Hi, 

Plan is terminating due to asset sale and the sale will happen December 1st 2022.  Regular pay roll end on Nov 30th however they will be retention bonus post acquisition .  The terminating employer will happen they EIN and will be a participating employer. 

I feel this might be a controlled group or lead to a controlled group - Is it possible? 

Can they make the bonus payment post the plan termination? The plan will terminate in December and they are likely to start the process in Feb 2023. 

Can the seller be a participating employer? 

Thanks

If the change to the welfare plan is only service providers, but actual contributions, benefits, eligibilties etc all remain the same, is an SMM actually required? Or is it sufficient to provide this information on the annual Open Enrollment paperwork?

401k plan participant account incudes appreciated employer securities and mutual funds

The participant wants to transfer a portion of his appreciated company stock to a taxable brokerage account while rolling to an IRA the balance.  Mutual fund balance would also be rolled to an IRA ensuring a lump sum distribution.  More specifically he want to rollover the stock basis to an IRA (thus avoiding paying income tax on the basis) while transferring NUA portion to a brokerage account (avoiding LTCG tax until he sells the stock).  Thus leading to no immediate taxation 

From my research the IRS has blessed this NUA strategy in a series of PLRs.  My question(s) are regarding the order and method of transactions.

For example does the stock need to be distributed first (before the mutual funds) or vice versa?

Furthermore, does the ordering of employer securities rollover/transfer matter?  For example, let's say the participant has $100,000 in stock ($10,000) is basis where the remaining $90,00 is NUA. Can the $100,000 be split (90/10) in a single transaction by a IRA rollover and transfer to a taxable brokerage account? Does it matter if the stock is moved via trustee transfer vs 60 day rollover?

All help is appreciated. 

Does anyone know what, if anything, is required to be covered in terms of mental health benefits for a self-insured, non-grandfathered plan?

Hi, 

Sponsor wants to terminate the ESOP plan due to merger/acquisition. Its an individual design plan, Plan is terminating due to acquisition and the stock funds to be liquidated and transfer proceeds to Money market funds. There is a black out period until the processing of the merger proceeds is completed. The liquidation and settlement will be completed the week on 09/19/2022.  The sponsor intends to inform the part's that they have option to rollover into IRA, rollover into their 401k plan or the new employer 401k Plan or take cash distribution.  They are filing for 5310.  Is there something we will need to consider since they are filing for 5310 or just follow the normal termination process. 

Thanks

I just wanted to double-check if this would be considered a controlled group or not:

Company A - Husband owns 100%
Company B - Wife owns 100%

The two business, while in the same industry, are completely unrelated and the spouses do not work or do business with each other.

So would this be a controlled group through attribution or are they excluded?

Executive spends 6 months in US an 6 months in foreign country.  Paid for part of the year in each country.  US comp is just under $130,000.  If  the Chinese comp for the work done in China counts towards being an HCE, then he would be an HCE.

Does it count?  My definition of comp for 415 is w-2 wages...

I have a multiemployer 401(k) plan that is comprised of 20 employers, with all participants collectively bargained (i.e., there are no non-union employees in the plan), and all part of the same CBA.  When performing the ADP testing for this plan, would I test each employer on its own or am I required to test the entire population as one employer?  The regs indicate that I must test the entire plan as one employer, but I could have sworn that testing for multiemployer plans was always done on an employer by employer basis.  (Meaning for this plan, if 19 of the 20 employers had no HCEs I could ignore those groups and just test the 1 employer that has an HCE).

Perhaps what I always thought was the case has simply always been wrong.  Any help is appreciated!

Takeover document for 2021 limits 401(k) contributions to 17% of pay.  Some are over that % for 2021.  Are those considered 402(g) or Excess 415 contributions?  

Without judging the setup of this company's legacy multiple retirement plans, they have the following:

• One plan for all employees
• Each partner has their own plan

(not related to this question, the plans are tested as one controlled group, all plans mirror each other and all participants have the option for self direction)

Situation:  A new Partner has set up a new plan, and ultimately contributed $400 for the past plan year (prior to plan year end), simply to get the trust set up.

Inasmuch as a one-person plan with less than $250k does not need to file an EZ, my understanding is that because of the controlled group situation, a 5500-EZ is indeed required in this case.

Curious of any thoughts or differing opinions?

I have a client that maintains a solo 401(k), and while meeting with them to prepare their plan restatement, it appears that they let their two children work part-time during 2020 and 2021.  The plan document provides no conditions for eligibility, and only excludes non-resident aliens and union employees.  So, it appears that the children should have been allowed to defer to the Plan and their missed deferral opportunity constitutes an operational failure.  As a result of the daughters working as part-time employees, it appears that the Plan can no longer be considered a solo 401(k), and thus must now:

1. Distribute a Summary Plan Description.

2. File a Form 5500-SF instead of 5500-EZ.

3. Must now perform non-discrimination testing

4.Must now perform coverage testing.

