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HCE determination (and lots of other things) is made under section 318 and is different than attribution for controlled groups (section 1563). Under 318, a parent is deemed to own a child's stock no matter the age of the child or the percentage ownership in the business. I love this summary from Lincoln. https://www.lfg.com/wcs-static/pdf/Attribution of Ownership in Retirement Plans - PDF.pdf

No. Form 5500-SF Line 10e is effectively the Schedule A disclosure of insurance-related fees or commissions. Line 8f is the disclosure of administrative service provider fees and commissions and would include non-insurance related investment management fees. For a great many plans, the figures in lines 8f and 10e should be different.

The Plan covered a non-owner employee for part of the year so you can't file the EZ for the year he was paid out. You need SF or 5500. The year following the payout you can switch to EZ assuming owner is only one covered for the year.

Salary not relevant, all HCEs. If a DB plan, possible PBGC coverage too.

Anyone remember your SAT's: Houseboat is to Rivers as RV is to Roads; or Propeller is to Water as Wheel is to Road; or Steering Wheel is to Rudder as Power Steering is to Live Independent Suspension

If the plan document, even after a careful reading, does not address this either way, then the plan administrator probably has a choice of interpretation to make, and many factors would be involved. Note that I would definitely review the language for the death benefit to see whether the "if" clause says something like, "If the participant dies before his or her annuity starting date,..." or something else. But even if (as is likely) the "if" clause does refer to the ASD, you need to check for whether the provision for payment of a lump sum indicates that it will be paid on the day that would have otherwise been the ASD if taken in the form of the default annuity, vs. saying it will be paid "on the date as soon as administratively feasible after the election," which would be ambiguous. I have not seen a DB plan that directly and consciously addresses the issue (e.g., "If the participant elected a lump sum, but dies before the ASD, then..."), although I hope they exist, but I have seen plans with a provision that if the participant elected a 100% J&S but died before the ASD the plan sticks with the 100% J&S. If your plan has such a provision it could also guide the analysis on the lump sum issue, since the administrative issue is similar.

I don't care about pollution I'm an air-conditioned gypsy, that's my solution, watch the police and the tax man miss me - I'm mobile!

You might consider what “sometimes”means. If there is a revolving door with enough people going out and back in within short intervals, immediate distribution might be problematic, or at least the optics raise questions. Rather than live a life subject to the whims of circumstances and intent, a change in plan design or reemployment policy may be warranted. Industry standards and practices would be relevant.

I am fully aware of everything you did not say since you are not here. There are no PFBs and COBs to eliminate. I still would like to know about the AB's, the freeze date etc, for my information.

First - I am not here, and I never said this: Is the sponsor going to pay you for all your hard work? Are they going to appreciate what you are trying to do for them? Are you going to report prior actuary to ABCD for not providing the AFTAPs? Who is actually impacted by all of this crap? Don't make their problems your problems. Resign before you get involved. Easy answer is to resign, but someone still needs to do the work, so consider this: Ask the sponsor to waive all PFB and COBs. Ask them to specifically tell you not to review any work prior to the current valuation. You should confirm to them in writing that you are not responsible for anything prior to current valuation date. Certify current AFTAP. Prepare the current valuation, Go and sin no more.

Agree with Luke, need to review plan document language carefully, especially references to the annuity starting date. However, annuity starting date has a legal definition and it is different for benefits payable as an annuity versus a lump sum. For a lump sum the ASD is the date that all required conditions necessary to pay the lump sum have been satisfied - essentially, the participant is eligible for the distribution and a valid election has been made with the proper forms executed and submitted to the plan administrator, including spousal consent if required. It is not just the check-cutting date. For example, if all forms were submitted on 9/15 and participant was eligible to get paid then, dies on 9/25 before scheduled check date of 10/1, I think you can make argument that 9/15 was the ASD for lump, he was alive on the ASD and therefore pay the lump sum to his surviving spouse. I have seen a few plans that specifically address the issue of election then death before ASD, but they are few and far between (like large, complex, individually designed plans). Whatever the Plan Administrator decides/interprets (with your consultation) should be documented, including specific facts and reasoning, in the event of IRS examination and/or a similar future occurrence.

It's a facts and circumstances question for the participant - if the RV is their principal residence, then so be it. Although RVs are not mentioned specifically, this excerpt from IRS Pub 523 (Publication 523 (2021), Selling Your Home | Internal Revenue Service (irs.gov)) may be helpful: Sale of your main home. You may take the exclusion, whether maximum or partial, only on the sale of a home that is your principal residence, meaning your main home. An individual has only one main home at a time. If you own and live in just one home, then that property is your main home. If you own or live in more than one home, then you must apply a "facts and circumstances" test to determine which property is your main home. While the most important factor is where you spend the most time, other factors are relevant as well. They are listed below. The more of these factors that are true of a home, the more likely that it is your main home. The address listed on your: U.S. Postal Service address, Voter Registration Card, Federal and state tax returns, and Driver's license or car registration. The home is near: Where you work, Where you bank, The residence of one or more family members, and Recreational clubs or religious organizations of which you are a member. Finally, the exclusion can apply to many different types of housing facilities. A single-family home, a condominium, a cooperative apartment, a mobile home, and a houseboat each may be a main home and therefore qualify for the exclusion.

