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1.415(a)-1 and go from there? 402(g) is a "per person" limit, 415 is a "per employer" limit.

The usual way this is done is to provide that at retirement, all unused leave goes into the plan; employees have no election to take it in cash. However, you then provide that the retired employee can take a lump sum distribution of the amount at any time. This has pretty much the same effect as allowing them an election unless they are so young they would face the 10% penalty for early distributions.

That’s why we like citations.

Always beware that there are things that people in the “forefront”* of ESOPs know that ain’t so. *And in the backrooms of the ESOP Association.

It sounds as though you have non-resident aliens earning no U.S. source income. As long as your plan affirmatively excludes people like this, you can exclude them from coverage/nondiscrimination testing.

Employee Stock Ownership Plan Answer Book. The authors, with experience (Ballard Spahr and Vedder Price) setting up ESOPs, organize this pleasantly trim book, with the information easy to find in Q&A format. Most law firms buy this treatise in internet format, but Wolters Kluwer publishes also the hardbound book. You might like the internet version, with hyperlinks to the cited ERISA and Internal Revenue Code sections, regulations, agency interpretations, and other sources. While you wouldn't want those details for your first read, the hyperlinking (and functions for lifting and pasting citations) is handy when you're working on a task for a client. https://law-store.wolterskluwer.com/s/product/employee-stock-ownership-plan-esop-answer-book-3-mo-subvitallaw-3r/01t0f00000J3FC0AAN

Was the form filed with 10021.00 or simply 10021? If the former, scanning/screening application may not have been expecting dollars and cents.

I've seen years many times. I actually worked as an investigator for the EBSA as my first job out of law school. Average case time was like nine months to a year. Many went to 18 or 24 months. If you want to chat more, please feel free to inbox me.

An important starting point for an ERISA-governed plan’s administrator or other fiduciary is: “[A] fiduciary shall discharge his duties with respect to a plan . . . in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this title [I] and title IV.” ERISA § 404(a)(1)(D), 29 U.S.C. § 1104(a)(1)(D). A plan’s governing document might grant the plan’s administrator some discretionary authority to construe or interpret ambiguities in the plan’s text. But that is not authority to deviate from what the plan provides. Further, if a governing document’s grant of discretionary authority to interpret the plan is, ostensibly, so wide that it would allow an administrator other fiduciary to ignore or vary a plan provision, a fiduciary is duty-bound not to apply that portion of the discretion that would be inconsistent with ERISA’s command: “Every employee benefit plan shall be established and maintained pursuant to a written instrument.” ERISA § 402(a)(1), 29 U.S.C. § 1102(a)(1). This is not advice to anyone.

The discretionary authority is generally to interpret the rules of the plan that may be ambiguous in a consistent manner not to make exceptions to the written terms of the Plan Document, that typically requires a plan amendment. This is not legal advise and I am not a lawyer.

What does the Plan Document say about distributions to non-spouse beneficiaries and their options?

@CuseFan is on target with the comment about the QSLOB election. A QSLOB must meet certain criteria. This includes: Each QSLOB must have at least 50 employees. Each QSLOB must: Be a separate organizational unit, Have separate financial accountability, Have separate workforces, and Have separate management. The employer must have filed to be a QSLOB using Form 5310-A Notice of Qualified Separate Lines of Business, that remains in effect until a filing is made to revoke the election. The QSLOB election applies to all members of the controlled group, and each employee of the controlled group has to be allocated to a QSLOB. No employee can be treated as an employee in more than one QSLOB. For each QSLOB to operate as a QSLOB each year is it must pass administrative scrutiny. There are two ways for a QSLOB to pass administrative scrutiny. A QSLOB can either pass the statutory safe harbor coverage test or satisfy any of five administrative safe harbors. There is even more complexity to keeping QSLOBs compliant so it is prudent to work with someone with experience with QSLOBs. Regarding @Cephas's second question. Entity 2 can easily have a plan covers only its NHCEs. If the HCEs are an issue, then look to a non-qualified plan as their consolation prize. Other structures also may be feasible, but that would require a lot more information about the demographics. In short, Entity 2 can have a 401(k) plan that does not need to cover Entity 1 without using a QSLOB election.

The requirement still exists as you a certifying the EZ is complete an accurate under penalty of perjury and that includes the FMV of assets reports. That said for a 1 person EV like you said unless it affects a distribution of the real estate or the value of assets for an RMD it really is a kind of a "no harm no foul" situation. Though as you learned from the audit that it can be an expensive fix. Make the client aware of them requirements and then put the onus on them to supply the the FMV for the 5000-EZ. I have had a few EZ audits in the past where the assets were not readily tradable on an open market (either real estate or 3rd party loan notes) and auditor didn't blink at the values being reported without an independent appraisal, but that more goes to show that every auditor is different because they certainly could have pushed the issue but didn't. I think they were more making sue that 415 limits weren't being exceed so sometimes it can depend on the nature of the audit.

It's 1,000. I don't like this whole concept, so as part of our takeover-restatement, I'm going to tell them that they have to change it. They've never had more than four employees - I can't imagine this is a significant issue for them.

I'd limit it to the categories listed in Publication 15-B. I think the explanation in de minimis benefits is helpful. This is also referenced in Notice 2024-2 (financial incentives for participation. Imagine the taxes that could be avoided if paid vacation were a non-taxable fringe benefit or if all pay for an employee could be made in the form of gift cards. De Minimis (Minimal) Benefits You can exclude the value of a de minimis benefit you provide to an employee from the employee's wages. A de minimis benefit is any property or service you provide to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administratively impracticable. Cash and cash equivalent fringe benefits (for example, gift certificates, gift cards, and the use of a charge card or credit card), no matter how little, are never excludable as a de minimis benefit. However, meal money and local transportation fare, if provided on an occasional basis and because of overtime work, may be excluded, as discussed later.

