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Lockton: https://benefitslink.com/cgi-bin/pr/index.cgi?rm=press_release&id=53530 Northshire Consulting (Chamber of Commerce plans): https://benefitslink.com/cgi-bin/pr/index.cgi?rm=press_release&id=53505 Platinum 401k: https://benefitslink.com/cgi-bin/pr/index.cgi?rm=press_release&id=53488

Not in my world. Why on earth would anyone want to complicate things like that?! Assuming it even says that in the document, which is unlikely.

So the Trustee is going to lend money to someone to purchase the home that the Trustee is going to live in? Do I have that correct? If so, see RatherBeGolfing above.

Sorry, but your merge idea doesn't work. Only an ESOP can have the unallocated share and the related loan. At this point unless they simply want to get rid of one of the plans there isn't much value in a merge that I am seeing. I just thought merging to a KSOP would be simpler because you wouldn't have to deal with the unallocated shares. You could keep the loan and the suspense share in place. Since the goal doesn't focus mostly on getting rid of a plan as much as changing who owns the company a KSOP doesn't make difference. As for the goal of the minority owners slowly taking a majority of the stock by distributing the share from the ESOP and I assume making the shares treasury stock is an interesting one. It would slowly result in the ESOP owning a smaller percentage of the over all stock and the outside owners a larger percentage. You seem to understand this but currently the ESOP being the majority owner gets in effect a premium on the stock price for being the majority owner. When the ESOP's ownership fell to a minority the stock price would get hit with a discount for being a minority owner and all the remaining shares would lose value. I would research if the fiduciaries have to account for that and make some kind of adjustment. I mean this plan would result in loss of value to participants in a plan and it was because of the direct actions of the Plan Administrator and Trustee. They have a duty to not lose the participant's value. I see a possible big fiduciary problem here. Maybe one of the attorneys who come around here who knows ESOPs will opine on that issue. This is going to be complex enough you need a good ERISA attorney who knows ESOPs and doesn't merely dabble in ESOPs. If the current trustee is an inside trustee, and especially if the inside trustee is one of the 2nd generation people who could be seen as having a conflict of interest regarding this, I would look to getting an outside trustee. If they have the ability to simply buy all the shares from the ESOP that would make thing easier but that could take more cash than anyone has at this point.

There's couple of ways to handle this: Luke is correct that they can do a rollover into a self directed inherited IRA. The beneficiaries would established the inherited IRA and then the custodian would make the efforts to retitle the ownership of the deceased to the Custodian FBO beneficiary's IRA. Depending what the Partnership Agreement says, the change of ownership could be as easy as sending a notice and updating the books to reflect the updated ownership of the Partnership. Or the PS Plan allows the beneficiaries to keep the partnership in the plan FBO the beneficiary, the plan can continue to own the partnership and recordkeep the asset. Or if the partnership cannot be assigned to the beneficiaries, then the PS plan will continue to be the owner and will have to wait until the Partnership pays out and is terminated. Which can take years (I've seen Partnership Agreements for 15 years). The one problem I have always run into in this scenario is the required distributions for the beneficiaries. I have argued to various Partnership and LLCs that they have to allow the assignment to beneficiaries b/c of the required distributions. Good luck.

My initial thought is to get an ERISA lawyer who deals with ESOP fiduciary issues to help you. Often in these situations the trustees of the ESOP may be the managers of the company and they may be the ones that are looking to change things around. The ESOP trustees must work solely for the benefit of the ESOP participants,. The DOL has strong opinions on the valuation of ESOP securities and it would be good to have a lawyer that is expert in this area help you. You might need two lawyers -- one for the ESOP trustees and one for the minority shareholders who are trying to get control of the company through the purchase of allocated and unallocated shares from the ESOP.

Agreed.

I really don't disagree with you, but I think you can make a reasonable argument in support of Luke's position as well. Netting them out is just a more conservative position IMO.

As Bird said, it's ok. But I think it's silly. Are there really some 13 year old kids they need to exclude? Just eliminate the age requirement. Usually the 18 & 21 ages are there to exclude high school and college summer help or interns. Not sure an age 14 eligibility requirement accomplishes anything.

Just be sure your client really has a SIMPLE plan. Sometimes they have SIMPLIFIED, i.e. SEP, and they just call it SIMPLE.

It's ok

The new plan will be a spinoff of the old plan. You should be able to continue the old elections for the time being. Are the deferrals going into trust or is the employer just hanging on to them? That's what makes me nervous about your scenario.

You can't have a SIMPLE in the same year as any other plan. The general thinking is that creating a new plan(s) invalidates the SIMPLE, so if contributions have been made...well, that's where it breaks down a bit for me; it's messy and ugly but I think they can be disgorged as excess IRA contributions or perhaps treated as regular IRA contributions if under the appropriate limit (but they went to a SIMPLE not an IRA). But the new plan(s) actually has no problem.

Yes, I understand that the IRS (not just for the Corbel plan document but for many others) has approved plan documents even though they don't comply with the regulation I cited. Anyway, I can't really help you with your original question, Austin.

I don't know if we qualify as a big player or not, but we found that the demand was NOT for a MEP/PEP, but rather to have a way ADVISORS can commonly service their clients, consistently and efficiently. A PEP actually doesn't make economic sense for the service provider unless they have unlimited IT resources to automate everything (I WISH!) - otherwise, there is a lot of manual "combine for this purpose, pull apart for that. We're working on what the advisors want, but it won't be a PEP.

I've never understand how having a plan document allowing any discretion regarding how a contribution is allocated complies with the definite allocation formula requirement of Treas. Reg. 1.401-1(a)(2)(ii) unless there are multiple allocation groups.

Why wouldn't this be a PT?

I've been involved with insurance in plans for a number of years. Usually it doesn't make sense. Almost every time it involves the agent using the plan money because it's easier than getting the insured to write a check. The "seasoned money" is a term of art meaning "money available for withdrawal" and using that money to pay for life insurance just means that you can exceed the incidental limits without disqualifying the plan. Taxes are still due because it's equivalent to an inservice withdrawal. You seem to be using that amount however to then calculate the incidental limits. And those are based on cumulative premiums, not annual premiums. The loan availability will likely change drastically if you spend as much as you're indicating on life insurance. Lots of moving parts.