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Oh, you sweet, summer child. 😇

One idea to consider: Spin off those 15 participants into Plan B, and then terminate Plan B and tell the insurer that they are required to treat the annuity contracts as distributed from Plan B upon termination. Another idea to consider: Determine if the 15 annuities are unclaimed property (e.g., bad addresses for participants; dormant accounts and no activity by participants). If so, the insurer is required to escheat the assets to the relevant state unclaimed property fund. ERISA will not preempt state unclaimed property law, because the insurer says that ERISA does not apply. Final idea to consider: Review Section 109 of the SECURE Act and related updates to Code section 403(b). Tell the insurer that the sponsor has deselected the annuities as investment options, amend the plan, and tell the insurer that they must treat the contracts as qualified plan distribution annuity contracts. Good luck and please respond with what happened!

There is a rapid expansion of providers focusing on small businesses. Some are specialty groups within major providers, offerings from providers of payroll and HR services for small businesses, and fintech start-ups are fully automated and that bundle plans in with investment, banking or other financial services. Here is a small sample: Guideline 401Go Human Interest Fidelity Advantage Schwab Small Business Betterment for Business ADP Paychex Paycom Paycor Ubiquity Simply Retirement Sharebuilder 401k Ascensus Vestwell ForUsAll Gusto Rippling With trillions of dollars at stake, we can expect continued expansion of high tech integration of plans with other financial services. We also already are seeing AI being applied to investment advice, financial planning, plan design and tax advice. From the perspective of having and maintaining a plan, we all know that company demographics, human errors, ignorance, and expanding regulatory complexity can easily derail plan accounting and cause operational failures. We can expect to see attempts to apply AI to these concerns. To borrow a conclusion from the British Journal of Clinical Pharmacology: "Like the iconic scene from Malcolm in the Middle, we must avoid finding ourselves unprepared for the unforeseen consequences of these powerful tools. As Dewey's famous line from the show reminds us, ‘The future is now, old man’, indicating that we already live in a time that was once considered the distant future."

I agree with everything everyone has said thus far, but I think a few practical points need to be put forth. First, if a plan is a start-up post Secure 2.0 signing, then whoever is the recordkeeper should "strongly encourage" the employer to implement the ACA provisions from day 1. In our case, virtually all did. Second, it is actually highly unlikely that a post effective date start-up has actually decided to move recordkeepers. In most case (not all, but most), there aren't sufficient assets to entice a successor recordkeeper to seek out that business, nor are salespeople interested because the payout is low. If a salesperson is going after start-ups or newer plans, it's because of a relationship with the advisor (and of course, they are the most important advisor on the planet gobs of new business if we do this one favor for them....) Indeed, many recordkeepers loathe startups to begin with (the payback is lengthy) end have back end "term fees" that discourage moving the plan early. There are some that move, and it is incumbent on our transition services team to verify status, and our document consulting team to engage the client to implement ACA at transition time, rather than 1/1/25. Our approach, is to accept startups, or many newer plans ONLY IF they implement ACA provisions to kick start asset growth (oh, and it's good for the client too.)

The business can fund the plan from whatever revenue they have. The Minimum Required Contribution to the Plan must be made in cash. The benefits that accrue to participants in the Plan have to be based on W-2 wages or Self Employment earned income. If the business's only income is on Schedule E it's likely there are no benefits to accrue to employees.

If this is a governmental, which is the only situation I could see this being permitted, you shouldn't be filing a 5500. Otherwise, what is the basis for moving qualified 401(k) plan money to a nonqualified 457 plan?

yes, while we are at it lemme suggest to modify BIS rules to be different hours for different sources. since we are going to calcuate every employee every year by hand anyway....

Should we pile on some "are there any LTPTs?" while we're workshopping this?

I’m sure it will be super easy to have the plan document and the admin system be set up for 2YOS anniversary years for the PS and the “switch to plan year” method for everything else.

