As I understand it, sole proprietors and partners are considered to have their income determined on the last day of the year.

How does that work in a short plan year?  I have two examples:

1)  Plan year 10/1/21 to 12/31/21.  Effective date 10/1/21.  Does everyone use pretty much 1/4 of their comp, but the owner gets to use all of it (subject to the comp limit and 415 limits) because it was all "earned" on 12/31?

2)  Plan year 1/1/21 to 6/30.  Everyone gets comp for first half of year, 415 and comp limit are pro-rated.  But Partners get zero comp, therefore zero benefit because they earn their comp 6 months later?

Hi

Calendar DB plan with EOY valuation. 1 Lifer

Date of termination 4/1/2022.

Need to run the final val. 

Under automatic, is my new val date 1/1/2022 or 4/1/2022? I think either is fine but want to double check.

Thank you

In MA, the pension plan allows participants to retire after 10 years and attaining age 55.

If a participant takes a leave of absence due to medical reasons from April through August, can this participant be denied a pension if he decides not to go back to work.

The participant completed 10 years of service and age 55 during this time period. 

Employer deposits match and a "profit sharing" each pay period for everyone (who is supposed to get each).

They missed one guy for a couple payrolls in 2021.  (Deferrals went in fine)  They deposited the missed contributions the other day.

Given that the contributions need to be deposited by the time they file their taxes, do I need to bother withy earnings?

(Let's assume the taxes weren't filed yet)

I understand penalty a and b calculations. I also see that b calculation will never be larger than a according to IRS guidance. If business has 59 Fte (so they are an ALE) but *only* 28 truly full time employees then they are shielded from both penalties, no?  Because when you subtract the “free” 30 off penalty a they would be at $0.  So, even if 4 people go and get PTC their penalty A would be $0 and their penalty B wouldn’t kick in because B can’t be bigger than A it says. So, anyone with 30 FT all year (or less) is protected from penalties, yes? 

Terminated DB plan transferred overfunded assets to QRP.  Currently they are still in the 7 year period to allocate.  If the sponsor is looking to sell the company, can the new sponsor keep and allocate the suspense assets or does the excess have to revert back to the original sponsor?

Hi,

Thank you as always for all the knowledge and help. A PS Plan is under audit. The agent is questioning why three participants  (terminated in 2012 )are shown with 100% vesting if based on their years of service they should only be 60% vested. The answer is correct, their vested percent should only be 60% , however, the unvested amounts were forfeited and used to reduce the contribution back in 2016. Therefore, their remaining account balance  is all vested and that is why the report shows them with 100% vested balances. Question- Can this response  open up any potential issues?   Thank you.

Pension plans typically offer JSA options (50% through 100%) that name the spouse as beneficiary and which satisfy the QJSA rules. However can the pension plan offer a JSA option for a non-spouse beneficiary such as a child? Of course spousal consent would be required but I never saw a plan offer a JSA option for a non-spouse beneficiary, such as a child? Any issues or concerns here?

Hi, we have a participant who made deferrals with 2 different plans (one of which we administer) in 2021. He contributed to Plan A (we do not administer this plan) in the first half of 2021 (until he left that company) and to Plan B (the plan we administer) in the second half of 2021. The participant is under the age of 50, so not catch up eligible.

About a month ago, he contacted us and told us that he exceeded the 402(g) limit between the 2 plans and sent us a statement from Plan A showing that he contributed $9,500 with Plan A. He contributed $12,000 with Plan B, so his total deferrals for 2021 were $21,500 (so $2,000 over the limit). We processed the corrective distribution for $2,000 (plus gains/losses).

He contacted us a few days ago saying that the statement he sent us from Plan A was incorrect. The correct contribution with Plan A (he also sent us W-2 to confirm) was actually $8,500 (not $9,500). So, the participant was actually $1,000 over the limit (not $2,000). He already cashed the corrective distribution check.

What would be the best course of action to correct this issue?

Thank you.

Is a calendar year plan that terminated on 12/31/2021 exempt from filing a PBGC Form 4010 for the 2021 plan year (due date is 4/15/2022)? The PBGC Form 500 is scheduled to be filed on 4/29/2022.

I have a client who is an S-Corp.  They get a W2, but also took what the call $70k in "distributions" as bonuses that are not included in their W2 for the year.

The question is, do those "distributions" count towards compensation during the year or is it excluded since it is not part of the W2?

We had a client whose plan had been a large plan for several years, and filed the 5500 and an audit report.  They terminated their plan mid 2021 and rolled all balances into the plan of the company who acquired the former plan sponsor.  The  new TPA is telling me that they are not required to file the 5500 for 2021, but can file the 5500-SF.  I though it was based on participant count at the beginning of the plan year. (which was over 120)  Obviously, they had zero participants at plan year end.  Thanks for any insights.

Is anyone aware of where I can get my hands on a table to calculate the lifetime income figures?  I have a couple of plans where we're not using Relius, so I want to be able to calculate the disclosures manually.

Anyone know where I can get those tables?  I mean they must be out there somewhere...

We had a client whose plan had been a large plan for several years, and filed the 5500 and an audit report.  They terminated their plan mid 2021 and rolled all balances into the plan of the company who acquired the former plan sponsor.  Their TPA is telling me that they are not required to file the 5500 for 2021, but can file the 5500-Sf.  I though it was based on participant count at the beginning of the plan year.  Obviously, they had zero at plan year end.  Thanks for any insights.  

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A good number of DB Plan customers want to offer variable annuities as a distribution option to retiring plan participants but they are raising 415 limit concerns with me because the annuity payout is based primarily on a stock index and a rising stock market could cause a 415 limit violation in any given year. Pursuant to 415(b) the annual benefit for 415 purposes is a straight life annuity with equal installment payments. Pursuant to the 1.415(b)-1 regulations, there must be an adjustment to a variable annuity so that it is the actuarial equivalent of a straight life annuity beginning at the same time. Further, the regs. address a payout with an "automatic benefit increase feature", where certain complex annual limitation requirements must still be met, and it seems that a variable annuity which automatically adjusts the annuity payout based on the performance of a stock index could be an automatic benefit feature. Then there is example 10 of 1.415(b)-1(c) which seems to address a variable annuity and states that 417(e)(3) does not apply and that to determine the actuarial equivalent of a straight life annuity a 5% interest rate return on assets must be used.

This is somewhat confusing to me so does anyone have experience determining whether a variable annuity whose payout is based on a stock market index or performance, meets the 415 annual payout requirements, and if so, how?

So this single member plan paid out the RMD for 2022 today but did not withhold the fed and state taxes.  The financial advisor is saying..."no harm no foul... just put on the 1099-R no withholding and the participant will be responsible for the taxes outside the plan".   He said that "the CPA will prepare some tax payment vouchers and remit the funds".  Soooo...  will there be a problem?  is this ok?

Thanks

Client has a SH match in their 401(k) plan.

1 - Could they change to a 4% SHNE for 2021? 

2 - Could they change to a 3% SHNE for 2022?

Thanks! 

If someone