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I have a client that has a 6 month 498 hours wait for deferral and 6 month 1,000 hours wait for profit sharing, with quarterly entry. My question is: If a participant does not satisfy the required number of hours in the first 6 months, on what basis do you continue to track the hours before they are allowed into the plan?

I believe that you continue to track it quarterly until the end of the plan year, and if they do not satisfy the hours requirement by then, they essentially start over next plan year and as soon as they hit the required hours they are let into the plan on the following quarterly entry date. 

Am I looking at this incorrectly?

Having a brain freeze due to 10/15 - worse ever.

Have not come across the following in quite sometime, a bit confused.

DB plan.

Client turned 73 early 2026 so RMD is due 4/1/2027.

A two part question with the assumption plan terminates during 2026:

Scenario one - distribution occurs during 2026 therefore he needs to take an RMD during 2026, correct?

Scenario two: - distribution occurs in 2027, what are the RMD requirements, one for 2026 and one for 2027 as distribution occured during 2027?

Thanks

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I've got a plan that was brought to me to fix.  The financial advisor (!!) accidentally wrote the plan with immediate eligibility... figuring that the statutory exclusion would 'override' that and keep out all of the employees who work 5-10 hours per week.  Sigh.  There are other problems, too, so I'm recommending that they terminate the plan and we start over (keeping in mind successor plan rules, of course).

As I'm calculating missed deferral opportunities, many of the affected participants are getting total corrections of ~$20.  They don't have accounts in the plan (of course), so when we get them set up they're going to request a distribution (many are also terminated), and they won't see that money, as it will all go to pay plan distribution fees.

I know that EPCRS 6.05 has language about not correcting small amounts, but I don't know if that is applicable here.  I was hoping to do something like split the total correction amongst the affected employees who are above the distribution fee limit... and tell the others that their correction is below the plan's distribution fee threshold so they don't get anything.

Is this OK?  Are there other possible remedies?  Thanks.

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It appears there is an exception to the 2 year hold rule for SIMPLE IRA plans that are replaced by a safe harbor 401k mid-year.  However, does the same rule apply if the SIMPLE IRA terminates on 12/31 and the safe harbor 401k is effective 1/1 of the following year.  The exception seems to only apply to mid-year changes. Is that right?

We have been asked to prepare a Form 5500, due next week.  The ADP test was not performed and we do not have enough information to complete the test.  If we complete the IRS compliance questions on the return with a footnote "Prior year test - test incomplete" will the return be rejected?

Can a safe harbor plan be amended mid-year to disallow super catch-up contributions?  In other words, is such considered a prohibited mid-year change?  Based on my reading of Notice 2016-16, the answer appears to be no, so long as the notice and election opportunity conditions are satisfied.  Is that correct?

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Our company is considering entering the Pooled Employer Plan (PEP) business as a PPP and recordkeeper. A couple questions:

1) Who are the main plan document providers for PEP documents?

2) Is there a Cycle 4 Pre-Approved PEP document?

3) What is the format of PEP documents that would have just a few Adopting Employers? Main Document + Each Adopting Employer sign documents, or just each Adopting Employer

Client is a dissolved company with 21 shareholders. Safe harbor and profit sharing contributions to 401k plan have not been made yet for 2025. Plan is terminated and all employees/shareholders have rolled over their account balances. The company has no money left. Currently working on reaching out to shareholders to make capital contributions, but many of the former shareholders have gone MIA. I thought of maybe having the termination undone, rescinding the safe harbor status of the plan and conduct testing, in order to get out of the company having to make over $300k in safe harbor contributions, but the recordkeeper confirmed that there are no assets remaining in the plan. Pretty sure you can't undo a termination if there are no assets. Any ideas are welcome.

Suppose a participant did a direct transfer rollover from a terminated defined benefit plan into the company 401(k) plan and subsequently terminated employment.

