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If he has a W-2, that's the amount to multiply by 25% (not 20%). Should be 6,375. Of course, since that would be a 415 problem, he should limit the PS to 6,000. You definitely don't do self-employed calculations for an S-corp. shareholder as you would a Schedule C filer.

This is a common way to structure contributions when you have an older HCE and some younger NHCEs. It is not discriminatory, as long as the numerical tests under 401(a)(4) are satisfied (and you said that they are). SHNEC is considered a profit sharing contribution for purposes of 410(b) and 401(a)(4).

There is literally no other option.

Per the plan doc, the full plan year compensation; presuming we are not considering pre-entry compensation exclusions, but for those affected by such you would want to double-check that you are correctly granting entry dates if they had otherwise satisfied eligibility by the 1/1 effective date.

Yes, it is too late. Retroactive adoption under the SECURE Act requires that the plan be adopted before the tax filing due date, including extensions. If the return was filed on time, then there is no extension to the due date - this is true even if an extension request was filed on time.

An arrangement in which one service provider absorbs or embeds another service provider’s fee might be an exempt prohibited transaction if: each service provider discloses to each responsible plan fiduciary all details of the arrangement, at least as required under ERISA’s 408b-2 rule [29 C.F.R. § 2550.408b-2 https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-F/part-2550/section-2550.408b-2]; each service provider discloses the further information any responsible plan fiduciary requests; each service provider discloses the further information needed for each responsible plan fiduciary’s approval to be prudently informed; each responsible plan fiduciary is independent of all service providers involved in the arrangement; none of the service providers involved in the arrangement advises any plan fiduciary about whether to approve the arrangement; each responsible plan fiduciary approves the arrangement as obeying the plan’s governing documents, providing each service provider no more than reasonable compensation, not putting the plan in a disadvantageous arrangement, and otherwise prudently pursuing the plan’s exclusive purpose. A responsible plan fiduciary would want its lawyer’s advice about how thoroughly and carefully a proposed arrangement meets those and other conditions. A service provider evaluating whether it is willing to participate in such an arrangement would want its lawyer’s advice about whether the proposed arrangement meets all conditions of ERISA § 408(b)(2) and each further prohibited-transaction exemption the service provider wants to rely on.

Another BenefitsLink discussion raises the same worry. https://benefitslink.com/boards/index.php?/topic/69012-lifetime-income-illustrations/ ERISA imposes the new requirement on a plan’s administrator. For a typical single-employer retirement plan, the employer is the plan’s administrator. If an employer did not ask its own employee-benefits lawyer, an employer might be unaware of the new requirement. When an employer/administrator learns of the new requirement (and that no recordkeeper offers a service to meet it), the administrator likely would seek a service from its third-party administrator.

Agreed that the above is most useful to avoid prolonged inactivity on the part of whoever is taking over the duties of the Company.

I see no reason why that wouldn't work; of course, the company has the ability to change the trustee at any point, so the day after the contingent becomes the trustee, he/she can be replaced using the same mechanism of a company resolution.

There are sometimes valid reasons why a contingent trustee is preferred. One example: trust has non-qualified assets requiring a bond in excess of $500,000. In such case the bonding company has been known to request financial statements of each appointed Trustee. There are no doubt others. So, while somebody might be willing to accept appointment as Trustee to wrap things up, they might not be willing to sign on as a non-contingent Trustee. The advice we were given is that there is no need for the Trust document to have a provision specifically authorizing a contingent trustee. Here is what we have used for a long time: ACTION BY THE BOARD OF ABC INC. ("Employer") BY WRITTEN CONSENT The undersigned, being the sole Director of the above corporation, and acting pursuant to the provisions of the By-Laws of the corporation, does hereby consent to and approve the following resolution(s): WHEREAS, the Employer adopted, and has had in effect the ABC Inc. Profit Sharing Trust (the "Trust") which was initially established in conjunction with the ABC Inc. Profit Sharing Plan; effective the same date; and, WHEREAS, [Name of first Trustee] and [Name of second Trustee] have been appointed as Trustees of the Trust effective January 1, 20yy; and WHEREAS, The Employer has determined it is in the best interests of the Employer and the Trust's beneficiaries to designate a Contingent Successor Trustee in the event of the incapacity or death of both of the Trustees named above; NOW, THEREFORE, BE IT RESOLVED: That the following individual is hereby named as the Trust's Contingent Successor Trustee: Linda E. Johndoe RESOLVED, FURTHER: That the Contingent Successor Trustee shall not serve as Trustee of the Trust unless both [Name of first Trustee] and [Name of second Trustee] are no longer serving as Trustees because of (a) death, (b) physical and/or mental incapacity as certified by two (2) physicians, or (c) a combination of (a) and (b). RESOLVED, FURTHER: That the Contingent Successor Trustee named above shall only serve as Contingent Successor Trustee of the Trust if she accepts, in writing, the appointment as Contingent Successor Trustee, with said acceptance being valid whether it pre-dates the contingencies identified or not. IN WITNESS WHEREOF, the undersigned has executed this written consent on the _____ of February, 20xx. __________________________________ [Director] ============================================= CONTINGENT SUCCESSOR TRUSTEE ACCEPTANCE ABC INC. PROFIT SHARING TRUST I, Linda E. Johndoe, hereby accept the position of Contingent Successor Trustee of the ABC Inc. Profit Sharing Trust. Upon notification that both [Name of first existing Trustee] and [Name of second existing Trustee] are no longer serving as Trustees because of (a) death, (b) physical and/or mental incapacity as certified by two (2) physicians, or (c) a combination of (a) and (b).

Assuming you could write language that does the above automatically at his death, it is actually controlled by whoever takes over the contol of the business (the plan sponsor) at this death. That individual has the authority to appoint trustees and can appoint (or keep) the daughter OR replace her with someone else of their liking. We always suggest there be a second trustee just to avoid the problems of what happens if the single trustee dies and then we have to wait for some estate process in order to be able to appoint a new trustee. If it is a corporation and there are other corporate officers, then there is no problem, but a sole prop dies with its owner and the court would have to get involved to appoint someone to wind up the affairs. A second trustee can continue to provide trustee services without having to wait for the court. Separately, if the daughter is the natural beneficiary of his bounty, then he should ALSO make sure she is listed as the beneficiary since that cannot be changed after he dies. So: appoint her as a second trustee now; name her as beneficiary now (especially if the default beneficiary provisions don't already accomplish that).