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"The Helping Young Americans Save for Retirement Act is a bipartisan legislation that aims to encourage savings by younger workers in defined contribution plans. The bill would allow employees aged 18 to 20 to contribute to 401(k) and ERISA-covered 403(b) plans after completing one year of service, although employers could exclude them from receiving employer-matching or nonelective contributions." It's too much. They need to give us a minute! Does anyone have Brian Graffs direct dial/email address? If so tell him Austin Powers will make himself available Congressional Testimony for as long as it takes to convince Congress that this has to stop. https://www.mercer.com/insights/law-and-policy/bipartisan-bill-would-lower-dc-plan-eligibility-age-to-18/

I for one look forward to seeing the exhibits Austin will use in front of Congress... Can you say Groovy Baby! And Brians direct dial is 867-5309... Ill see myself out now.

If this was the first RMD due, then the participant had until April 2024. The year of taxation will still be in 2024, but there will be no penalty. If this was not the first RMD, then definitely the participant should have known better. It was not their first rodeo.

Unless it's an obvious ASG, we refer all those situations to ERISA counsel.

Check your plan document to make sure, but the regulations don’t require the under 21/1 group to get a gateway if none of their benefits are cross-tested in their group.

Basically run the test results twice, and merge the proper "halves" (allocations / accrual) as appropriate for delivery to file/sponsor.

I agree with Lou, but will also pile on with, if the gateway rate is 5 but you're running separate 401a4 tests for otherwise excludable employees, that gateway rate might not apply to him, so you'd want in the original scenario to have only one set of 401a4 testing rather than two.

Was there a corporate resolution done specifying the contribution amounts to each participant? I think this is a question for the lawyers. I don't know if whatever was done created a right to the allocation under applicable employment/contract law, etc.. I'll be interested in the responses!

If you can show the residuals that are paid out on in 2024 as payables as of 12/31/2023 and a $0 ending balance as of 12/31/2023 you may be able to get a way with a final 5500 for 2023, otherwise you're in the situation bzorc describes above with a short year filing.

Yes, I remember the discussion. I think there are potential 415 and deduction issues as noted in the prior thread and there is a better way to accomplish (individual allocation groups). Also, if that is language modification to a pre-approved document and has not been submitted, you may not have reliance on opinion letter.

If the amount was distributed in 2024 then it is taxable in 2024. Sorry to say, but waiting until the last minute caused this individual to miss their RMD for 2023. Play stupid games, win stupid prizes. At least the missed RMD was timely corrected and the excise tax is reduced to 10% under the new SECURE 2.0 rule. They could also request a waiver of the excise tax on Form 5329.

Did you try testing the under 1YOS group on a contributions basis? That group does not have to cross-test. What percent of pay is the son getting as a nonelective allocation?

After reading the financial statements of Power Corporation of Canada [TSX:POW] and its indirect subsidiary Great-West Lifeco Inc. [TSX:GWO] (which indirectly holds Empower Holdings, Inc.), I don’t worry about the profitability of the Empower businesses.

But... what is the regulatory definition of "officer"? Hint: title means nothing.

Have you determined whether this EE is exempt from all definitions of Key Employee? IOW, you say the EE is "an officer", but have you reviewed the definition of both Key Employee and officer in regulation 1.416?

I think it all depends upon what the broker is trying to represent themselves to be to a client. You have the "I am the one-stop solution to all your needs", or the "let's work with your other advisors" person. The former provides horrible service and should be avoided, while the latter makes sure that the client is properly advised. Unfortunately, this Mega Roth Fad is bring all of the one-stop disasters out as they try to sell whatever pops up on the shelf, regardless of whether it applies to a specific client. Just today, I fielded 3 call on Mega Roth for clients that could never use that type of provision. Does the broker care that what they are saying is wrong is a really telling question. One that I had today I had tried to call the broker last week, and got no return call. Of course, the client then calls us to find out how this great idea will apply and you have to tell them it won't work, so of course the broker calls you to complain that you contradicted there oh so wonderful advice. Of course, even after you point out that you tried to minimize the damage with your attempted call from a week ago, you are still at fault. How dare you tell the client the actual facts!

Definitely leave this up to the employer in conjunction with their legal counsel. The facts smack of retaliation against a terminating employee. A lot will hinge on the wording of communication that was given to the employees. If the wording is definitive (e.g., "you will get $$$", "your 2023 PS contribution is $$$"...) and there is no disclaimer that these are not final numbers, then the employee may be disgruntled enough to challenge a lesser amount. Precedent also could play a part. In the past, if nobody's contribution was reduced if they terminated after the communication to employees was given out and before the contribution was finalized with the employer resolution, then lowering the contribution for this terminated employee reinforces the idea that this a form of retaliation for the employee leaving. Similarly, the perception of other employees about how the employer handles the situation may be a consideration. People talk. Unless there is clear justification for making the change, it may make sense for the employer to avoid the negatives and move on given the potential cost in terms of time and money. That is their decision.

