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  2. 5500-EZ Single Member LLC & Sole Prop

    We use what's called a "Supplemental Participation Agreement" where the new "Participating Employer" agrees to a whole bunch of things. It is signed by BOTH employers and the trustees as well. Here are the terms: 1. Wherever a right or obligation is imposed upon the Employer by the terms of the Plan, the same shall extend to the Participating Employer as the "Employer" under the Plan and shall be separate and distinct from that imposed upon the Employer. It is the intention of the parties that the Participating Employer shall be a party to the Plan and treated in all respects as the Employer thereunder, with its employees to be considered as the Employees or Participants, as the case may be, thereunder. However, the participation of the Participating Employer in the Plan shall in no way diminish, augment, modify, or in any way affect the rights and duties of the Employer, its Employees, or Participants, under the Plan. 2. The Trustees hereby agree to receive and allocate contributions made to the Plan by the Employer and by the Participating Employer, as well as to do and perform all acts that are necessary to keep records and accounts of all funds held for Participants who are Employees of the respective employers. 3. The execution of the Agreement by the Participating Employer shall be construed as the adoption of the Plan in every respect as if said Plan had this date been executed between the Participating Employer and the Trustees, except as otherwise expressly provided herein or in any amendment that may subsequently be adopted hereto. 4. All actions required by the Plan and Trust to be taken by the Employer shall be effective with respect to the Participating Employer if taken by the Employer and pursuant to Plan Section 11.3, the Participating Employer hereby irrevocably designates the Employer as its agent for such purposes. 5. The Fiscal Year of the Participating Employer means the Participating Employer’s accounting year of twelve (12) months commencing on January 1 of each year and ending on the following December 31 .
  3. What Mike said. The contracts have to be valued at fair market value, not CSV.
  4. An employer may not wish to ignore complaints grounded in good faith religious beliefs, even if it could ignore them without any legal risks. Employers have many more HR concerns than simply what is legal and what isn't. The point being if an employer can respond to a good faith religious objection to the employee's satisfaction without placing the plan's qualified status at risk, and without over-complicating plan administration, the employer may wish to hear some ideas.
  5. Do we need a Schedule B?

    I don't see how the PBGC would care. It was a standard termination, right? The implication is that without this $900 the plan paid everybody out what they were entitled to, right? So this $900 effectively were excess assets to be allocated amongst the 12 participants, right? If right, right, right then the PBGC won't care because they NEVER care about the allocation of excess assets.
  6. Do we need a Schedule B?

    Thanks Mike. I corrected the typo. Also, I think we need to talk to the PBGC.
  7. Today
  8. Employer pays distributions

    Pooled account plan. No other contributions for the year (2017). I prepared distribution paperwork and employer wrote checks from a company account. Now he wants the plan to reimburse the company (no WAY)! If I treat as contribution/distribution, I think I need to allocate the contribution to all eligibles.(?)
  9. calculating an RMD

    $0/X = $0.00 where X is the MDIB factor.
  10. Do we need a Schedule B?

    It depends on how the Plan Administrator chooses amongst its options. First, you typed XYZ when you meant ABC. No matter. The key issue is whether the Plan Administrator treats the plan as terminated on the original termination date or whether, pursuant to Rev. Rul. 89-87 the original termination date is lost. Obviously a job for ERISA counsel here, but I would be surprised if the termination date didn't hold. If so, no SB for 2018.
  11. I'm not sure what went on here: Did the company pay for distributions from the plan out of their own pocket first? Like, termination or in-service distributions? Or did the company give the participants their profit sharing contributions right to them instead of putting them into the plan? Some companies call their profit sharing contributions to a plan a profit sharing distribution (because they are distributing company money among the employees/participants).
  12. This is a follow up to my last post. Can we change the distribution schedule for terminated participants? Our SPD provides that any changes to the Distribution Policy apply to distributions occurring after the amendment, even if your employment terminated before the amendment to the policy. Is this ok? What about for participants in pay status? For example, I terminate (not retirement, death, or disability) and the Policy says I get 5 annual installments beginning at the end of the year following my termination. I receive two installments. The Policy is changed to 5 annual installments beginning at the end of the 5th year following my termination. How does the new policy apply to me? Since I have already received 2 installments, do I then just get 3 installments beginning on the last day of the 5th year? Or do I get 3 installments two years following the last day (i.e. I'm treated as having received the first two, so I just get the last 3)? Or can we not change the payment schedule for people in pay status once the first installment has been paid?
  13. Employer pays distributions

    Pooled plan or individually directed. Might require a bit more administrative gymnastics if the latter, but still doable.
  14. 415 Limit Solutions

    SoCal.... people are missing the point of the OP. The methodology described is a variant on the springing cash value gambit. Invent a policy with a surrender charge. Pretend that the amount being treated as a taxable distribution is the amount that would be distributed from the annuity immediately after purchase where the surrender charge is in full force and effect. Provide for the elimination of the surrender charge over time along with the ability to convert to a lump sum at some time in the future when the surrender charge will be eliminated. Magic, right? Wrong. It doesn't work. It is malpractice to suggest it. Strong letter to follow.
  15. Do we need a Schedule B?