If the 401(k) plan normal form of benefit is a cash lump sum, must the terminated participant's benefit elections contain a QJSA option. In other words, since a portion of their benefit will be a rollover from a prior defined benefit plan, does the participant's entire 401(k) plan benefit need to retain the annuity provisions of the rolled over pension benefit?

Thanks.

In the past 1 1/2 months, both Houses of Congress passed a bill intended to provide a safe harbor if an outside expert did a valuation of the stock. I have not seen anything further about it. Did the President sign or veto the billl? If neither, doesn't the Constitution treat it as enacted if the President fails to take action (i.e., sign or veto) the bill?

Hi - 

I am a member of the Directors Guild of America. I work as a production manager running television shows for various studios and production companies. I have an s-corp/loan out company that receives fees for my services. Besides those fees, my s-corp also receives residual payments from previous shows that make up a smaller part of my income. My s-corp pays me a W2 salary and distributions. I do not own a controlling interest in any of the companies I production manage for, and I don't have an overall managerial role in any of these companies. I run one show at a time for these various companies that produce dozens of shows at a time (Netflix, Paramount, NBCUniversal, etc). 

For retirement, I have two defined contribution plans:

1. DGA Supplemental Plan: A multi-employer money purchase plan. The employer (production company/studio) makes contributions to the plan. In addition, there are mandatory after-tax employee contributions (not salary deferrals) fed into the plan. In my case, a payroll company deducts these employee contributions from the payments to my s-corp. *My s-corp is not signatory to the DGA and has not made/will never make any direct contributions to the DGA Pension Plans.

2. One Participant 401k Plan: I am the only participant. All of the elective deferrals, profit-sharing contributions, and VAT contributions are calculated properly, and the VAT ---> Roth 401k   conversions are done to the letter. There have been no §402(g) or §415(c) excesses.

The newest version of the DGA Summary Pension book has a poorly written section about the possibility of aggregating a member's loan-out defined contribution plan and the DGA Supplemental Plan's contributions under one §415(c) limit in certain circumstances if the member terminates their plan before the DGA Supp plan pays its benefits at retirement. It goes on to imply that this aggregation will only triggered if the s-corp/loan-out contributes directly to the DGA Supp Plan. However, the wording is so vague that I want to be 100% certain it *only* gets triggered if my s-corp/loan-out contributes directly. Naturally, I am trying to get clarity from the DGA Pension Plan, but it has not been easy. I spoke with them twice, and the conversation was frustrating. I also sent an email and am waiting on a response. In the meantime...

I can understand aggregating the limits if my s-corp made direct contributions to the DGA Pension Plans. However, is there any precedent for aggregating the limits in a situation like mine, where that didn't happen?

I know this is a lot, but I've searched back on several threads here (a famous one from 2002!), and I cannot seem to find a straight answer anywhere. My CPA is no help, as you can imagine. Any opinions would be greatly appreciated.

Thank you,

JF

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Trying to determine if a potential new client is an Affiliated Service Group.  I don't think it is, but I wanted to be 100% sure:

Client is a management company, working with 40+ different affiliates.  While they have an ownership stake in each one, it is far less than the requirement to be a Controlled Group, and each individual affiliate has a different owner.

They perform management functions for each one, but obviously with more than 40, no one affiliate represents at least 50% of their functions (nor does it satisfy the receipt test)

From the way I'm looking at it, it wouldn't be considered an Affiliated Service Group but I wanted to be 100% sure.  Thanks in advance!

So we taking over a Cash Balance Plan that's terminating and distributing the money to the participants (2 owners and 1 employee).  It's a non-PBGC Plan. 

The Plan is fully funded, and also has a credit balance displayed on the previous SB.

My questions is, how do we handle the Credit Balance on the final SB?  Is it still displayed, even if all of the money is distributed from the Plan?  Should the assets be distributed, with an excess given pro rate to the three participants?

I just want to understand what the process is so I can help out.

Thanks in advance!