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Us Red Sox fans would have preferred that the Cleveland baseball team be named the Oceaneers. ” WHAT DO YOU EXPECT WHEN THEY BUILD A BALLPARK ON THE OCEAN?” – OIL CAN BOYD, AFTER A GAME AT CLEVELAND STADIUM IS POSTPONED DUE TO FOG

If the participant was born on or before 12/31/1949, and they terminated employment in 2021, then 2021 is their first distribution calendar year and they must take an RMD before they can roll over their account balance in 2021. "Before" can really mean "simultaneously;" basically you just have to make sure that the RMD is distributed if you are paying out the entire account.

Unless the safe harbor top-heavy exemption applies, once they are eligible to defer and the plan is top-heavy, then the non-key employees must get a top-heavy minimum allocation, even if they are not yet eligible for profit sharing, match, and even if they don’t defer. Since the plan allows deferrals and can’t require more than a 1 YOS requirement for deferral eligibility, they have to provide the top-heavy before they’ve met the 2-year eligibility requirement for the PS portion of the plan.

My two cents is the term wear-away (or whatever you end up calling it) should clearly be defined in the plan document so anyone can understand it's intended meaning. But with that said I have seen many summary plan descriptions where there is a certain benefit formula up to xx/xx/xxxx or up to xx years of service and then a second formula (which could be an increased accrual rate or a decreased accrual rate) for all years after the cut-off. Some say to lump it all together for the final benefit and some do not to avoid wear-away.

It would be worth searching all prior plan documents. Perhaps it was stated in an earlier version and dropped off somewhere over time. Could at least shave a few years off the cost

Any loans with that status should be (have been) "distributed" (just an accounting entry/no reporting) when the participant was eligible to receive a distribution. It's hard to think of a reasonable scenario where that shouldn't have happened before RMDs were due.

But participants would be eligible for top-heavy after one year?

My understanding of the Spousal Assumption Rules was that she could do spousal assumption at anytime (but once it's done, it's done). So say she's 52 years old when you pass. She can identify the IRA as a Beneficiary IRA and take the funds out according w/o the 10% penalty. Once she obtains the age 59.5, whatever is left in the Beneficiary IRA, she can claim as a Spousal Assumption and make it her own IRA. Somebody can correct me if I'm wrong. But in this scenario, there would be no need for 2 separate IRAs. The only drawback would be the annual required distribution would be more because the value of the IRA.

Are you making this change for the plan year ending 12/31/2021? If so and you have the usual 1,000 hour accrual rule, I would guess it’s too late to change the accrual for 2021 for anyone with 1,000 hours. What am I missing?

I think you should talk to an estate planning attorney and/or financial planner versed in the nuances. But overall yes your idea can work if she has need to access the funds prior to age 59.5 without the 10% penalty. One thing with respect to the Spousal Inherited IRA, she does not need to drain it 10 years. The ability to do a "stretch IRA" as the term was used prior to SECURE is still available for spousal inherited IRAs.

If you're referring to the 402(f) special tax notice, I would direct you to the model 402(f) notice contained in Notice 2020-62. Regarding loan offsets, it provides the following: You might also be interested in sections II.B and III of Notice 2018-74, which discusses the changes that were made to the model notice with respect to QPLOs.

No you do not for the document. Make sure to put in the fresh start date and the new formula p,us any other requirements that your document may have.

That sounds correct. It looks like you are using a fresh start date of 12/31/2021 and a formula without wear-away (sum of the frozen as of fresh start plus benefits accrued after the fresh start).