The flow charts on pages 45-46 are a great place to start: https://www.irs.gov/pub/irs-tege/epchd704.pdf

You definitely should file your 2023 return on Form 5500-EZ. For the years you filed a Form 5500-SF for plan years 2014 through 2019, you checked the box in Part I Line A that the filing was for a one participant plan, then that form will not be available to the public. These filings are okay and there should be no need for concern. If you did not check that box, then likely the forms can be found using the Form 5500 search tool. You can check by searching for your forms at: https://www.efast.dol.gov/5500Search/ For filings for 2020 to 2022, the instructions for the 2023 plan year filings say: "If you are filing an amended return for a one-participant plan or a foreign plan that previously filed electronically using Form 5500-SF or Form 5500-EZ, you must submit the amended return electronically using the prior-year Form 5500-EZ for amending returns originally filed for the prior years or use the current-year Form 5500-EZ for amending returns filed for the current year or returns originally filed older than 3-years. Do Not use Form 5500-SF for an amended return of a one-participant plan or a foreign plan, even if you previously filed using Form 5500-SF." You may also find useful this IRS page that was just updated in December 2023: https://www.irs.gov/retirement-plans/filing-an-amended-2020-form-5500-ez If you have copies of your previous filings, the whole process to clean up 2000 - 2022 everything should not take more than 2-3 hours (including reading the instructions and preparing amended filings). If you are going back to 2014, then double that time estimate.

What does your prospective client do and who paid them the $500k? I'm guessing your prospective client is a consultant or something along those lines, and this payment was from one of their clients who wants to preclude them from providing their services to any of their competitors? So not really a non-compete, but more of an exclusivity agreement? Or maybe something that prevents your prospect from going into business for themselves in competition with their client? If that's the case, then I think it probably is usable for pension purposes, as it directly relates to the services they provide as part of their business. Essentially they received a bonus for doing such good work that their client wants to keep your client to themselves. On the other hand, if your prospective client isn't providing ongoing services to the person that paid them the $500k, then I would feel differently about it. For example if the payer felt that whatever your client is doing might be a threat to their business, so they are paying them $500k to get lost. In that case, the payment is for work they are NOT doing and would probably not be usable income for a pension. Interesting question! I'll qualify my entire reply here and say that this is a bit outside my area of expertise - I would recommend getting an attorney to review the facts.

If the suggestion is to require 1 year of service and no hours requirement, essentially you have an elapsed time eligibility service which would allow all PTs to participate (not just employees who would be considered LTPT).

As an employee of a recordkeeper, I can say the trend is toward facilitating, if not outright encouraging participants to stay in-plan. Our latest is a decumulation tool (PensionPlus, by Schlomo Bernartzi and company) that provides an analysis of periodic distributions to fund a desired (and likely to succeed over one's lifetime) income level in retirement. Lots of plan sponsor excitement. Slow uptake by participants, but growing...

Honestly, I have not developed an opinion as to what is "best" - I know some people have strong opinions, but I'm not one of them, and I'm not at all sure there is one "best" solution. Plans and employers have some wildly different situations, and we haven't yet worked with enough real life situations to really get a handle on what may generally be the best solution. I expect you will get some recommendations from other members.

All of our One Year of Service plans shift the computation period to the plan year, so for the most part we are dealing with just January 1 entry dates for LTPTs. I'm assuming non-auto enroll plans would still get to use the first 3 months of the plan year to find missed LTPTs and correct without a QNEC? One more reason for clients to get us their census data asap.

There will be HCE LTPTs, for example, in hospitals where per diem employees have been receiving exceptionally high compensation, and in businesses where the failure-to-launch children of the owners are working part-time. The LTPT rules are insidious! It will be interesting to see if the IRS takes a hard line on enforcing missed deferral opportunity corrections on companies who were not able to timely implement the LTPT rules, or just guessed wrong on how to identify LTPTs. It also will be interesting come 2025 to see what plan auditors will feel obligated to report about whether LTPTs were handled correctly.