    Do you need a 5500 for the 2018 PY? I don't know, but there does not seem to be any requirement for the Schedule SB.
  16. Affiliated Service

    ASG rules use 318 attribution for ownership, so the age 21/50%ownership stuff does not apply. But even still I don't see an Affilliated Service group since these are not service businesses and there is no suggestion of any affiliation anyway. If my father was a CPA and owned 100% of a CPA practice, and I too owned 100% of my own CPA practice (no overlap whatsoever in the businesses), that is not a controlled group or an affiliated service group. I think everyone would agree without hesitation that this is so. If you go back and read the OP there is absolutely no relevant distinction between my example and the OP. A shared employee is certainly not enough to change this outcome.
  17. I agree with David Rigby. Employees do not have to "agree" to have accounts set up for them in DC plans with employer nonelective contributions. The problem comes when s/he terminates. Hopefully, the cashout provisions will permit rolling this out to an IRA. I had an employee eligible for a plan with a 3 to 1 match once who refused to sign up for the plan because he didn't want the government to "find" him. We all tried valiantly to explain that if they were looking, they had already found him but alas! He walked away from this wonderful match.
  18. Plan Continuation After Change in Control Payout

    I don't agree that this is what is being discussed here. The cited provision is the voluntary termination and liquidation of a plan. I have seen plans that specify a mandatory lump sum upon change in control but, absent termination of the plan under 1.409A-3(j)(4)(ix)(B), I would say any elected deferrals must continue; cancellation of deferrals upon change in control would be an impermissible acceleration.
  19. I feel like I should know this answer, but I'm not coming up with it. Participant terminates employment at age 69 and rolls her balance to an IRA before the end of the year. After the first of the year, the employer deposits a discretionary contribution to the account. Participant will be 70 1/2 in the year of the deposit. I know her RMD must be the first money out, but with a zero balance at the end of the prior year, I don't remember how to calculate it.
  20. "We made changes to your...Form 5500"

    first born
  21. 457(f) plan for a cooperative?

    Recommend asking the CPA. Some of them are tax-exempt but not under 501(c), so most likely not subject to 457(f).
  22. Change in Distribution Policy

    Yes, thanks ESOP guy! You're absolutely right, and I'll make sure to include those requirements. Thanks!
  23. Change in Distribution Policy

    That makes sense. One other practical consideration. Say we have an "all other" person (termed but not for retirement, death, or disability) who has already terminated and has received two installments beginning one year following termination. Now we have a new policy that says the "all other" people are to receive 5 installments beginning on the last day of the 6th year following the year of termination. How does the new policy apply to that person? Since they have already received 2 installments, do we just do 3 installments beginning on the last day of the 6th year? Or do we start 3 installments two years following the last day of the 6th year, since he's already received 2 installments? Or can we not change the payment schedule once the first installment has been paid?
  24. I am more concerned by the idea you aren't going to pay anyone until NRA, death, disability or diversification. Unless there is a loan that purchased all the shares in the plan don't you have to offer a distribution after the 5th year after termination?
  25. Change in Distribution Policy

    Employer's Cash flow distress would be a valid reason. Perhaps the employer is in violation (or potential violation) of the certain bank loan covenants, etc. Perhaps the ESOP trustee(s) working with the board of directors of the company would determine that necessary contributions to the ESOP for funding the Repurchase could jeopardize the business operations. The appropriate analysis would be made and documented and the change (amendment to) in policy would be communicated to the ESOP Participants. Again, none of this should be done without review of all facts. I believe the facts relating to the interest of the ESOP Participants should be considered as well. Participants who are in death. disability or retirement status, perhaps the policy does not change for them. Maybe the policy is amended for only those in the "all others" category.
  26. 415 Limit Solutions

    Generally, I have encountered this argument as one in which the lifetime maximum benefit is funded by a product with an under-performing investment and a level of sales and administrative expense. The alternative is to pay the maximum lump sum, roll to an investment account, and then earn market rates of return, resulting in more money in the beneficiary's hands. The surplus funds remain in the pension plan unless there is no remaining plan sponsor, until the funds can be used to fund someone else's retirement, like a relative, or a successor to the business, or a replacement plan. If no other choice, then pay the excise tax.
  27. Plan Continuation After Change in Control Payout

    Correct, but the plan would not be terminated, and the distribution would not be based on a termination/liquidation. It would just be based on a CIC as a permissible payment event. There's nothing requiring that a plan MUST be terminated upon a CIC, just that it MAY be terminated without running afoul of the acceleration rules.
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