, 2020Compliance & Operations, IRA, Q&A, Beneficiary

Late Deposits of Plan Participant Contributions

How quickly must retirement plan sponsors deposit participant contributions? What are the consequences for late participant contributions? Has the DOL made any changes to its deposit requirements in response to the COVID-19 pandemic?

Successor Beneficiary Options Before and After SECURE

With the changes made to beneficiary options by the SECURE Act, how are payments for successor beneficiaries determined when the original IRA owner died before 2020, versus in 2020 or after? How does the type of beneficiary affect the distribution options?

IRA, Expert, expertAscensusSeptember 17, 2020Compliance & Operations, IRA, Traditional IRA, Roth IRA, Beneficiary, Distribution, Q&A

Paying Plan Expenses from Plan Assets

Can plan-related fees and expenses be paid out of a qualified retirement plan? Which plan account balances may be used to pay plan-related fees? Can a mandatory amendment or restatement fee be paid out of plan assets?

Employer Plan, expertAscensusSeptember 17, 2020Compliance & Operations, Retirement Plan, Qualified Retirement Plan, Q&A

On the Horizon, Cycle 3 Restatement

Qualified retirement plans—including profit sharing, money purchase, and 401(k) plans—receive special tax benefits by meeting the requirements set forth by the IRS. Employers or plan sponsors are responsible for restating their plan documents to avoid a plan qualification failure.

Employer Plan, expertAscensusAugust 20, 2020Documents & Amendments, Qualified Retirement Plan

HSA Distributions After Age 65

When an HSA owner turns 65, must the entire HSA be distributed? Can an HSA owner who is 65 or older use HSA assets to pay Medicare premiums? What happens if an HSA owner age 65 or older uses HSA assets for nonqualified expenses?

HSA, expertAscensusAugust 20, 2020Compliance & Operations, HSA, Contribution, Distribution, Eligibility, Q&A

Know the Rules If Changing a Safe Harbor Plan Mid-Year

Is it possible to reduce or suspend 401(k) or 403(b) safe harbor contributions mid-year? Can a safe harbor 401(k) plan be amended for other plan provisions mid-year? Is it possible to add safe harbor provisions mid-year?

Look Out for These Potential Beneficiary Blunders

Are there any drawbacks to a spouse beneficiary under age 59½ treating an inherited IRA as her own? Can an IRA beneficiary with an IRA distribution check payable to him establish an inherited IRA? What do we do after mistakenly rolling over inherited 401(k) assets to a nonspouse beneficiary’s IRA?

expert, IRAAscensusJune 18, 2020Compliance & Operations, IRA, Traditional IRA, Beneficiary, Distribution, Reporting, Q&A

Recent Disaster Relief Changes with Retirement Plans

How does the recently added safe harbor hardship distribution reason apply for an individual who has been affected by a federally declared disaster? What tax relief is available for retirement plan disaster distributions?

New 10-Year Rule for Beneficiaries Comes with New Considerations

Do all nonspouse beneficiaries have to use the 10-year rule? Are there benefits to the 10-year rule? Are there any special distinctions about the 10-year rule to be aware of?

IRA, expertAscensusMay 21, 2020Compliance & Operations, IRA, Beneficiary, Distribution, Q&A

403(b) Plan Restatement Is Extended Because of Pandemic

What is the 403(b) plan restatement? What is the deadline for restating 403(b) plan documents? What if an employer is unable to restate its 403(b) document timely?