Does anyone know of a document vendor that has a Money Purchase plan with mandatory employee contributions (not a governmental plan). 

Question regarding the management group analysis under 414(m)(5).  I have four entities which none qualify as parent/sub or brother/sister controlled group members amongst each other.  One of the entities definitely provides management functions for the other three, but none of the three recipient organizations provide more than 50% of the gross receipts to the potential management organization.  

I know that organizations related to the recipient organization are included as part of the entire group, but I believe that analysis is scrutinized after the determination of whether a management group even exists.  In other words, if I am incorrect and  the three recipient entities above were combined prior to the management group analysis is performed, then the combined gross receipts of all of these companies would be above 50% and thus constitute a principal business.  I don't think that is the case, but I wanted to hear from others.

Maybe I'm just realizing this later than everyone else, but since the rates are changing monthly, are we in for a bunch of timing headaches?  Specifically...

1. My efficient assistant prepared the report and statements in April... and I'm just now getting to reviewing them.  It used to not be a big deal because no numbers changed.  But now I have to re-run the lifetime income disclosures because the interest rates aren't the same now as they were three months ago (or they might be, maybe... better not take the chance!).

2. Let's say I actually did send the statements with disclosures back in April.  Plan sponsors being plan sponsors, the package sat on their desk until I reminded them that they actually need to open it and do something, so they don't hand the statements and disclosures out until July.  Are the disclosures that we prepared back in April no good?  Would the participants ever know or care?

3. The interest rates update near the end of the month (according to the updates I get from my recordkeeping software provider).  Does that mean I'm on hold with sending out reports near the end of the month so I don't accidentally force a client to hand out a disclosure notice that is 'behind' by the time they hand it out?

These sound ridiculous... but that doesn't mean they're not how the rule was written.  Of course, then there's "written" vs. "interpreted"... anyway, am I working myself up over nothing?  Thanks.

Small business has discovered that it did not contribute enough in the past 4 years.  They are making the correction and will make a contribution to make whole the contributions for the previous years. Can they deduct everything this year (the year the contribution is made for correction) or do they have to go back and amend the previous 3 years returns to show the deduction for the year it should have been made?  Any direction would be appreciated.

Anyone know of a company with a 401k plan with roth conversion available for PRE tax contributions ? This is separate from a different somewhat common plan feature of roth conversion for AFTER tax contributions to assist a so called mega back door roth. Yes I know something like what I am asking can be done in IRA but then you cant put it back inside an ERISA protected 401K.

Welfare plan, the first year for one of the benefit plans included commissions & premiums for 2 years in their schedule A.  The following year, no Schedule A information was provided (since it was already reported the prior year).  There will be a Schedule A provided next year.  For the year commissions & premiums are zero, do you file a Schedule A or skip a year?

XYZ US and XYZ UK are commonly controlled business organizations.

XYZ US maintains a 401(k) plan. XYZ UK is not a participating employer under that plan.

Martha ends her employment with XYZ US on June 30, and becomes XYZ UK’s employee on July 1.

If employment by a business organization commonly controlled with the 401(k) plan’s sponsor otherwise would mean a change is not a severance-from-employment, is there anything that varies such a rule if the next employing organization is outside the USA?

Has anyone had any experience with New York State withholding on a minimal distribution.  Participant receiving about $1,200. wants to withhold about $300. 

How does the client report this. Assuming on Form 945.  How do they pay it? Client uses Paychex, they cannot give them any guidance.

Any help would most appreciated.

Thank you.

Richie

Have an owner who just reached Age 72 on 6/14/22. Plan Year is 4/1/21- 3/31/22. Under Secure 2.0 he has to take his RMD by either 12/31/22 or 3/31/23 (if he takes 2 RMD's in 2023). Two questions:

1- Do I use the value of his Account Balance in the Plan at 12/31/21? Or use the valuationAccount Balance at 3/31/21 or 3/31/22? If I have to use 12/31/21, an interim valuation would be required.

2- I have read that the senate and house are working on a bill extending the RMD to 73 in 2023.  Would that help him in any way?

Thank you for your help.

Richie

An IRS-preapproved plan’s adoption agreement has a fill-in for the effective date of the cycle 3 restatement.

(But that date does not apply to a provision for which the basic plan document, the adoption agreement, an “addendum”, or something else in the IRS-preapproved documents specifies a special effective date.)

Imagine the user’s plan has for decades used the calendar year for the plan year, limitation year, and other provisions.

If in July 2022 a user specifies a date on the fill-in for the general restatement date, what would you choose:

July 31, 2022?

July 1, 2022?

January 1, 2022?

Something else?

What is your reasoning for the restatement date you choose?

DB plan terminated in 2018. The two participants received max lump sum, and the excess went into a QRP. The two original DB employees are no longer on payroll, so no 95% issue. There are now new employees including a new owner. Remaining unallocated assets are over 1 million. Can we set up a new DB qualified replacement plan using the remaining unallocated assets.   

