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As these knowledgeable practitioners know very well, there is often a wide chasm of warnings between "can" and "should".

Tom, I'd just like to add a belated but heartfelt and public thanks from the folks at BenefitsLink (Dave, Holly and myself) for all you've contributed over the years. Your wit, wisdom and consistent participation have been invaluable -- you will be missed. Lois

A plan is top heavy free if no other contributions besides deferral and safe harbor Since the plan has a ps contribution, then the plan needs to meet the top heavy while match can apply to satisfy top heavy, if the participant is terminate they would not get top heavy. Maybe what you read somewhere refers to the 3% shnec - it can not be integrated - e.g. 3% base and 3% integrated

No. Can't answer this.

If they terminated and are not employed on the last day of the plan year they do not have to receive the TH-minimum, assuming you are passing 410(b). If they are not receiving the allocation because they failed to work 1000 hours but are employed on the the last day of they plan year they need to receive the TH-minimum. The TH-minimum can be off set on a dollar for dollar basis by any matching contributions they received, if the Plan document allows.

The safe harbor match would satisfy the top heavy minimum IF the sh match is equal to or greater than the full year comp x 3%.

To meet the requirements of 412(e)(3) the plan benefits must be fully provided by guaranteed insurance/annuity contracts. The policy benefits have to be adjusted as the plan's retirement benefit changes, due to changes in compensation for example. In the half-dozen or so I've taken over and converted out of fully-insured, there was never one where the guaranteed policy benefits equaled the projected benefit per the terms of the plan. It was nearly impossible to get necessary information out of insurance companies on the policies. The agents who sold the policies were long gone and another agent who did not get the big commission is now involved but not necessarily the agent of record on the policies. Someone has to deal with all of this as well as the 5500-EZ. It sounds simple, and theoretically it should be. But they seem to go off the rails after a couple years. There could be thousands of these plans working perfectly well that I would never see, so I can't say that my experience is representative of the whole universe of fully insured plans. But even if the plan works fine, and fully insured or not, I still question the economics of life insurance in the plan. I can understand a fully insured plan funded by a guaranteed annuity, essentially that's what a DB plan is, and for someone who wants the guarantee and eventually income they cannot outlive, fine. But I don't see the economic benefit to the participant of the ancillary insured death benefit in a plan. Yes the premiums are paid with pre-tax dollars, so what? If they are just going into the cash value of the policy (with higher expense charges), that's no different than the plan just investing in too-expensive mutual funds. Yes there is a non-taxable death benefit, but only if the current cost of insurance is reported as taxable income by the participant each year. So the cost of the insurance is not "pre-tax". Where's the value for the participant in this? I'd like to see real world case studies, where participants died pre-retirement, where they lived beyond retirement, what they did with the policies. Show me numbers!

2 plans submitted 8/3/2018 (160 lives and 190 lives) letter dated 6/4/2019 780 life plan submitted 3/15/2019 - Still waiting

Well, for one thing, someone has to do a calculation every year to determine the contribution. Also, someone has to cash the giant commission checks on the whole life policy, and some guys at the insurance company need to come up with marketing brochures that make 3% returns on a fixed annuity sound like a good deal. They usually go over that in the Bahamas with their 100 top agents once a year.

If you want to comply with IRS guidelines for self-correction, employee "refusal" is irrelevant, and of course the employer should just open the account and invest the money in the default investment. Are refusals anticipated for legitimate religious reasons which the employer wishes to respect? If so VCP may be worth a shot.

We use: Attention Shan Montoya So far, we have had a 100% success rate of having all 226J ESRPs reduced to zero. (Though it's not solely because of the salutation used, I'm sure) Thanks,

Chaz, the issue is different here. ACA reporting done incorrectly will get a 226J. (Or if it is done correctly, but an employee goes on the exchange and received a PTC). When you do not respond to the 226J, you get a CP220J, which the IRS demands payment. This situation is in regards to late filing. Kmhaab was asking "Since we got a 5699, and responded - we have filed the ACA information late... and we know there is a penalty for late filing, so can I expect a penalty" It has been my experience, that even though you respond to a 5699 by submitting a late ACA filing - doing so will not result in penalty. At least, I have not seen any yet. If you ignore the 5699, you get a 5698, asking for a response in 15 days. If you ignore this as well, you get a a CP215, which is a notice where the IRS demands payment. I hope this has provided clarity. Thanks

This. I’ve heard the “buy life insurance with pre-tax dollars” mantra repeated over and over for nearly 40 years. What I’ve not seen are numerical case studies of how this comes out better for the client than simply buying insurance outside the plan. I’m not anti-life insurance, I own it myself, and had a lot of it when I had four small kids and a big mortgage. It has its place but I’m not convinced that place is a qualified plan. By all means start with owner-only plans, as this would make the best possible case for it.

If you're going to do that, please do it with examples and comparisons using math, not words.

1000 Participant DB plan - 5 component plans. Mailed 6/26/18. Determination letter dated 3/19/19.

For almost all situations, the plan document is superior to any summary of it. But different descriptions could imply there are other documents worth looking for, such as a plan amendment dated somewhere between your 2 dates. If you found such intervening document, it would explain the difference, but not alter my first sentence.

As Sherpa alluded to earlier, will the rank & file have this option? The BRF testing must pass both current and effective availability. Current availability is a mathematical test, which might pass. I'm dubious that in a typical plan with rank & file employees that the "effective availability," which is a facts and circumstances test, will pass. If no rank & file participants, then scratch my comment.

Can this be legal? Sure Search the term real estate on this board for possible practical problems. Things like what if he needs part of this assets value to pay an RMD becasue there isn't enough cash in the plan to pay an RMD. How do you pay a part of a mortgage? You can find plenty of people who work with plans that came to regret these kinds of odd and illiquid investments.

A few concerns - if he later wants to terminate the plan, assuming he wants to roll over, he has to find an independent IRA custodian who will accept the loan as an asset. They exist, but for a fee. Unrelated individual - so not a disqualified person with respect to the plan. Also need to advise client that he is not deriving any other personal benefit by making this loan with plan assets to avoid a PT. Plan assets are supposed to be carried at fair market value, but you say it is a segregated account, so if the valuation is off somewhat, no harm no foul. Fiduciary aspect - is it a good investment, appropriate terms for the risk involved and will the plan still be adequately diversified? Again, segregated account negates most of this as a practical matter, since it is the owner/plan fiduciary investing his own account. If there are other plan participants, presumably they also have the option of making similar investments with their plan accounts? Fiduciary aspects may be a concern here if a R&F participant actually wants to do this. In practice it almost never happens.

700-participant DB plan. 5310 mailed 12/21/18. DL dated 5/24/19. 250-participant DB plan. 5310 mailed 4/13/18. DL dated 8/20/18.