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Check the BPD - it should say that for a self-employed individual their compensation is their net earned income from self-employment, so whatever AA option gets checked I don't think it matters much.

Exactly! Whenever I see the phrases "husband and wife" and "cash balance" and "overfunded", I wonder if the last one is true. Has there been a real 415 test? A consulting actuary would ask lots of questions, which might include: Why is a husband/wife plan structured as cash balance rather than traditional DB? Do the participant(s) have health status that impairs insurability? What is the magnitude of any "overfunding"? What are the ages of the participants? How soon do the participants plan to retire/cease working? Are there others (e.g., children) that might join the business? Do the participants plan to choose a lump sum distribution (at some later date) or choose a J&S payment form? Does the business also have a DC plan? A really good consulting actuary will explain to the plan sponsor how these questions are inter-related.

We actually got a CP283C letter from the IRS for a late 8955-SSA today - it was missed filing before 7/31/2025 and no extension was filed. The 8955-SSA was filed before the extension date of 10/15/2025. Because the plan sponsor signed the 5500SF on 7/30/2025 we pulled the extension and forgot about the Form 8955-SSA until later. We will write a letter and explain and hope the waive the $1,280 penalty. Kinda dumb to have a penalty for this form.

Putting insurance in a pension plan is usually a great idea if you are the agent making the sale. Your client should talk to their accountant and/or financial advisor (not the one selling him/her the insurance) and determine if it makes sense from a long term financial perspective. It might be a great idea, but more likely a its a horrible idea.

Beyond Artie M’s suggested cautions: Under the Treasury department’s rule, the exception from the safe-harbor regime’s full-year condition is “[t]he plan termination is in connection with a transaction described in [Internal Revenue Code §] 410(b)(6)(C)[.]” 26 C.F.R. § 1.401(k)-3(e)(4)(ii) https://www.ecfr.gov/current/title-26/part-1/section-1.401(k)-3#p-1.401(k)-3(e)(4)(ii). Ending the target’s plan sooner than the § 410(b)(6)(C) transaction requires might call into question whether the termination is sufficiently “in connection with” that transaction. In my experience, it’s typical for employee-benefit plans’ changes to be conditioned on the closing, and aligned in time with the business transactions’ effective time. This is not advice to anyone.

Unless you’re also in the business of providing tax or legal advice we only provide a recommendation to seek such professional counsel.