Leaderboard

The CPI-U for September 2023 was published with a value of 307.789. Based on Tom Poje's spreadsheet, the dollar limits for 2024 are projected to be: Almost all increased (NOT Official yet, of course): Deferral limit: $23,000 (up from $22,500) Catchup: $7,500 (unchanged) Compensation Limit: $345,000 (up from $330,000) Annual Addition Limit: $69,000 (up from $66,000) DB Limit: $275,000 (up from $265,000) HCE: $155,000 (up from $150,000) Key Employee: $220,000 (up from $215,000) Just for reference, the unrounded figures are: Catchup: $7,793.00 Deferral limit: $23,379 Compensation Limit: $345,220 Annual Addition Limit: $69,044 DB Limit: $276,176 HCE: $155,984 Key Employee: $224,393

Stop there. Refer him to the SPD, which should in turn refer to, or include, written QDRO procedures and claims procedures. He is making a claim for benefits. Make him follow the claims procedures. Stop trying to explain or coach.

I just got a call from a 2/28/2023 PYE client. They got a letter from the IRS saying they approved the extension to 10/15/2023 for the 12/31/2022 PYE. I double check we filed the correct extension done right. There seems to be a bit of an issue going on here.

The CPI-U for September 2023 was published with a value of 307.789. Based on Tom Poje's spreadsheet, the dollar limits for 2024 are projected to be: Almost all increased (NOT Official yet, of course): Deferral limit: $23,000 (up from $22,500) Catchup: $7,500 (unchanged) Compensation Limit: $345,000 (up from $330,000) Annual Addition Limit: $69,000 (up from $66,000) DB Limit: $275,000 (up from $265,000) HCE: $155,000 (up from $150,000) Key Employee: $220,000 (up from $215,000) Just for reference, the unrounded figures are: Catchup: $7,793.00 Deferral limit: $23,379 Compensation Limit: $345,220 Annual Addition Limit: $69,044 DB Limit: $276,176 HCE: $155,984 Key Employee: $224,393 This thread is getting a little long, so I will start a fresh new one.

See instructions to Form 5500, you can if you meet the following conditions. An automatic extension of time to file the Form 5500 Annual Return/Report until the due date of the federal income tax return of the employer will be granted if all of the following conditions are met: (1) the plan year and the employer’s tax year are the same; (2) the employer has been granted an extension of time to file its federal income tax return to a date later than the normal due date for filing the Form 5500; and (3) a copy of the application for extension of time to file the federal income tax return is maintained with the filer’s records. An extension granted by using this automatic extension procedure CANNOT be extended further by filing a Form 5558, nor can it be extended beyond a total of 9½ months beyond the close of the plan year. Note. A tax-exempt organization is not required to file a federal income tax return. However, if the organization uses a Form 8868 to request an extension for its Form 990 series return, the filer is automatically granted an extension of time to file the Form 5500 until the extended due date of filing Form 990 series if all conditions listed above are met. An extension granted by using this automatic extension procedure cannot be extended beyond a total of 9½ months beyond the close of the plan year.

Again, thanks for the replies, especially in light of the time of year. Anyway, the advice to terminate retroactively is not from us, just to be clear. That advice is coming from the client's attorney! I was pretty sure this could not be done, but figured I best ask since I don't claim to know all things. We will look into the amortizing as suggested, though. Again, thanks.

If you don't have a QDRO in hand then you have no right or obligation to investigate whether or not some person out there is entitled to retirement or survivor annuity benefits. See the attached DoL Advisory Opinions. BUT If the Participant retired during the marriage he would have been required by the REA - 29 USC Section 1055(a)(d) that you can find at https://www.law.cornell.edu/uscode/text/29/1055#:~:text=§ 1055-,29 U.S. Code § 1055 - Requirement of joint and,annuity and preretirement survivor annuity&text=in the case of a vested participant who dies before,surviving spouse of such participant. [and see attached from the Internal Revenue Manual Section 4.72.9.3.5 and see ERISA § 205(a)-(d), and see 26 CFR § 1.401(a)-20 - answer 25(b)(3). If an employee retires while still married, the spouse will receive a survivor annuity (unless waived by the spouse) and no subsequent divorce will undo that mandatory election regardless of whether or not the parties or the judge have addressed it in the divorce proceeding.] to name his then spouse to receive a QJSA and a QPSA, and that election would survive a later divorce, unless the spouse affirmatively waived such benefits. If you have the documents he submitted at the time of retirement you should have the answer to his problem if his divorce occurred after that date. The spouse is covered for survivor annuity benefits per 29 USC 1055 and not by reason of a QDRO that is preempted by Federal law, BUT only for a share of his survivor benefits and but not for a share of his retirement annuity benefits during his lifetime. That would require a QDRO. The fact that he did not tell you he was divorced makes no difference if the QJSA and QPSA were locked in at his retirement. Let's hope you have his retirement application that would show a waiver, but even if you don't, you have the law on your side. David Advisory Opinion 1992-17A - duty of Plan Admin.pdf Advisory Opinion 1999-13A _ U.S - Sham Divorces.pdf DoL Advisory Opinion 1990-46A.pdf IRS Manual section 4.92.9.3.5.pdf