We had a somewhat similar situation in which a client's payroll company rep told him he was paying outrageous fees for his 401(k) plan and pointed to line 8h on his SF form. Needless to say the majority of that number was due to employee distributions, which the rep forgot to mention. We are a tiny little firm and have great clients that, like this one, would reach out to us before reacting, but it made me wonder how easy it would be to lose a client due to something like this and never know why. So I would say this is not hilarious.

Who sang that. (not a question)

If they aren't insurance, I would start with the branch manager. Mention you think the material is first incorrect and second, and more important, misleading. Threaten to take the issue to their state's securities regulator, or maybe even the SEC. Or, you can PM me a copy of the letter and I'll do it. I love stirring up crap for creeps like this.

Ugh I loathe this kind of "marketing". I once had a client get one of these where they claimed the sponsor could be in big trouble because per the plan characteristics, the plan didn't use DIA's. It was a pooled profit sharing plan, with no 401k provisions...

How else to you prove your primary residence, utilities, mailing address, voter registration, driver's license(!!), etc. Might be after-the-fact if they're downsizing, but its all the same otherwise. Snowbirds aren't all condo owners in the off-season, plenty of them just move their "home" from campground to campground.

Outrage??? Nay, nay, this is hilarious; they have just handed you the greatest marketing tool ever, evidence of their own incompetence!! 1) This firm's EIN is public record and all over any 5500 filing that had to report their fees; feel free to reach out to those Plan Sponsors to sell your own more knowledgeable services!! 2) Are they an insurance company? If so their marketing materials have to pass strict truth/factual metrics; you should report this issue to their home state insurance commission, and your clients state commission, if different! 3) Laugh with your clients; share the good news with them that they've retained you, who knows better than many of your competitors, competitors who were brazen enough to put their own incompetence in writing! BTW, what provider is this so we can all protect any mutual clients we may have with them?

Not the first time for this question:

When a recordkeeper's customer-service person does not cite an authority, my experience suggests there is none. And even if there might be some Internal Revenue Service notice or announcement (or even a Revenue Ruling), only the Treasury department's rule binds a taxpayer.

I've not heard of any requirement that the dwelling be fixed. For years, we've allowed hardships for the purchase of a boat as the principle residence. It must have a roof, a bedroom, and a bathroom. Also, wouldn't probably fly on the shores of Lake Superior, but other place - sure. Certainly not fixed... I can only imagine that with remote work, work from anywhere, and with pretty good portable internet, this is going to become more popular (apart from fuel costs). My boss has one, and she has been known to work on the road.....

I know the company you're talking about. I work for a TPA firm and we have had clients receive the same emails targeting the same 5500 information. It is definitely a shady business practice and your outrage is justified. Employing this kind of fear tactic would be - I believe - an ethics violation for those of us with ASPPA credentials (I would think NIPA as well) so it's disappointing to see such a large, "reputable" company take this route.

Strictly speaking, a retroactive amendment to cure a 401(a)(26) failure is a 1.401(a)(26)-7(c) amendment - however most of the same rules apply as under 1.401(a)(4)-11(g). So no - you can't do a -7(c) amendment to increase only an HCE, because the amendment has to be nondiscriminatory on its own, under the -11(g) rules. If there are no NHCEs that could be added to the plan (including possibly someone who has not yet satisfied age and service requirements), then your options are: 1. VCP (if they even approve it) 2. Retro amendment that increases the one HCE, plus enough NHCEs to satisfy coverage and nondiscrimination on its own All of this is assuming of course that the plan says a 401(a)(26) failure will be corrected by amendment. If the plan document has a fail-safe in place, then you have to apply the fail-safe.

No. There is a requirement under Title I of ERISA to file the 5500, but that only applies to plans which are subject to Title I. Plans which cover only the 100% owner of a business, or partners in a partnership, are exempt from Title I. The reason the 5500-EZ exists is for those plans to provide a report to the IRS, since the DOL reporting requirements don't apply. For the most part, a plan which can file 5500-EZ is the same thing as a plan which is exempt from Title I. That line has become a little blurred recently, but there is coordination between the IRS and the DOL here. A plan administrator is only required to file either the 5500-EZ or the 5500(-SF) for any given year.

Sure. The complexity is going to be in the Federal income tax area, Santo Gold.

If this is a new separate plan that started for the employer after leaving the PEO and are truly/technically over 100 participants at start of the year (check and verify under terms of the plan and 5500 instructions) then I think the 80-120 rule doesn't apply. That rule is for existing plans that flip flop over and under 100 participants.

We have a plan sponsored by an insurance agent operating as a C corp. He has only 2 employees--himself as 100% majority owner and his son. We know that the plan must be covered by PBGC as there is no other known exemption. We are terminating the Plan in 2022 and want to change the valuation date to the beginning of the plan year, but under rev proc 2017-56, the change can only be made if the plan is sufficient to cover all benefits, which it is not. So it has been proposed that the majority owner waive/forgo a portion of his benefit so that the valuation date can be changed. This would be done before the plan is terminated by plan amendment/resolution. Can this be done? I think you can only do a benefit waiver if needed to make a PBGC case sufficient.

The 50% of the balance amount for a loan is only relevant when the loan is issued. After that, the participant still has access to all the rights in the plan.