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Reporting to SSA sounds like they simply reported you as a code A on Form 8955-SSA because you had not received a distribution of all assets by the and of the year following the year of termination. This just means that the plan still holds assets for your benefit. Unless you receive a distribution of those assets AND the employer reports that distribution to SSA, the SSA will send you a letter at age 65 saying you may have retirement assets in the following plan(s).

True dat.

Saying it and getting it done are two different things. 😁

He already said plan is starting today.

The only issue I see is that it has to start tomorrow if it's a 2021 calendar year plan.

I don't see anything that comes close to a problem.

The 25% is measured against the total compensation. Assuming max for owner, the owner is getting 13.2759% and would therefore have to allocate at least that same percentage for both SIL and daughter ($12,081.07 and $3,186.22, assuming SIL comp is 91k and that daughter is a participant in the plan). Max to SIL and daughter would be 25% * ($290k + 91k + 24k) = $101,250 - $38,500 = $62,750. This would end up getting SIL to $38,500 and daughter to $24,000. Assumes daughter has no 401(k) deferral and that SIL defers max.

What is the reason that they want to make it effective 1/1/2021? Just so they can potentially decide to make a contribution for 2021 at a later date? If so, then I think it works. If it is for some other reason, maybe yes, maybe no.

Yeah, coffee hadn't kicked in yet. (My standard excuse for being dense...)

C.B. Zeller, thank you for your help in the earlier conversation, and for reminding us about it. (BTG, my posts in the earlier conversation and above, taken together, explain how 408b-2 and 404a-5 disclosure rules need not be an impediment.) It seems many big recordkeepers lack a business interest in facilitating payments to unaffiliated investment advisers, until enough plan sponsors demand that service and have the bargaining power to motivate the recordkeeper to build it.

An earlier discussion on this topic, that does address the fee disclosure question:

Here’s the ERISA rule that recognizes using a distinct summary plan description for each class of participants and beneficiaries. https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-C/part-2520/subpart-B/section-2520.102-4

I respectfully disagree with ERISA-Atty. Suppose the individual has never had a Roth IRA, and the designated Roth account in the 401(k) Plan (which had satisfied the 5-year period while in the 401(k)) is rolled to a new Roth IRA. The 5-year period begins when the Roth IRA is established in this situation. See 1.408A-10, Q&A-4. It gives examples of how all this works. Sorry - I hadn't read Luke's post - he already provided the references!

Which would be a rational way to approach the issues, but I have been unable to find any authority for that outcome. Thinking outside of published authority, I can understand that the “age” of the Roth IRA controls rather than the age of the incoming rollover. It is much less administrative burden on the IRA provider to measure only from the inception of the IRA, which is within the records of the provider. If outside money determines the time compliance of the funds in the IRA, the IRA provider is put in a more difficult position to understand and verify the age of the outside money.

For an ERISA-governed individual-account retirement plan that provides participant-directed investment, such a plan’s fiduciary could allow directing participants to select, individually, one’s investment adviser, and to direct payment of a reasonable investment-advisory fee with a charge against the directing participant’s individual account. A fiduciary allowing such an arrangement might (i) restrict it to registered investment advisers; (ii) restrict it to advisers that commit to the allowing fiduciary’s terms, including assurances about delivering initial and updated ERISA § 408(b)(2) disclosures to the allowing fiduciary; (iii) require a directing participant to certify that she received all disclosures required under investment-adviser law and ERISA § 408(b)(2); (iv) set a maximum on the investment adviser’s fee a participant may direct, and (v) require that the fee be charged in a format and on an interval the fiduciary finds efficient for the plan’s administration with the recordkeeper’s services. I’m unaware of an ERISA Advisory Opinion that speaks to the question BTG asked. But there are tax-law rulings that support paying an investment adviser engaged by an individual, rather than by an employer plan’s fiduciary. In Letter Ruling 93-16-042 (January 27, 1993), the IRS assured a participant that quarter-yearly payments of her investment adviser’s fee would not tax-disqualify her § 403(b) contract, would not be distributions, and thus would have no tax consequences. The IRS treated the investment adviser’s fee as analogous to a trustee’s fee incurred by a § 401(a) plan. Under the investment-advisory agreement and § 403(b) contract presented in the ruling request, each individual participant would engage the investment adviser, and instruct her § 403(b) contract issuer to pay the investment adviser’s fee and count those payments as charges against the § 403(b) contract’s account balance. (For a § 403(b) arrangement, an annuity contract or custodial account fills the function of what otherwise would be a retirement plan’s trust.) The IRS’s analysis did not depend on any express or implied approval by a plan’s fiduciary. There could not have been such a condition because the ruling requestor’s § 403(b) contract was not (and never had been) held under any employer’s plan. Further, the ruling specifies the participant, the investment adviser, and the § 403(b) contract issuer as the parties to the arrangement. The ruling mentions no fiduciary other than the participant’s investment adviser. The IRS’s reasoning, which the ruling itself describes as a “well established” general principle, applies widely for all kinds of eligible retirement plans and without regard to the investments held under the plan.

Your question/comment is a bit baffling. Are you sure you were vested in the match? It would be very rare to be able to take your deferrals but not allowed to take the match. If you weren't allowed to take the match it would be way more likely you weren't vested and not entitled to it. How do you know they reported anything to the Social Security Administration? They might have done so but they aren't required to tell you. So how do you know? Where are you expecting this "account" to be set up? Do you have a copy of the Summary Plan Description (SPD) for the plan? If so, it tells you how to make a claim for benefits. Once you are more sure about the fact you might want to make a claim to clarify if you are indeed entitled to more money or not.

Agree with Lou - we do similar with CBPs, have the contribution rate in separate addendums that go only to those in a respective group. And yes, you could have a group defined with just one employee.

Does MP = Money Purchase in this case? If so the MP percentage needs to be in the SPD but the SPD you give to each group only needs to desrcibe the allocation that group would receive.

i disagree; the Roth IRA that accepts the rollover takes on the 5 year period of the 401(k) account. That 401(k) account satisfied the 5 year rule, so the 5 year rule is satisfied once rolled into a Roth IRA - new or existing doesn't matter.