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I have no opinion on the administration of the plan. From an IRS perspective, though, I recommend reading Revenue Ruling 96-47 (i.e., potentially a “significant detriment” as applied to only terminated participants), and from a DOL perspective, I recommend reading the NAPA article referenced below. That article cites DOL guidance and concluded that “a plan may charge administrative expenses to terminated participants, while not charging active participants, provided the method is not a breach of fiduciary responsibility, and the expenses are proper, reasonable and done in a nondiscriminatory manner.” https://www.napa-net.org/news-info/daily-news/can-plan-charge-fees-terminated-participants-not-active-ones#:~:text=The%20DOL%20and%20IRS%20have,done%20in%20a%20nondiscriminatory%20manner

If they are active and not yet the older of age 62 or the Plan's Normal Retirement Age I don't think there is a way to force them out. As ESOP guy suggests you might be able to have an in-service window crafted to encourage people to voluntarily take a distribution.

In interpreting the plan document, I would add that most ambiguities should be resolved in favor of the participant rather than the plan.

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.

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

Transfer those balance out of the participant-directed portion of the trust, and aggregate them all into a low-fee trustee-directed brokerage account. Amend the document if necessary. RK fees are almost always excessive when allocated to small balances, and any advisory fees are excessive compared to the annual account maintenance fee on the brokerage investment.

Calendar year plan? Mary is a Key employee and HCE for the 2021 year as she owned more than 5% at any time in the 2021 calendar year. For determining the TH ratio for 2022 Mary is a considered a key employee as of the determination date.

In what way did he "elect" a lump sum? Do you claim that you did not have notice of that election of a lump sum? How is "benefit commencement date" defined? Does "benefit commencement date" mean the same thing for a lump sum payment and an annuitized payout? How is "death benefit" defined? Is the cause of death a factor in whether there is or is not a death benefit? How is the death benefit computed? If he hadn't elected a death benefit would you have been required under ERISA to pay a survivor benefit to the surviving spouse? Have you computed the present value of that survivor benefit? Is it more or less than the lump sum? How much will it cost you in legal fees paid to your attorneys and to the attorney for the surviving spouse if you have paid her the lowest possible amount? What is the dollar difference between the present value of the survivor annuity and the lump sum and the death benefit? Can the lump sum or the death benefit rolled over by the surviving spouse to an IRA or other eligible retirement account? What are the differences between the lump sum payment and the death benefit? Is it possible that the death benefit is actually a separate benefit in the form of life insurance? [I had a case many years ago where a county pension plans was drafted in such a way that, unbeknownst to the county, there were survivor benefits payable to the non-spouse beneficiary, and also the decedent's surviving child. https://scholar.google.com/scholar_case?case=14512325294449180586&q=angerman&hl=en&as_sdt=4,21 David

I agree with your assessment. I think the only way to change the distribution form on 2022 contributions is to delay that distribution timing to 5 years after separation.

My understanding is that you cannot charge fees only to terminated participant accounts as that would be a detriment to a valid voluntary election to take a distribution. That is, you cannot through adverse plan provisions coerce a participant to take a distribution, such as making only those accounts pay fees or (if otherwise participant directed) transferring accounts into a money market fund. Maybe that has changed as I'm long removed from DC administration, but I would tread carefully. Admin fees can be charged against everyone's account on some reasonable and nondiscriminatory basis, but as Bri said, these would have to be actual fees physically paid from plan assets. Big picture - why are they even maintaining such a PSP, average participant balance of $200, and paying admin fees for $17,000 in assets? That's crazy.

That could get some people out. When was that PS made and are these people vested? If it has been a few years and that has been the only PS contribution, they may HAVE to be made fully vested upon the complete discontinuance of PS contributions. Not knowing how RK expenses are determined, these people would still be participants just without balances, so included in testing, 5500 counts, etc. Assuming there is already a match, maybe an additional year-end discretionary match for these (assume NHCEs) employees equal to the annual RK account charge? Plan document would need to allow - would be easy if RK account fee was fixed dollar per participant.

Exactly. When you start putting the same thing in multiple places, but it's not actually the same, then you have a problem. Trying to do too much can be harmful.

Look into a one time window for in-service withdrawals for people who have small balances??? It would seem most likely non-discriminatory. If they aren't putting money into the 4k portion they are the type who if given the chance to take the money and run. Obviously not a force out but could get rid of most of the balances by their choice. That is the only idea I can think of doing.

BTW, I'm not saying that is right or wrong, it just makes sense to us not to compete with the 404a5 disclosure.

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.

There have been some prior threads on this, including one I believe I started, and my recollection is there's not one perfectly clear answer. Some take the position that belonging to an overlapping group makes an employer part of one larger group, which in your example would continue to grow. Because A, B, and C are related, and C and E are related, then A, B, C, and E are all one employer. If that's true, because D and E are related, and A, B, C, and E are related, then A, B, C, D, and E are all one employer. I suppose F would be separate in any event if unrelated to every other entity. This is the approach taken in Who's the Employer. Others take the position, maybe more as a practical alternative, that you test each group separately, which would give you five tests. I have heard from several TPAs who test using this approach.

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.

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

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.