You can test those under 21 and 12 months on a contribution basis and I would think the 3% SH would be all you need in that group. The group over 21 and 1 YOS can be cross-tested and the NHCEs benefitting with any nonelective in that group will get at least the minimum gateway. I would think the system could easily do that. Otherwise perhaps look for the system instructions for restructuring or how to test using component plans

If your plan had totally liquidated and all benefits paid out on 12/26/2023, then the final 5500 would be for the calendar year 2023, assuming that this is a calendar year plan. However, since you had residuals posted on 1/2/24, you may have to consider a short year filing for 2024, from 1/1 to the time when the residual was paid to the employees. This is especialy true if your plan was a large plan, subject to audit. We tried, many years ago, to show the residual as attributable to the prior year, but the audit firm was having nothing to do with that, and performed an audit for the period 1/1 to 1/6/XX. Had to file a final 5500 for that 6 day period. Hope this helps.

Yup - it was my mother who pushed Latin, saying it was the basis for all the other Romance languages - but after two years of Latin the last thing I wanted was to take another language. Should have taken Spanish or French, but I must admit Latin has helped on the vocabulary side, when I can remember that is! She also suggested I take typing (still called that back then) but I drew the line and refused. If I knew then what I know now I would have taken typing and not taken Latin, and maybe it wouldn't have taken 10 minutes to type this response LOL!

I don't think he's eligible for PS so unless he's getting pulled in under gateway language that is causing him to go from 3 -> 5 which would be fine then I think you might need an amendment to bring him in retroactively.

From what you've said, it seems that the sponsor would need to amend their plan to allow the 20-year-old employee to be eligible for a profit sharing contribution.

I assume you also mean there is no Affiliated Services Group? If neither CG nor ASG, then I agree.

I'd say 99% of the time you are right. But we do have situations where one spouse makes a ton of money and the other just works part time, or perhaps a family business where the child works part time, etc. so it does sometimes happen.

Well, at the risk of rehashing the issue of spendthrift protections, I still maintain that a qualified retirement plan has more protection against creditors. Also, institutional procing of investments (at the cost of limited investment choices.)

In favor of Roth IRA: The tax qualified plan need not be amended to provide for indefinite deferral. IRC 401(a)(14) requires a plan to begin payment of benefits no later than the 60 th day after the close of the plan year in which the latest of the following events occurs: (1) The participant reaches the earlier of age 65 or the plan’s normal retirement age, the tenth anniversary of the employee’s participation in the plan, or the participant has a separation of service. Some plans lump sum at this payout date - ignoring the option to defer commencement. The tax qualified plan need not be amended to include the up to 10 year rule for distributions to non-spouse beneficiaries. There are the IRA exceptions regarding the penalty tax for certain distribution reasons that, I believe, do not apply to hardship or post-separation, pre-retirement distributions from Roth 401k. In favor of Roth 401(k), There are the loan provisions, Involuntary distribution of Roth 401(k) assets don't get stranded in a Roth IRA, invested in capital preservation, as opposed to Roth 401(k) assets transferred directly to a subsequent (or predecessor) employer's 401k plan. There may be more, jack .

Some. Others were "I was just at the Dr. Acula conference and in one session...", or "Forbes/WSJ just had this article..."

I’m curious, when a broker-dealer or investment-adviser rep presents an idea like Mega Roth, how many of them add to the description something like: “You should check it out with your retirement-plan guy.”? All? Many? Some? None?

I know NIPA exists but I have no idea what credentials they offer. I have been a member of ASPPA since 1989 and I've always thought of NIPA as an ASPPA want to be, smaller and not as prestigious. I imagine NIPA is less expensive, but there is likely a reason for that.....

I've been an ASPPA member since 1989 and I'm very partial to them. I've been active in a lot of different areas. I was also a NIPA member from 1990 through 2022. Never felt I got as much from it.

I do generally omit my "Galactic Institute Aeronautical Nuclear Titan" and "Elected Galactic Overlord" (GIANT, EGO) designations. I'm saving them for when I go into politics.

I feel mine are justified. It's only pretentious if someone with more than me lists them. 😁

Not sure if this OP is from getting up on the wrong side of bed, or just trolling. Likely the latter. But why would you possibly care? Someone who is listing their professional credentials is, presumably, not also listing their B.A. or M.A., or whatever. Some clients, advisors, etc., etc., might not recognize what a CPC means, but they might know what an ERPA means. Etc., etc., etc. - where's the harm in listing them? If no one is interested, the eye skims over them. Have a nice day.

I remember this from I think The Patton Papers, I read the book maybe 40-50 years ago. General Patton received a letter from someone with most of the alphabet listed after his name in the signature. He responded by addressing the letter to "Mr. John Smith, SOB".