I found the prior discussion and (1) it was related to tax returns and the deductibility of a contribution made by an extended due date on a return filed by the original due date, and (2) there was a revenue ruling or PLR cited where the deduction was allowed and so the extension was not invalidated. So my memory of the question was correct, or at least related, my recollection of the resolution was not - therefore, I think there is not issue following that course of action regarding 5500 extensions, filings and SAR timing.

An advantage of getting an extension of the time for filing a Form 5500 report (even if the plan’s administrator believes none of the extra time will be used) is setting up a delay about when one must deliver the summary annual report. Some administrators prefer to bunch all yearly communications into one delivery. Imagine a calendar-year plan that delivers in November or by December 1: • summary annual report (for the year ended almost a year ago), • revised summary plan description or summary of material modifications, • 401(k)/(m) safe harbor notice, • notice of automatic contribution arrangements, • notice of qualified default investment alternative, • notice about diversifying out of employer securities, and • rule 404a-5 information about account fees and investment expenses. Some might question whether bunching this many communications is appropriate disclosure. But for a plan that has a meaningful number of people who get paper, rather than electronic, disclosures, the efficiencies and expense savings might make this prudent.

No. That is not OK. Those beneficiary accounts must be kept separately- particularly because the RMD calculations are different, and because that is the regulatory requirement. His wife should have two IRAs. (1) A beneficiary IRA for the one he inherited from his father. Registered in her name and her husband's name. (2) An IRA with the amount she inherited from her husband's own IRA. She can move this to her own IRA, or to a beneficiary registered in her name and her husband's name.-her advisor should advise which of the two is more suitable for her. His niece should also have two IRAs. (1) A beneficiary IRA for the one he inherited from his father. Registered in her name and her uncle's name. (2) A beneficiary IRA for the amount he had in his own IRA- that too should be registered in her name and her uncle's name. They should contact the IRA custodian and have them fix these errors.

If it's a disregarded entity that means it is owned 100% by someone else, which I assume is a corporation. There is no partnership, because there is only one owner. If there were more owners it would not be a disregarded entity. Your corporation is selling the assets of the LLC, correct? (No rational buyer purchases equity interests and potential claims.) Just take the position that the employees have terminated employment due to the asset sale and pay them as terminated employees if the agreement provides for that. You could also treat them as employees affected by a change in control and terminate only with respect to them but I like the employment termination rationale better, and just vote to vest them if employment termination is not a vesting event. For the deficient language in the "deferred comp." agreement, I assume you will maintain responsibility under the sales agreement, but I don't know of the IRS auditing the fine print in agreements. It's usually just eager beaver attorneys and accountants in a transaction. Not legal advice, of course. Do your own due diligence, etc.

It’s regrettable that an IRA’s beneficiary let a custodian combine accounts with different histories and attributes. (Did the beneficiary, whichever one is your advisee, assent, expressly or impliedly, to the combination of accounts? Has the time for objecting to an account statement or transaction confirmation run out?) An adviser might warn one’s advisee that an individual remains responsible for correct minimum distributions, even if a custodian’s accounting no longer provides needed information. Yet, an adviser who’s comfortable with full-picture counseling might explain also that the IRS has little resources to detect mistakes in the amounts of minimum distributions. An adviser would provide advice that fits with one’s professional conduct. This is not advice to anyone.

The employer limit for the totality of the plan would be: Total employer contribution = .20(Net Schedule C - 1/2 SS taxes) + .25 (Total W-2 Wages) Ex: Maximum employer limit = .20(150,000 - 11,475) + .25(100,000) = $52,705 Is this the correct formula for a self-employed Schedule C filer?

