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JHalligan, there is no controlled group if it's only one company (e.g., corporation or LLC). Controlled group applies where there are commonly controlled separate legal entities. Why the heck would you have a 401(k) that no one can participate in? Anyway, in theory it should be possible to amend the plan that does have participants to cover the one nonunion employee of the unionized division. But you really need to review your facts and the documents to make sure.

Couple of thoughts. 1. If you agreed to bill by the hour, then bill by the hour. 2. There is a value in the services that isn't tied to time. It's tied to knowledge and efficiency. One shouldn't be punished for being smart and working quickly. 3. If you bill less than estimated, be sure the client is aware. And remind them that things sometimes go the other way and you would still expect to be paid.

I don't think it's too late. Check out https://www.irs.gov/retirement-plans/irs-penalty-relief-for-dol-dfvc-filers-of-late-annual-reports and the referenced authority (Notice 2014-35). As long as you satisfy the DOL's requirements for DFVCP the IRS should waive penalties. It may require some correspondence and/or phone calls to IRS since the client is this late into the process with IRS.

Ask the client?

If the participant’s objection is based on sharia and the plan provides participant-directed investment, the plan’s sponsor or administrator might consider adding to the plan’s designated investment alternatives a fund with investment strategies to meet sharia. These might be available in a recordkeeper’s platform (even without needing a brokerage window), or could be added on a plan fiduciary’s request.

I have run into this issue several times in the past few years and we also tell people that participation is not optional due to various IRS requirements. But by any chance is your reluctant employee Muslim? Our plans offer a self-directed brokerage account and there are a number of sharia-compliant funds (such as Amara) easily available.

and seriously explore/discuss merging the plans

If the plan permits, person can opt out of employer plan(s) BEFORE (s)he would enter the plan. However, if this person is kept out under any method (election or plan provision), (s)he is not excluded from coverage and nondiscrimination testing.

Agree - not your responsibility. Lot's of issues - is this a continuation of pay including a continuation of benefits, is it accrued sick and or vacation time, (are hours of service being properly credited) or is it severance?

Great comments by Bill. Check the exact language of your agreement. Also, what would have happened had you spent more time than estimated and time charges exceeded $20,000? If agreement said "estimated to be between $15,000 and $20,000" then I think you should invoice actual $12,000 in time charges. If it says "fee will range between ..." then I think you're OK to bill the $15,000. Finally, if you employ a "realization percentage" to your hourly rate (e.g., staff person's hourly rate is $200 but you routinely accrue time charges at 80% (so $160), and at realization your time charges are under $15,000 but at higher realization they exceed it, I think you're ethical to charge $15k - BUT, make sure whatever you do is supported by the language in your service agreement. Regardless, if you charge less and communicate to client that records were better and you were more efficient than expected and so time charges are less than estimated, you may earn some good will "brownie points" in addition to taking the ethics question off the table.

Just to be clear, we are talking about a child of one of the owners, correct? Not just some random child off the street? Ownership is attributed from parents to children for HCE determination purposes. If the parent is HCE because they are a 5% owner, then the child is also a 5% owner and an HCE. The definition of one-participant plan, from the 5500-EZ instructions, treats a 2% shareholder in an S-corp as defined in §1372(b) as a partner, and §1372(b) includes attribution of ownership under §318. If it's an S-corp and the only participants are owners and their children, then the children are treated as owners for purposes of determining whether the plan is required to file 5500-EZ. Note that this does not make it exempt from the other requirements of Title I, so things like SPDs and SARs are still required even though they usually wouldn't be with an EZ filer.

"SoloK" is a marketing term. A SoloK plan is just a regular 401(k) plan that happens to only cover owners (and their spouses). Sure, some institutions offer an abbreviated plan document making things a little easier, but once an employee is hired then you have to put the plan on a full-blown document, increasing time and effort on all fronts. If it is a child of an owner (more than 5%), then the child is an HCE by attribution automatically.

First, make sure you eliminate it for 2023 AND let them know if the plan is top heavy and what they need to do to avoid any TH minimum. At this late date, you aren't going to avoid the SH because you have to give 30 days notice and that puts you to the end of the year. Agree with Bri to see if you have leeway. We draft our documents so that the HCE SH is optional. Then start discussing a plan to make the 2022 contribution.

One thought I had was to double-check your plan document to see if it has any leeway on the HCEs, like if the plan says the sponsor may make an additional SH for the HCEs up to the same level the NHCEs are getting.

If you are the TPA it isn't your job to decide when the DOT is but for the client to do so. I have a number of staffing firm clients and when a person terminates vs just isn't assigned to a client is a constant conversation. But the client decides every time.

You can find prior discussions on this topic if you search the threads. The word "religious" is a good search term.

It's not strange and has come up more than once on this board. The consensus seems to be that yes they have to participant for IRS compliance reasons. I believe the objection is usually centered around "interest" being against their faith.

The executor should generally be able to handle the affairs for a sole proprietor (the business owner and decedent are one and the same). If it's a corporation and there are no other officers then likewise, the executor should be able to stand in where the owner did previously.

Generally, you satisfy DB RMDs by commencing the benefit as an annuity, either single or joint life, unless the plan allows other options. If the plan allows a lump sum and participant so elects, then a portion of the lump sum will need to be parsed out for one or two year's worth of RMDs, depending when paid. The RMD portion can be determined as 12 or 24 annuity payments or considering the lump sum as a DCP balance and using DCP RMD methodology, which always (in my experience) leads to a lower RMD portion. If this is for an owner or HCE, the plan will need to be sufficiently funded to pay a lump sum.

Correct, person cannot get 402(f) notice more than 180 days before the annuity starting date, which in this case I think would be the distribution date. I don't know how quickly a DCP termination d-letter happens these days, DBPs usually take 9-12 months. I think they can't issue a letter any sooner than 145 days, so maybe send out forms after four months (120 days). Unless the plan is an ESOP, part ESOP, or has some crazy provisions, I would think you'd have d-letter in time to be within those 180 days. Just a thought.

I'm a little confused here, the thread title says "DB Plan" but the post says "vested balance" which would mean a DC plan - which is it? Assuming it's a DB plan, and the post actually meant to say "vested accrued benefit," then.... The portion of the benefit that becomes vested in 2022 is treated as accruing in 2022. Additional benefits that accrue in 2022 must commence distribution in 2023. See 1.401(a)(9)-6 Q&A-5 and -6 of the current regs, or 1.401(a)(9)-6(e) and (f) of the 2022 proposed regs. Assuming that the termination completes and the final distribution is made in 2023, then you can use the DC method to calculate the 2023 RMD, treating the total amount distributed as the account balance.