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 

Hi

A record keeping company (RK) that is also the document sponsor insists on 30 day waiting period for the following amendment to be effective:

Plan has 401k+ 3% NE (non-elective) SH+PS provisions

Currently, 401k and NESH has 1 year wait and age 21 with first month following completion of eligibility as entry date. PS portion is 21/1 year with dual entry.

Plan sponsor wants to eliminate the 1 year rule (age 21 stays) for the 401k+SH portion and have immediate entry as of date of hire but does not want to change PS provisions.

Is this true that they have to wait 30 days for a more favorable eligibility?

RK insist on it so that they can change and provide an updated SH notice.

Thank you

Corporate taxpayer has been paying premiums for individual Long Term Care policies on its outside directors for over a decade, no 1099s issued.

Is there any basis for excluding these premiums from director income?

If not, is the proper reporting form a 1099-NEC?

Since “correction” of the problem will be many amended tax returns, anybody willing to venture an opinion on how many years delinquent 1099s should be filed?

Thanks

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Client wants to amend to allow in-service distributions at age 45 + 10 years of participation from reg match and ps.  The document is PPD VS 401k document, and while I could do those two options separately, I would need to use the describe line to actually get the combo of those two.  Would you have any concerns about adding this type of provision?  Other than it being a bad idea in general to take your retirement funds at age 45.

Is it a PT if father provides investment services to son's plan and receives compensation?

I think so...just checking.