Question - have you ever had a SAR filing date questioned by a regulatory authority or their auditor/investigator? I frankly can't imagine this being an issue in this situation. Wouldn't cause me any sleepless nights, at least...😁

Assuming you are talking about a DC plan, it is a circular calc; it boils down roughly to 25% of (covered) W-2 comp plus (roughly*) 20% of Schedule C. *There is an adjustment for 1/2 of SS taxes; after that it is 20%. Also note the Schedule C should reflect the employer contributions for employees, so if you are a TPA and are given the raw Schedule C by the accountant, you have to adjust for that as well.

To expand on "go back in time" (a great answer), a common approach is to terminate the plan of the acquired company before the closing of the acquisition and encourage the participants to roll over into the new plan. I am not a big fan of this, but it somewhat alleviates concerns about inheriting problems of the acquired company's plan and eliminates the grandfathering. I say "somewhat" because the acquiring company is probably stuck with the aftermath anyway (many plan participants will now be employees of the acquirer) unless unusual special arrangements are made for someone else (the stock sellers?) to be responsible for any post transaction problems. I don't like tempting participants to take distributions early because of the opportunity presented by the plan termination.

I can understand why an employer would like to limit withdrawals, especially in-service withdrawals, but if the plan is designed to allow the plan to be used as a bank, let it go. There are no regulatory concerns if withdrawals are in accordance with law (e.g. after age 59.5) and plan terms. I am a bit queasy about individual counseling concerning the wisdom of in-service withdrawals, but have no problem with a general statement that includes information that discourages withdrawals by pointing out the immediate and long term negative consequences.

If the plan doesn't limit them then I don't see an issue. They are entitled to take as many withdrawals as they want if the plan doc allows it. Why would you want to limit that?

If there is no plan restriction there is no statutory issue either, assuming all the proper tax reporting/withholding is happening. A pension plan can commence in-service monthly payments as early as age 59 1/2, so what's the big deal here? Just because something creates an administrative headache and isn't the most efficient utilization of one's account doesn't mean there is a statutory issue.

Merge the plans, and transfer the assets from the B plan into the A plan (preserving all of the separate sources and protected benefits). There are a lot of potential land mines in this process. Before taking any action, be sure that the controlled group is passing coverage testing and nondiscrimination testing. If it isn't passing, fix it before proceeding. If the benefits or eligibility requirements available under each plan differ considerably, the fix could be expensive - but the deal is already done so A is committed to cleaning things up. Passing post-merger coverage testing also will help answer whether A wishes to continue provide benefits to B employees. If A is not so inclined, be sure the plan will continue to pass coverage with that classification exclusion. A merger very likely will end the transition period safe harbor, so again, anticipate the impact this may have on particularly on ADP/ACP testing. There are some quirks that often do not appear in discussions or commentary about mergers but they can have a significant impact. For example, determining the HCEs is after the merger is done on the basis of the controlled group which involves considering how B employees' compensation in the look-back year is determined. If one of the plans uses top-paid group rules, then neither plan can use the top-paid group rules. This is just a sample. Alternatively, A could freeze the B plan and have the B employees participate in the A plan. That leaves A with maintaining 2 plans. Or, A could terminate the B plan and allow B employees to participate in the A plan, and then deal with the successor plan rules applicable to B employees (which is what you wanted to avoid.) One last note, if neither plan is subject to an IQPA, then keeping the plans separate may be less costly administratively than having the A plan become subject to an IQPA.

Usually one of three ways: 1. Maintain both plans separately 2. Merge the plans 3. Go back in time

@metsfan026 you (facetiously) must really be looking forward to dealing with PLESAs (Pension Linked Emergency Savings Accounts). Four features in particular will make administering PLESAs a lot of fun: They are Roth accounts. Participants can withdraw funds at their discretion. The first 4 withdrawals cannot be subject to fees or charges. Participants can replenish the account after taking the withdrawals. This almost makes the plan you are working with seem reasonable.

1. Does the plan limit the number of in-service distributions? If not, why would it be excessive? 2. Does the participant pay a distribution fee each time? If so, might want to have a discussion with them to understand the consequences.