We are soup to nuts, with a few exceptions: If there is a plan termination or a client has a sizable force-out project, we have an assistant in the office who manages those larger distribution projects. We also have a part-timer who handles the reconciliation of plans who use individual brokerage arrangements. The only item that would be truly "departmental" is our Document Group, who prepares plan documents and amendments. Consultants request and review the documents/amendments before they go out for signature though. We have a Support Group who handles communications with clients when their 5500s are ready for filing. They tend to spend a lot of time on the phone this time of year working with clients who have forgotten their passwords. They also managed the communication of the new login requirements for electronic 5500 filings. In our office, our CEO works directly with new or takeover plans, preparing projections and putting together plan design with few exceptions. Once this piece is complete, the plan is assigned to a consultant, and it's their baby from there. Any changes in plan design down the road are within the consultant's purview - providing clear instructions to the document department for applicable amendments. This works well for us, and our clients appreciate having a single point of contact for just about everything. If a relationship doesn't work out - and this rarely happens - a client might be assigned to another consultant in the office.

Contributions to the plan depending on the terms of the plan document could include any of the following sources and I may be missing some: Employee: Traditional 401(k), ROTH 401(k), Voluntary After Tax, Rollover Employer: Matching, Safe Harbor Matching, Profit Sharing, Safe Harbor Non-elective, Qualified Non-elective, Qualified Matching, Prevailing Wage. You might also have ROTH conversion sources for the sources above if the plan allows for in-plan conversions, rollovers or transfers. All of them might have slightly difference rules that they need to follow with respect to vesting, timing of deposit, and withdrawal eligibility. Your TPA should be able to help you out with specific questions about your plan.

What? Something clearly stated in the instructions? Inconceivable! LOL Thanks.

Thanks Bill, I never knew that - I learned something new today so you can teach an old dog new tricks! Of course no guarantees I'll remember that months from now when it happens again.

You can edit your original post. Click the three dots in the upper right corner.

Does this participant have any standing to "complain"? Is this participant making a "claim"? As Effen implies, there may be nothing to do, such that the question might be easily answered by providing a copy of the SPD (although it's possible the SPD is not specific enough), or (even better) provide the plan's definition of Spouse or definition of J&S.

I once heard, a long time ago, that there was such a thing. I only see it now with expletives.

If the only effect of an Internal Revenue Code § 457(b)(3) normal retirement age is to fix which three years get the § 457(b)(3) deferral limit, it’s much simpler for a plan not to specify any age, and to provide that a participant may elect her normal retirement age within the range § 457(b)(3) permits. 26 C.F.R. § 1.457-4(c)(3)(v)(A) https://www.ecfr.gov/current/title-26/part-1/section-1.457-4#p-1.457-4(c)(3)(v)(A). Following a worker’s job classification, defined-benefit pension rights, and other circumstances, a normal retirement age can be as young as 40 and as old as 70½. Example: Martha will turn 70½ in 2027 and elects 2024-2026 as her “special section 457 catch-up” years. Observe that a § 457(b)(3) deferral limit applies on the participant’s tax year, not any plan year. Whether a plan amendment is precluded or must be limited is governed by the United States’ and the State’s constitutions and other State law. But an amendment that does not diminish any participant’s rights should be unobjectionable.

Generally, 99.9% of the time, once the participant commences payment, nothing can be changed related to the form of payment. Sometimes the payment of the benefit is split via QDRO, but the form remains unchanged. The spouse that he was married to at the time of benefit commencement is still the beneficiary.

SSA just announced the taxable wage base for 2024 will be $168,600. https://www.ssa.gov/oact/cola/cbb.html

@ill I answered your questions. This is a board for consultants to discuss various provisions. It's not free advice for people that don't want to pay. Hire someone to provide you expert assistance and quit being cheap.

Whoever wrote this is talking about, or trying to talk about, 401(k) contributions, not after-tax contributions. It's kind of muddled but none of it is relevant to after-tax contributions.

Although Internal Revenue Code § 414A(a)(1) generally (with some exceptions) applies to a § 401(k) arrangement established on or after December 29, 2022, a plan need not provide an automatic-contribution arrangement until the first plan year that begins on or after January 1, 2025. Some plan sponsors might consider it awkward to omit an automatic-contribution arrangement for 2024, recognizing a need to add automatic for 2025. But others might prefer administering the first year of a new § 401(k) arrangement without the extra complexity of automatic.

Right. A single member LLC is a disregarded entity unless it has elected to be taxed as a corporation.

It takes 2 or more taxpayers to have a partnership so he cannot have a 1 man LLC taxed as a partnership. If there is no SE income listed in box 14 the income is not SE earnings and cannot be used for plan comp.

Nothing yet.

Assuming the plan doesn't currently allow for discretionary match I would assume they would need to adopt the amendment before they started depositing the matching contributions to the plan but not later than the end of the plan year for the discretionary amendment. That said, if they did start depositing the match early, I think the eventual amendment would most likely work as a self correction under the newly expanded IRS rules.

We have had several this year, for the 12/31/2022 Plan Year.

I bet you all can't wait until the government shutdown!