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I'm hoping to get others' input on the correct standard for the future performance of substantial services under 457(f) for non-elective employer payments. Under section 1.457-12(e)(1)(ii) of the proposed regulations, "the determination of whether an amount of compensation is conditioned on the future performance of substantial services is based on the relevant facts and circumstances, such as whether the hours required to be performed during the relevant period are substantial in relation to the amount of compensation." There is no minimum vesting period in the proposed regulations or preamble. When adding to current compensation or extending a substantial risk of forfeiture, proposed regulation 1.457-12(e)(2)(iii) requires performance of at least two years of future substantial services. Under example 1 in proposed regulation 1.457-12(e)(3), a one-year (January to January) vesting period is implemented, which goes unmentioned as the example is aimed at an insubstantial amount of post-termination consulting services. One would think that if a two-year minimum deferral were required to begin with, the example would not need to resort to measuring the amount of work performed during the one-year period (or would use a longer duration). But the general substantial risk of forfeiture rule only looks at the amount of work performed, not the duration of the future services. I know there has been a general rule of thumb stemming from section 83 that a minimum two-year deferral period is required to validly delay a substantial risk of forfeiture. While it may be a matter of degree, I'm interested to hear others' takes on the following, all non-elective employer payments, all outside the short-term deferral date if the substantial risk of forfeiture is deemed not to take hold because it's less than two years: On July 1, 2021, employer awards employee a bonus payable on June 30, 2022, provided they remain employed full-time until the date of payment. On December 1, 2021, employer awards employee a bonus payable on June 30, 2022, provided they remain employed full-time until the date of payment. On December 1, 2021, employer awards employee a bonus payable on June 30, 2023, provided they remain employed full-time until the date of payment. On December 1, 2021, employer awards employee two separate bonuses, one payable on June 30, 2022, and one payable on June 30, 2023, provided they remain employed until each separate payment date. On December 1, 2021, employer awards employee five separate bonuses, one payable on each succeeding June 30, provided they remain employed until each separate payment date. Would anyone argue that some or all of these would immediately vest and be taxed on July 1, 2021, or December 1, 2021, as the case may be?

Does the document address it? Our VS document includes multiple employer plan language, but it doesn't address this. I don't see anything in our reference materials on it either. I'll give it a try. The reason you have a separate ADP/ACP test for unrelated employers in the MEP is the definition of "plan" in the 401(k) regs that incorporates the mandatory disaggregation and permissive aggregation rules of 1.410(b)-7. [see 1.401(k)-4(b)(4)] . Looking at the catch-up regs, you'll see the term "applicable employer plan" throughout. It's defined in 1.414(v)-1(g)(1). In particular, the catch-up limit applies to an "applicable employer plan". I don't see anything in the catch-up regulations that incorporates 1.410(b)-7, so it appears to me that the term "applicable employer plan" is referring to the MEP plan as a whole. That would mean a single $6,500 catch-up limit for the entire MEP. If the participant were in two separate plans of unrelated employers, it's clear that the catch-up determination in one plan doesn't affect the catch-up determination in the other unrelated plan. It's a different result because there would be two unrelated applicable employer plans, not a single plan.

After an hour on hold (thank goodness for speaker phones!), the agent was able to tell us that the ID we had was in fact for an old, terminated Money Purchase Plan. It was inactive. But instead of the rigamarole of re-activating and re-titling it, we are just gonna get a brand new ID via online SS4.

From what you described, I take it this was an asset sale? If it was a stock sale, then the new employer would have issues maintaining their existing 401(k) plan after the termination of the old employer's plan due to the successor plan rule. Since it's an asset sale, the employee had a termination of employment with the old employer, and consequently must take and RMD from the old employer's plan for the 2021 calendar year. If she rolls over the rest of her balance into the new employer's plan, she will not need another RMD until she terminates employment with the new employer.

But they can and will deactivate it. Calling that number is not as hopeless as you might think. If it has been deactivate, there is a procedure (basically faxing over a request to re-activate); see sample letter below. As a side note, if you are using EFAST, that system can and will essentially disable a TIN for its own purposes, and you might have to reinstall the software and start over and "add" it as if it were a new plan. No fun. EP Entity Control Unit Internal Revenue Service Via Fax: 801 620-6900 Re: xxx Inc. Profit Sharing Plan EIN: xx-xxxxxxx To whom it may concern: Our EIN for the above named retirement plan has been inactivated. Please re activate the EIN for our plan. The details are as follows: Name of Plan: xxx Inc. Profit Sharing Plan EIN: xx-xxxxxxx Address: xxxxx, Inc. xxxxx xxxxxxx Responsible person: (Trustee) Telephone number: xxx xxx-xxxx If anything further is needed please contact me, or our third party administrator: xxxxxxxxxxxxx Sincerely, (Trustee)

I have encountered this in the past. If the reason RMDs were not made was because the recordkeeper failed to implement them, mention that and the IRS should accept it. If the real reason that the RMDs were not taken was because the owner did not want to receive them, then they are unlikely to waive the excise tax. It has to be something under the control of a third party vendor such as a recordkeeper or trustee and not because the owner did not want them or an HR employee was told not to make them for fear of having the owner cut their budget.