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the instructions on the form 5500 for item 5 are as follows. which category does a 0% vested terminee fall into? certainly not 2, 3 or 4. 1 is for those currently employed . I suppose you could argue they are covered by (a) if they did not have a break in service, but even (b) does not include those who have a deemed distribution Active participants (i.e., any individuals who are currently in employment covered by the plan and who are earning or retaining credited service under the plan). This includes any individuals who are eligible to elect to have the employer make payments under a Code section 401(k) qualified cash or deferred arrangement. Active participants also include any nonvested individuals who are earning or retaining credited service under the plan. This does not include (a) nonvested former employees who have incurred the break in service period specified in the plan or (b) former employees who have received a "cash-out" distribution or deemed distribution of their entire nonforfeitable accrued benefit. Retired or separated participants receiving benefits (i.e., individuals who are retired or separated from employment covered by the plan and who are receiving benefits under the plan). This does not include any individual to whom an insurance company has made an irrevocable commitment to pay all the benefits to which the individual is entitled under the plan. Other retired or separated participants entitled to future benefits (i.e., any individuals who are retired or separated from employment covered by the plan and who are entitled to begin receiving benefits under the plan in the future). This does not include any individual to whom an insurance company has made an irrevocable commitment to pay all the benefits to which the individual is entitled under the plan. Deceased individuals who had one or more beneficiaries who are receiving or are entitled to receive benefits under the plan. This does not include any individual to whom an insurance company has made an irrevocable commitment to pay all the benefits to which the beneficiaries of that individual are entitled under the plan.

In 2018 and 2019, you can give up to $15,000 to someone in a year and generally not have to deal with the IRS about it. If you give more than $15,000 in cash or assets (for example, stocks, land, a new car) in a year to any one person, you need to file a gift tax return. One parent could gift-split with another parent and give $30k in one year without having to file a gift tax return.

Perhaps, this is simplistic, but why don't the parents just write checks each quarter from their personal account and make a gift to him. Son then just writes loan repayment checks.No implications for Company, Plan or other taxes.

Is it really reasonable to conclude that there are control concerns with +/- 30% just because your random sample had that issue? Wouldn't a reasonable approach be that the discrepancies in the random sample trigger a larger sample?

No specific language is required. One concern is that IRA owners be able to identify the source of their IRAs so that they keep inherited IRA funds separate from their own personal IRAs. Another concern is ensuring that the inherited IRA trustee to trustee transfer is recognized (and nontaxable). Per the IRS: "However, the beneficiary can make a trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of the beneficiary." (The source of this isn't Notice 2007-7, which dealt only with transfers from qualified plans to IRAs, but Rev Rev 78-406 and several subsequent private letter rulings which held that IRA to IRA transfers, including inherited IRAs, are not distributions or rollovers.) Your broker's language doesn't even make literal sense, as it seems to have a word missing (presumably "beneficiary") before "of." As Bird suggests, the language is unlikely to invalidate the transfer, as the prior owner is identified, and you have no control over the new broker's titling protocol (if you have anything in writing from them, keep it.) But clearly it would be "better" if they added the word "beneficiary." One other point. You shouldn't get a 1099R from your current broker for this transaction. IRA to IRA transfers generally aren't reportable events if you're not getting any cash. And they aren't reportable by the new broker on Form 5498 either. So the only reportable event will likely be a 1099R when you take the money out of the inherited IRA, and by then maybe your new broker will have fixed its titling problem. Curious about why you "really need" to consolidate this IRA with the new broker...

It's all good. Tax treatment, deductions all are the same from your seat. Relax.

Right, this is effectively giving him a quarterly bonus, presumably grossed up for taxes, with the net amount going to the loan payoff. They can't do it as a tax-deductible contribution. Even if they can give son a plan contribution that would meet coverage and non-discrimination, a contribution is not a loan payment.

Bad is relative. When I started in this business, I worked on a plan that had a history in a class by itself. Fortunately, all of this was well before I worked on this DB plan. Some of the highlights were 1) people who received benefits, but never worked for the plan sponsor, 2) the plan sponsor sold it's office building to the plan and was supposed to pay rent, but never did, 3) the owner of the plan sponsor bought a radio station and when it lost its broadcast license, he sold it to the plan at an inflated price. One of the ERISA Attorneys in the office told me he was at a meeting in DC and an IRS official was talking about a plan that did everything wrong. Halfway through the discussion, he realized they were talking about this plan. The consultant on this one used to say he was the only person associated with this plan for more than 10 years who hadn't been sent to jail. And, he wasn't kidding.

It is done in lieu of refunds. If the calculations support HCE A receiving an ADP refund of $4,000, but they have not used up their full catch-up limit for the year, the $4,000 is reclasssified as catch-up instead of being distributed to HCE A. What should NOT be done is reclassifying catch to all the HCEs at the beginning of the test. just because HCE B only deferred $5,000 and is over age 50, and 100% of their deferral would fit within the catch-up limit does NOT mean it should proactively be classified as catch-up to give them an ADP of 0% to help the test at the beginning. The reclassification to catch-up only only occurs in lieu of refunds. The ADP test is performed AFTER catch-ups are reclassified due to the 402(g) limit. So the scenario only applies to people who are age 50 or older and deferred less than the 402(g) limit + mac catch-up. Hope that helps.