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Bill channeling his inner @Mike Preston 😀

When the time comes and with some exceptions, a non-governmental § 401(k) plan must (to tax-qualify) permit an employee to make elective deferrals if the employee has at least 500 hours of service a year in at least three consecutive years and has met the plan’s age requirement (for example, 21) by the end of the three-consecutive-year period. A plan need not provide nonelective or matching contributions for such a long-term part-time employee. Relief from nondiscrimination and top-heavy rules applies only regarding “employees who are eligible to participate in the [§ 401(k)] arrangement solely by reason of [§ 401(k)](2)(D)(ii)[.]” I.R.C. (26 U.S.C.) § 401(k)(15)(B)(i); accord § 401(k)(15)(B)(ii). Some employers are considering simplifying a new provision by making all employees, with no age or service condition, eligible for elective deferrals (without providing a nonelective or matching contribution). If an employer in its particular circumstances is not worried about coverage, nondiscrimination, and top-heavy rules: Is there some other reason an employer should consider not extending elective deferrals to all employees?

AJC, C.B. Zeller is correct, but maybe not providing the complete picture. It would be possible, but as C.B. Zeller implies, the main plan would have to permit similar investments. If the partner who wants to invest in bitcoin and gold would be consent with ETF's that invested in those assets (and there are some), then it might be possible to achieve just by adding a brokerage window to the existing plan.

Does copy-and-pasting an unsourced quote 2x in the same post make it more true? What's your stake in this? Do you just have it out for teachers? Edit: I see you cleaned up your post. Still, I am curious about the source of the Q&A and comment that you posted. If you truly believe that the New York Department of Taxation and Finance are failing to uphold the law of the State of New York, then I would imagine your only recourse would be to sue them in the state's supreme court. Since you haven't been forthcoming about your relation to the topic I don't know if you would have standing to sue. Honestly I am having trouble coming up with a scenario where anyone would have standing to sue, even if your claim is true.

I'd say a majority of plans are needlessly restrictive when it comes to limiting employee entry into the 401k plan. I always start with the idea of nearly immediate entry and then see if concerns (like those mentioned above) would guide to more restrictive entry. I promote to plan sponsors that long wait times are very damaging to employees ability to save for retirement using qualified plans and unless actual plan specific reasons exist to limit (like those already mentioned) then it is generally easier and better for the employer to have quick entry. I remind them that entry and eligibility rules were put in place pre-computer systems.

In addition, if a partnership, the partners should not be getting any W-2's.

What does this mean? Are you doing a floor-offset plan? Yes, the owner's son has to be included in the general test, even if he gets no accrual in the cash balance plan. Consider amending the 401(k) plan to not provide the safe harbor non-elective contribution to HCEs, then he won't receive an allocation at all and his EBAR will be 0. Also see if you can use component testing to put him in a rate group tested on allocation rates, preferably with some older NHCEs whose EBARs aren't helping the owner. It's possible, if you can use component testing, but not guaranteed. If the plan will be exempt from PBGC coverage then their profit sharing contribution will probably be smaller than they are used to due to the combined deduction limit.

Per the regulations (1.401(k)-2(c)(2)(iii) "a plan is a successor plan if 50% or more of the eligible employees for the first plan year were eligible employees under a qualified cash or deferred arrangement maintained by the employer in the prior year." For most purposes, a pre-SECURE Act MEP is treated as single-employer plan maintained by an employer with respect to employees of a specific employer. So I think you use the ADP of the year before spinoff.

I agree with @Kevin C, it is a numbers game for those close(ish) to audit territory. The regulatory agencies are aware of this and Im cautiously optimistic that we will have a solution before we are actually required to bring the LTPT EEs into the plans. Other consideration: Possible impact on fees Extra administrative work (especially if plan responsibilities are simply added to an employees existing workload - includes everything from more paperwork for new employees, enrollment, notices, distributions, possible missing participants, etc.

FWIW - 2019 5500-SF one man was accepted by EFAST with acknowledgment file in case anyone else runs into this situation. Thanks Bird.

QDROphile states my thoughts much better than I could. As corollary (and his implication), there may be action against the EX for failing to disclose. For example, check your property settlement (maybe not divorce agreement, maybe not QDRO) for language something like (emphasis added): Ya know, judges don't like it when people tell lies.

I have no particular quarrel with what is posted above, But the responses other than from Bill Presson presume that you are just dealing with the substance of a domestic relations order to divide the pension. To get there, you have to re-open or start a new domestics relations proceeding to capture the marital asset that was left out of the original proceeding. That requires expertise in state domestic relations law and the omission may affect what the court would be willing to award you as a supplement to the original property division. Your original lawyer might be the person you need, or you may wish to engage someone else, in addition to the QDRO expertise mentioned above.

Just a hunch: this question is asked because prior situations have not done it correctly. Check EPCRS?

You can’t elect a lump sum without waiving an annuity form of payment, one that would be payable now instead of the lump sum. So yes, you show the options and yes, offer the annuity. I’d check the document again on the forms actually available for payment.

No.

You may also have an action against your divorce attorney if they didn't find out about this. A pension is pretty hard to hide in a divorce.

Find yourself a lawyer well-versed in QDROs. NOT the financial guy. There are a lot of moving parts to a DRO regarding a pension plan.

No. They are aggregated for 415 limit purposes however.

Presumably this is a self-directed plan. I think the loan could be recourse against the account and other assets of the account could be pledged. But completely agree that usually completely impractical. Some lenders that specialize in this will do for IRAs, but with a qualified plan with multiple participants, even self-directed, the paperwork would be novel and complicated, scaring off most lenders, if not the plan sponsor.

514(c)(9).

Plans can take out loan but it has to be a non-recourse loan. They can't use anything as collateral and the loan must be made strictly on the merits of the property (e.g. you can't look at credit score or income of the participant). And assuming income is generated from the property, there will be UDFI (a segment of UBIT) owed by the plan. There are some banks that specifically do non-recourse loans