Try here https://www.irs.gov/publications/p15b

I have not advised anyone about whether a health plan is grandfathered, and I don’t know the three agencies’ rule (attached below). If the employer is confident that the correct interpretation of the statute supports the employer’s position and the employer has the aptitude, resources, and patience to litigate, a Federal court no longer is bound by precedent to defer to the Labor department’s interpretations, even those made in an Administrative Procedure Act rule. But recognize that courts often voluntarily defer to an executive agency’s interpretations. That has often been so for questions in employee-benefits law. This is not advice to anyone. grandfather group health plans 2020-27498.pdf

obviously a DC plan might have an exception to its last-day rule for retirees. An ERA definition can inadvertently trigger an allocation you weren't expecting, especially when the allocations aren't "individual groups." But otherwise, yeah, what benefit is that definition bestowing upon anyone?

Early retirement in the DCP - no harm, no foul for combo testing - and there may be employer objectives for having as David notes. CBP - do NOT include early retirement in the plan and test the combo as you would otherwise.

There is a larger issue here. When creating ANY plan, the sponsor (and by extension, anyone who thinks/acts as a consultant) should ask him/herself if there is ANY need for an Early Retirement definition. If you don't understand my point, note that E.R. came into vogue many decades ago when there was a need to "clear out" the workforce to make room for the post-WW2 workers (the parents of the baby boomers and then the baby boomers themselves). If there is no similar demographic "bubble", there is likely very little need for any set E.R. provision. Alternatively, an E.R. definition should (probably) include a significant minimum service requirement (e.g., 20+ years). (Yes, this could vary by industry and/or geographic location.) Do not fall into the habit of including E.R. provisions just because "it's always been that way".

I don't see a BRF issue unless there is some benefit, right or feature that is available to HCEs but not to NHCEs. Getting rid of the ERA for everyone shouldn't be a problem. There might be a 411(d)(6) issue but again, what is actually being removed if you eliminate the ERA in the DC plan? Not the availability of distributions, since you can still have that at age 59½. Not full vesting, since the definition of ERA already requires 6 years of vesting service. Is there something else that is granted by the attainment of ERA in the DC plan that could be a cutback if eliminated? Read the document to see, but I can't think of what that might be.

I would just eliminate the ERA in the DC plan. What is it even doing there? Since you can already have distributions at age 59½ without needing an early retirement feature, you should be able to remove it without it actually being a cutback. No need to add an ERA in the DB plan. Your testing age will still be NRA. I don't think I've ever seen a DB plan with an ERA that is combo-tested with a DC plan. I believe that in that case, you would need to test the MVAR at every early retirement age to see if it is more valuable. So my recommendation is, don't do it.

A year’s qualified charitable distributions, in the right circumstances up to $105,000 [2024], from non-Roth IRAs (but not a § 408(k) or § 408(p)) do not count in the IRA owner’s income for Federal income tax. Regrettably, a “QCD” can be available with an IRA, but not from an employment-based retirement plan. Some § 401(a)-(k), § 403(b), and governmental § 457(b) participants who prefer to stay in those plans make yearly rollovers into the IRA, in amounts one estimates as enough for the next year’s-worth of charitable donations. (Usually, an employment-based plan’s participant may claim a distribution because an opportunity for qualified charitable distributions does not begin until one’s age 70½.) The amounts of the QCDs need not relate to any minimum-distribution amount. Also, some users of QCDs—even a 90-something—have no minimum-distribution requirement, neither from an employment-based retirement plan nor, practically, from one’s IRAs. For details and other information, see Internal Revenue Code § 408(d)(8): https://uscode.house.gov/view.xhtml?req=(title:26%20section:408%20edition:prelim)%20OR%20(granuleid:USC-prelim-title26-section408)&f=treesort&edition=prelim&num=0&jumpTo=true This is not advice to anyone.

What you are talking about is called a Qualified Charitable Distribution (QCD). The IRS has a webpage about QCDs (https://www.irs.gov/newsroom/qualified-charitable-distributions-allow-eligible-ira-owners-up-to-100000-in-tax-free-gifts-to-charity) and you'll be able to find more information by googling that term. Both IRAs and qualified plans are subject to the RMD rules. All IRAs owned by the same individual are lumped together for purposes of RMDs, however qualified plans must each separately satisfy the RMD rules. In other words, if you have 2 IRAs and 2 qualified plans, you can take one distribution from either IRA to satisfy the RMD for both IRAs, but you must take a separate distribution from each qualified plan. Only a distribution from an IRA can be a QCD. Maybe. Clearly your client is over age 73 if they are looking at their RMDs. Are they retired from the employer who sponsors the qualified plan? Or are they a 5% owner of the employer? If either of those are yes, then they are required to take an RMD from the qualified plan this year, and that would have to be taken before they could roll over any additional amount to the IRA. You would also need to check that particular plan's rules to see if the distribution would be allowed; there could be restrictions on what they can do if they are still working or if they want to take less than the entire account. The QCD can be any amount up to $100,000 per year. Correct.

A hardship is not an eligible rollover distribution, so there is no mandatory withholding. There is 10% automatic withholding but that can be waived. I don't see a problem here.

It's called subrogation and is very common. Some states prohibit insurers from subrogating, so often fully insured health plans are prevented from doing so. Self-insured health plans are not subject to state anti-subrogation laws, so usually can subrogate more freely. The plan materials (plan document, SPD, etc.) should address the plan's subrogation rights. Usually, personal injury lawyers will send ERISA document requests to the group health plan sponsor at the outset to confirm whether the plan can subrogate.