Our client has an interesting situation:  A participant whose divorce became final ON her annuity starting date.  The plan administrator was aware of the pending divorce, but could not suspend payments (as it normally would under QDRO procedures) because the participant had also reached her required beginning date under the RMD rules.  The administrator did not receive the final decree until a few months after the ASD/RBD, and brought the participant into pay status with a QJSA because they believed her to still be married on her ASD.  

Under state law, the participant was not married on her annuity starting date.  My thought is that the participant should be permitted to retroactively elect a life annuity.  However, I'm curious if anyone has ever seen a similar situation and how you handled it?

A participant executes a beneficiary designation naming her son as beneficiary.  She was not married at the time of the designation.  Within a year, she gets married.  She does not change the beneficiary designation and does not have her new spouse sign the consent.  She passes away.  Under the plan, the new spouse is the beneficiary because he did not consent to the beneficiary designation.  The new spouse wants to disclaim.  Does his disclaimer, where he is treated as predeceasing the participant, revive the previous beneficiary designation such that the son becomes the beneficiary?   

Single-employer defined benefit plan is terminating this year.  The plan is distributing the assets through the purchase of annuities from an insurance company for those participants who don't take a lump sum at termination. Participants can elect an immediate annuity that will commence benefit payments right away, or they can elect a deferred annuity and can commence benefit payments any time after plan termination - even if they are still employed by the company at the time they elect to begin benefit payments.

The plan currently has an RMD provision that does not require distributions until the later of age 72 and termination of employment.  Does that rule continue to apply after the plan is terminated to the participants who receive a deferred annuity?

In other words, does the insurance company have to verify employment status witht the plan sponsor for those annuitants who are 72 or older to begin RMDs, or does the participant's employment status not matter for purposes of RMDs under Section 401(a)(9) once the plan is terminated (or RMDs don't apply at all)?

I’ve been working more and more with combination cash balance / 401k plans, and have been looking to gain additional knowledge of 401k plans in general.  Are the QPA, QPC, QPK designations worth obtaining for a retirement FSA or would just familiarizing myself with the various rules and regulations be good enough ?

While restating a plan document prepared by another service provider, I see a limit on the rate of 401k for HCE's of the current dollar limit divided by the Comp limit.

Considering that the ADP test takes into account discrimination issues, what would be the purpose of this limit?

Husband owns 100% of a real estate agency (single-member LLC) with one employee who is eligible for benefits.  Wife owns 100% of a law firm (single-member LLC) with no employees.  Husband and wife have two minor children so this is a control group.  Husband received a 401(k)/Cash Balance illustration just for him and his employee - these will be start-up plans - that assumed no PBGC coverage (the illustration was from some "online" 401(k) company).  Husband wants this plan design but has wisely chosen to use a local TPA and financial advisor.

This guy definitely does not want to deal with PBGC insurance premiums because the illustration and quote he received from that "online" company assumed there would be no PBGC.  Can the wife's law firm sponsor the Cash Balance Plan, give her a 0% benefit in the Cash Balance plan, and have the plan exempt from PBGC?  Testing is fine and I haven't found anything that would prevent this but I don't know that I'm 100% comfortable with it either.  I would really like to hear other opinions and hopefully someone has come across a similar situation in the past.

Somehow a participant started his pension on a QJSA without actually being married - he was divorced prior to initiating his benefits and apparently just lied on the application? That participant has now died and the lack of marriage discovered. No payments have been made to the would-be surviving spouse. Any thoughts about how the plan should correct for this, if at all?  The plan has not been made aware of any QDRO. It seems to me that the plan is just done now, and doesn't have any obligation to pay out the difference between what his SLA would have been and what the QJSA was. 

I have a company who has never funded their ESOP with cash (non leveraged, S Corporation, all company shares are held in the ESOP, 9 active employees, 8 terminated employees).  When employees are entitled to distributions, they fund the trust account with the distribution amount(s) and payout the employee.  I allocate the amount(s) contributed during the year as contributions to eligible employees who then repurchase the terminated shares.

The employer now has a problem as the distributions are becoming much greater than 25% of compensation of the eligible employees.  Their accountant told me that the company is not deducting any of the "distribution contributions" on their corporate return.  I have to allocate the contributions based on compensation and I believe that they have nondeductable contributions and need to pay an excise tax of 10% on the amount greater than 25% of eligible wages. CPA disagrees.

Has anyone ever come across this situation?

Thank you.

I have a client that has stopped depositing the employee deferrals.  There have not been any deposits since January of 2022.  We had to beg and do manual entries to get some of the payrolls in that did go in.  It's a very small doctors office and the plan is safe harbor and new in 2020, the year she started the practice.  The plan has automatic enrollment and there were employees that have become eligible in 2022.  We have emailed, texted and called and we aren't getting any response.  We have sent a certified letter letting the doctor know that we are resigning.  The question is should we report our client to the DOL for not depositing the payrolls?  We are signed on as a Fiduciary on the Investment Advisory side, we are also the TPA, but not a 3(16) so we aren't a fiduciary in that capacity.  Part of me wants to report it, but then I guess I can't say with 100% certainty that there were deferrals withheld that haven't been deposited, I guess only someone in the office would know that for sure.  I'm curious to hear what others think they would do in this situation.  Thanks in advance.