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Read the plan document very carefully! It will define Normal Retirement and Normal Retirement Date. Reading those definitions will answer your question. They will most likely tell you when a termination is a retirement under the terms of the plan or not. This is not a question of law or rules. Nor is a retirement decided by the person or the plan sponsor. Either they are retired under the definition in the plan or they aren't. The plan document is all that you need to read to know your answer!

We filed 2 extensions for 2 plans with plan year ending 4/30/21. The extensions were sent to Ogden, Utah, return receipt requested on November 3, 2021. One envelope, two extensions. We typically file extensions one month before the due date. Today, one of our clients received a denial of the extension request. Upon closer review of the crumpled, torn-up return receipt from the US Post Office, the stamped date of receipt was December 6, 2021. While this is after November 30, most assuredly the envelope was mailed in time as the US Post Office could never deliver anything from Florida to Utah in 6 days! So we notified the other client that they would likely receive a denial as well. Well, guess what? They received their letter from IRS today, too! But theirs WAS APPROVED! It's a darn shame that we are at the mercy of IRS and the US Post Office. This is totally unfair to all of us and our clients. IRS should immediately develop a system to electronically file extensions! Or do away with the 7 month deadline all together! It is painfully obvious that they do not have the manpower to conduct their "business". It took them 2 1/2 months to process a form! We are basically powerless to do anything other than pay $750 and file under the Delinquent Filing program. Not worth the aggravation to fight it or risk it for our client. I guess we need to file these 2 months early to TRY to avoid the problem we had with the 2019 filings. I don't think they got around to processing those requests until the following year! Has anyone figured out how IRS is able to have their letters delivered on the date they issue them? Time travel?

We/ I always advise against this. It is a sure-fire way to discourage participation by the people a 401(k) needs most when trying to pass ADP and ACP (if applicable) tests. Who would voluntarily participate in a plan where 20% went for fees? PNJ

agreed. Good luck gtting the custodian to do it. The refund (that didn't happen) should be withdrawn as an excess contribution. Shouldn't be too difficult at that end.

Because the IRS says so? It is what it is.

if the IRA owns 100% than yes, I would suggest he does not provide any services. However, if the IRA owns less than 50% and there is a manager (that is not a disqualified person to the IRA owner) that oversees the entity, then realistically, the IRA owner could provide his or her expertise as long as the board/manager approves it, the IRA owner charges a fair wage, and it benefits the business. it's been a couple of years since I've had to look at this but i think there is a tax court case that allowed this. unfortunately, all my notes on this stuff is in my office and I haven't been in my office for a couple of months.

Just to be sure that this is clear: there is no circumstance under EPCRS in which the employer will make an after-tax corrective contribution. The calculated ADP is a combined ADP for all deferrals (pre-tax and Roth). In your fact pattern, the participant gets one corrective contribution of .5625%, all it pre-tax. Not .5625% for pre-tax, and another .5625% for the Roth. It does not matter if the participant would have elected to make his deferrals as all Roth or all pre-tax, or a combination - there is one corrective QNEC and it is all pre-tax.

Yup There used to be a time you could try asking for the penalty to be waived but with it being so large now the risk isn't worth doing that any more. You file DFVCP 100% of the time.