David G. Niggel, ChFC®'s Answers and Guides

Some plans allow participants online access and loans may be modeled and processed through the plan website. Otherwise, you will have to see the plan administrator to obtain a loan application that will be signed and emailed, faxed, or mailed into the Plan Trustee. 401k loans are not always the best route to go, but in a pinch, funds can be accessed fairly easily. If you have exhausted all avenues to obtain the money from other means, try to keep the payback as short as possible.

Loans from 401(k) plans.

Some 401(k) plans permit participants to borrow from the plan. The plan document must specify if loans are permitted.

Generally, if permitted by the plan, a participant may borrow up to 50% of his or her vested account balance up to a maximum of $50,000. The loan must be repaid within 5 years, unless the loan is used to buy the participant’s main home.

Christine,

This seems to be a very common question. I would contact your previous employer and ask the current plan administrator for the steps involved. They will provide you the website address and a temporary login and password. They should also be able to mail your latest available statement at your request.

The next step, would be to Rollover the amount in the 401k to an IRA (Individual Retirement Account) so that you may have better investment options and control over your future. Also, make sure all beneficiary and contingent beneficiaries are designated the way that you desire.

John,

It looks like the Form 5500 is for Plan Year 01/01/2010 — 12/31/2010, which is the most current year available. Plan Year 2011 should be available to the public by sometime close to the end of the year. You could request that the Plan Administrators upload a copy along with any material changes the plan has made to Brightscope as soon as they are available.

The Form 5500 that is available now, shows that there was not a Blackout period. The common two reasons a blackout period occurs is when a plan changes recordkeepers or custodians, or a merger or acquisition occurs involving the plan sponsor which leads to the addition of new participants to a plan. The blackout period is necessary when the aforementioned situations occur, because participants? accounts need to be valued before liquidation or transfer to the new service provider or plan.

Dorinda,

Recently, I found the following on the IRS website for another client;

How long should I keep records?

The length of time you should keep a document depends on the action, expense, or event the document records. Generally, you must keep your records that support an item of income or deductions on a tax return until the period of limitations for that return runs out.

The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or that the IRS can assess additional tax. The below information contains the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period after the return was filed. Returns filed before the due date are treated as filed on the due date.

Note: Keep copies of your filed tax returns. They help in preparing future tax returns and making computations if you file an amended return.

You owe additional tax and situations (2), (3), and (4), below, do not apply to you; keep records for 3 years. You do not report income that you should report, and it is more than 25% of the gross income shown on your return; keep records for 6 years. You file a fraudulent return; keep records indefinitely. You do not file a return; keep records indefinitely. You file a claim for credit or refund* after you file your return; keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. You file a claim for a loss from worthless securities or bad debt deduction; keep records for 7 years. Keep all employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later. The following questions should be applied to each record as you decide whether to keep a document or throw it away.

Are the records connected to assets? Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. You must keep these records to figure any depreciation, amortization, or depletion deduction and to figure the gain or loss when you sell or otherwise dispose of the property.

Generally, if you received property in a nontaxable exchange, your basis in that property is the same as the bases of the property you gave up, increased by any money you paid. You must keep the records on the old property, as well as on the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition.

What should I do with my records for nontax purposes? When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. For example, your insurance company or creditors may require you to keep them longer than the IRS does.

Jevon,

Definition of 'Commingled Trust Fund'

Investment assets that are combined together under a common investment management strategy. Commingled trust funds represent a pool of assets that are jointly managed by the same entity. These funds can be from several sources, such as trusts, retirement plans and individuals as long as each meets the minimum purchase requirements.

I hope that helps,

David Niggel www.keywealthpartners.com

Read more: http://www.investorwords.com/17060/commingled_trust_fund.html#ixzz1uIptju2v

Darla,

You will need to contact your plan administrator. Not all retirement plans offer loans.

Your plan administrator will be able to help you. They should be a valuable resource that is available to answer questions such as this.

Good afternoon,

David Niggel www.keywealthpartners.com

Ty,

Another way to look at plan providers, is to utilize a service that individually benchmarks plans. One that is completely independent.

There are a few, but the one I like is Fiduciary Benchmarks. They can analyze your plan directly.

http://www.fiduciarybenchmarks.com/

Department of Labor regulations under ERISA, and specifically section 408(b)(2), require that plan sponsors obtain fee disclosures for their plan and that all such fees be “reasonable” for the services provided.

Fiduciary Benchmarks, Inc. was launched to support plan sponsors, advisor/consultants, recordkeepers and other plan service providers in addressing this obligation.

Fiduciary Benchmarks Reports can help you document a thorough and objective process and reach well-informed decisions.

If you are currently married, the spouse will receive the proceeds, unless they have signed a spousal consent form giving up their entitled benefit.

I would like to encourage you to seek the advice of an attorney and accountant to make sure that your estate is directed to the beneficiaries of your intentions. They will encourage you to look at all beneficiary forms, such as life insurance and retirement accounts, and update provisions in your will.

David G Niggel

http://www.keywealthpartners.com

An important aspect of performing the ADP and ACP tests is to properly identify the HCEs. IRC section 414(q) defines HCEs to generally include any employee who:

Was a 5% owner at any time during the year or preceding year (a 5% owner is someone who owns more than 5% of the employer), or
For the preceding year had compensation from the employer in excess of $115,000 (for 2012 and 2013; subject to cost-of-living adjustments in later years) and, if the employer elects, was a member of the top-paid group (top 20%) of employees.

Family aggregation rules may affect the treatment of stock owned directly or indirectly by family members. The law treats any individual who is a spouse, child, grandparent or parent of someone who is a 5% owner, or who, together with that individual, would own more than 5% of a company’s stock as a 5% owner. As a 5% owner, each of these individuals is an HCE for the plan year. It's important to identify the family ownership interests of all company stock and to forward that information to the TPA, advisor or persons performing the nondiscrimination tests.

http://www.irs.gov/Retirement-Plans/