Leaderboard

Yes.

If the single employer plan sponsor maintained its own plan for any part of 2019, I would advise to file the late 2019 5500 under DFVCP for the final stub year. Also, the language "converted" to a new plan is not clear. What happened to the prior plan? Terminated? Merged? A "final" 2019 Form 5500 would be required to shut off the single employer plan 5500's. Otherwise the DOL will keep looking for them year after year until a final return is filed.

This is fine as long as you keep the parent in place as the ESOP's plan sponsor. The ESOP can have only one employer security--the parent's stock--and any subsidiaries wholly owned by the parent would simply be incorporated into the parent's stock price.

Opinions are split on whether the division needs to have any legitimate business purpose. In the most recent issue of the Journal of Pension Benefits, Larry Starr suggested splitting up the employee population by last name to avoid an audit.

You need to review the requirements for an 11g amendment. There is not now nor has there ever been a requirement to fail testing before invoking 11g.

Technically one is supposed to use the fair market value of the policy. I suspect that a great majority of plans with insurance use just the cash value though.

I'm not following what exemption from the Form M-1 filing requirement you're relying on here. Brian, EBECatty is referring to the 2020 M-1 instructions, page 2, lower right-hand column: Re the basic question, I have not discussed the < 80% ownership question with a state insurance department, but I have sought informal advice from the Texas Dept. of Insurance regarding the Affiliate Service Group MEWA (e.g., with incorporated partners in a law firm) as well as the "transition services agreement" issue following an M&A transaction (which is another M-1 filing exception for the 410(b)(6)(C) period) and was told that TDI was aware that in these situations a MEWA existed, but it was not an enforcement priority for them.

Not an OE unless the plan document specifies the dates by which the deferrals must be made (which it is not required to do).

The exact text of IRC 401(b)(2), as added by the SECURE Act, is If you have a calendar tax year, and a 10/15 tax filing deadline, then you have up until 10/15/2021 to adopt any plan that you could have adopted on 12/31/2020, this rule aside. Could you have adopted a 2/1/2020-1/31/2021 plan year on 12/31/2020? Sure. Is it a good idea? No comment. Jakyasar, have you asked your actuary about this? What do they think? I know there are some actuaries out there who read the changes made by PPA to have the effect of making the rule under 1.404(a)-14(c) obsolete. Under that reading, the deduction limit is determined for the tax year which contains the end of the plan year only. See 404(o)(1)(A).

If an employee moves from an eligible classification to an ineligible classification, for example from division A to division B, they may be excluded prospectively. Check the plan document, as it should explain what happens when an employee moves from eligible to ineligible classification. For service-based participation conditions, the maximum permissible condition is described in IRC 410(a) - 1 year (1000 hours) of service. If an employee has completed 1000 hours of service then they may not be excluded on the basis of service. They may not be excluded merely because their hours drop below 1000 in a later year.

The cash balance plan can be aggregated with other plans of the employer to pass testing. An executive cash balance plan is quite common.

Maybe there's something in the Contributions/Salary Deferrals section of the document that would address any timing of contributions rule inherent to the document itself, as opposed to an "outside" DOL rule?