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Actually it's getting to 1000 hours, rather than the last day, to qualify for a DB plan's top heavy minimum. Even if they don't work enough to automatically qualify for a THM, they might end up needing something that large, anyway, to pass the 401a4, depending on what the owner is getting.

Changing from a C corp to an S corp shouldn't require a new TIN. I doubt they created a new entity. They likely just filed form 2553 and elected to be taxed as an S. And the CPA should definitely know the deduction of plan contributions, good grief.

Sure DB TH minimum is 1000 hours, but DC TH minimum is employed on last day of the year. So at a minimum they are going to need to get a DC TH min. But the coordinated TH language between the plans should tell them how much and which plan or plans.

Thanks, learned something new. My general experience has been a Partnership or Sole Proprietorship than decides to become an S-Corp and in those cases I've always seen a new EIN provided by the client or CPA.

Beyond reading a retirement plan’s governing documents and a plan’s agreement with a recordkeeper or other service provider, the employer/administrator should read the particular prevailing-wage statute and implementing rules (these can vary by State and political subdivision, place of work, and other factors) and the particular labor agreement (which might specify prevailing-wage provisions less flexible than those the prevailing-wage law permits).

While I’m good on fiduciary law, I’m no more than a novice on qualified-plan rules. But using your expertise, consider these points: Elapsed time doesn’t measure service; it measures time that elapses between a beginning moment and an ending moment. The ending moment is “[t]he date the employee severs from service[.]” 26 C.F.R. § 1.410(a)-7(a)(2)(ii) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR686e4ad80b3ad70/section-1.410(a)-7#p-1.410(a)-7(a)(2)(ii) A perhaps related point of tax law treats someone who has been a self-employed individual as continuing to be a self-employed individual even if a year’s earned income is zero or negative. The term “self-employed individual” means, with respect to any taxable year, an individual who has earned income . . . for such taxable year. To the extent provided in regulations prescribed by the Secretary, such term also includes, for any taxable year— (i) an individual who would be a self-employed individual within the meaning of the preceding sentence but for the fact that the trade or business carried on by such individual did not have net profits for the taxable year, and (ii) an individual who has been a self-employed individual within the meaning of the preceding sentence for any prior taxable year. I.R.C. (26 U.S.C.) § 401(c)(1)(B) http://uscode.house.gov/view.xhtml?req=(title:26%20section:401%20edition:prelim)%20OR%20(granuleid:USC-prelim-title26-section401)&f=treesort&edition=prelim&num=0&jumpTo=true. A regulation the statute calls for, and delegates to, provides: For purposes of section 401, a self-employed individual who receives earned income from an employer during a taxable year of such employer beginning after December 31, 1962, shall be considered an employee of such employer for such taxable year. Moreover, such an individual will be considered an employee for a taxable year if he would otherwise be treated as an employee but for the fact that the employer did not have net profits for that taxable year. . . . . 26 C.F.R. § 1.401-10(b)(1) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6f8c3724b50e44d/section-1.401-10#p-1.401-10(b)(1). If the self-employed business has not ended and the self-employed individual remains available to perform services if her deemed employer gets an engagement, the individual might not have severed from service. If that’s the administrator’s interpretation of the plan’s governing documents, the self-employed individual and her deemed employer might be careful to file tax returns so they’re consistent with not having closed the business. For example, a sole proprietor’s Schedule C might show a zero revenue, a little expense (for a business-privilege tax, or something else needed to keep the business available), and a slight loss.

Top heavy is a problem. If they're participants on the last day, they get top heavy minimums and likely required gateway. Doesn't matter what the allocation requirements are.

As Effen says, you need to work through your attorney on this. If the QDRO refers to a plan, and the money is in an IRA, then that needs to be changed at the very least. But there is an implication that the QDRO terms were agreed upon by both parties so this has to go back to your attorney.

You don't need to accept it, but I strongly recommend that you work through your attorney.

Shouldn't the CPA know these things? If not you might want to discretely suggest to your client they might want to look at other CPAs.

How does an eligible participant "opt out from year to year" on a CB plan? Either you satisfy the accrual requirement and get a benefit or your don't, it's not a CODA. But assuming that there was some amendment timely and properly executed such that no HCE benefits under the plan, or no HCE worked enough hours to accrue a benefit, then as CB Zeller pointed out you will automatically pass gateway and 404(a) because the HCE rate is going to be $0 and 0%. Assuming the Plan's are not top heavy then if no HCE benefits for PS or CB than your PS could be $0. If the combo plan is top-heavy, RTD on how you satisfy that in your specific situation.