5. ....?

Is there anything else I may be missing?  Upon review of EPCRs, the missed deferral opportunity itself seems like an "insignificant" operational failure, and thus eligible for SCP, but concerned that the overall effects of making it no longer a Solo 401(k) may require a VCP correction.  Any other thoughts?

An Adopting Employer left a PEO in 2021. For the 2021 Plan Year, there are 106 participants as on 1/1/2021. Does the Plan need a 5500 with audit for 2021, or can it file the 5500-SF under the 80/120 rule? 

For participant loans that are being refinanced, can the maturity date go ever go past 5 years from the original loan?  https://www.law.cornell.edu/cfr/text/26/1.72(p)-1, 26 CFR Section1.72(p)-1 Q-20, has that if the replace loans satisfies Section 72(p)(2) and this section determined as if if the replacement loan consisted of two separate loans; to the extent the amount of the replacement loan exceeds the amount of t he replaced loan, a new loan is amortized in substantially level payments over a period not later than the last day of latest permissible term of the replacement loan.   So if a refinanced loan is less than the available amount is it treated as a new separate loan and has a maturity date from the refinanced loan date and not the date of the original replaced loan?  Q-10 makes it sounds like it can.  Is there any other clearer direction than Q-20?

Is it permitted to name a non-US citizen as a beneficiary for a US 401k plan?  The intended beneficiary is not a US citizen, does not live in the US and does not have a US social secuity number.

Thank you

I have a client with an individual 401(k) that has not reached the 250k threshold in that plan; however, he does have a DB plan for the same business, that is over 300k. The person who administers that plan and files that 5500 stated that I should be filing a 5500 for the 401(k), due to aggregated assets in both plans. He has not made contributions in several years, as the business was dormant. Do I need to file a 5500 for the 401(k)?

For plans that file 5500-EZ, but have 2 participants, typically owner and spouse, and the plan has one 'pooled' trust, I'm thinking the following are not needed:

• List of Investments
• 8955-SSA (for retired spouse) - This was previously an attachment to regular 5500 and is filed with the IRS, so doesn't seem like it would be filed

Is the 100% of comp shown below (pasted from IRS site) a typo and should really be 25%? Or is the non elective ER contribution to a SAR SEP IRA (a grandfathered SEP IRA that allowed ee deferrals) allowed to be up to 100 % of comp? Thank you.

May an employer contribute to the SARSEP for its employees?

Yes, the employer may make non-elective contributions to the SEP-IRAs of its employees subject to an annual addition limit. The annual addition limit is the lesser of 100% of the employee's compensation (limited to 305,000 in 2022, $290,000 in 2021, $285,000 in 2020 and $280,000 in 2019, subject to annual cost-of-living adjustments) or $61,000 in 2022, $58,000 in 2021, $57,000 in 2020 and $56,000 in 2019, subject to annual cost-of-living adjustments). In determining this limit, all

Hi

XYZ DB plan is terminated with overfunded assets (100k).

All participants elected to rollover their distributions to XYZ PS Plan. Total was 1M

The overfunded portion was deposited into the XYZ PS plan (under qualified replacement plan rules - QRP) as excess DB assets to be allocated in the future.

In preparing the final 5500 form (2021 plan year) for the DB plan, I am confused by 2 lines:

8j and 13c

Are any of the above assets considered as transfers?

I do not believe the participant rollovers of 1M are (they were directly deposited into the DC plan accounts from the DB plan but as rollovers)

How about the QRP portion of 100k as also was directly deposited into the DC plan account from the DB plan account.

Thank you

I have an employer that employs select employees to work in medical and laboratory settings  ( small percentage of the employee population).  The employer provides vaccinations, TB testing, vision screening, initial health screening, blood pressure checks, first aid for work-related injury and illness evaluation, treatment, and case management, research lab exposure emergency access and follow up; and  blood and airborne pathogen exposure valuations. Many of these "health plan" services provided on-site are required under OSHA.  The services are not provided to other employees who don't work in the medical and lab settings. Although the services go beyond the limited on-site exception for ERISA, we can take care of documents and Form 500 reporting.  I also am fairly  comfortable that the services are either preventive or not significant for HSA participation for any of these employees in the HDHP. 

The critical issue is COBRA. The services go beyond the limited on-site clinic exception for COBRA. By law, the employer cannot provide these services to non-employees. COBRA doesn't specify where services will be performed  so for other employers who offer vaccines and limited tests, we offer COBRA and send employees to a drug store.  However, in the current situation there are multiple services and referrals to a outside providers would be difficult and expensive.   

The employees are required to have the services to perform their jobs and many are required by law.  From a policy standpoint this makes no sense to require COBRA for health services required for a job when the employees are no longer employed.

Any thoughts?  Hopefully the agencies will one carve out limited  on-site programs. 

Single member company wants to invest in a UK based company.  The company is not publicly traded.  Are there mixed thoughts?  Can it be done?

Thanks