I have a client that is thinking of starting a 401k plan. 

Two brothers own 100% of Company A; 50% each. 

The parents (to both brothers) work for the brothers, receive W2 comp, own 0% of company B and want to make 401k contributions to the 401k plan of Company A.

In addition, the parents jointly own 100% of Company B; 50% each and do NOT want to offer a 401k to the employees of company B.  The two sons do not own any of company B and they do not work for Company B.

So the questions is If the parents contribute to the sons 401k plan as employees of company A and do not offer a plan to the employees of Company B is this is an issue? 

Can someone refer me to a reasonably priced TPA to do annual administration (including 5500 form) for a Solo 401K plan? I'm getting quoted prices that are for traditional 401k plans and that makes no sense. Thank you.

We are looking to sell our TPA business and wondering if anyone had a recommendation of a business broker that handles TPA firms, or know of a bulletin board that lists businesses for sale.

We have a participant who terminated service in 2020. He is 75 years old and not a 5% owner (so he didn't have to take any RMDs in the past). I understand that he did not have to take the first RMD for 2020 due to the CARES Act Waiver. However, what is the date by which he had to take the 2021 RMD. Would it be 12/31/2021 or 4/1/2022?

Thanks.

By any chance can someone point me to the language in the Relius Corbel Doc that includes the provision to recognize the service of a temp-to-hire performed under the agency?  i.e., 414(n)(4)(B).  This the provision that says if someone is under the primary direction and control of the recipient, pursuant to an agreement, but does NOT meet the "substantially full time for a year" requirement, we nonetheless need to recognize their service for eligibility and vesting.

I've scoured the document and cannot find it anywhere...  There are a lot of "incorporated by reference" but nothing about this provision.

Non-governmental 457(b) plan - participant becomes eligible in 2021 and is age 62. NRA is age 65. Since participant is within 3 years of NRA, the participant can make a catch-up contribution. 

Since there is no under-utilized amounts from prior years (given that the first year of participation is 2021), is the participant able to make catch-up contributions? Since the catch-up is the lesser of 2X the annual limit or the under-utilized amounts from prior years, what do we use as the  under-utilized amount from prior years to determine the available catch-up? 

My understanding is that the advantage of qualifying as a top hat plan is that the plan is exempt from certain ERISA requirements.

Is it possible to have a NQDC that complies with the ERISA requirements requirements but is not a qualified plan?

Has anyone ever seen one?

What are the consequences of a client signing the Post PPA document with a date of 1/4/22 and the restatement is effective 1/1/21?

Has anyone else become acquainted with a letter like the one attached?

A summary of the situation:  The plan terminated and filed a final, short-year return for 2018.  2018 was the only plan year with any plan distributions and 945 withholding to be deposited.  The IRS indicates that they are missing Forms 945 for 2016, 2017, 2019, and 2020.  (At least they have record of the 2018 form, which from my experience is not always the case, even when they are sent in properly.)

The instructions seem pretty clear that you "don't have to file Form 945 for those years in which you don't have a nonpayroll tax liability."  I would probably be laughing about this if it hadn't given my client a heart attack.  How ridiculous!!

(Edit: I don't yet know the results of the scheduled telephone call.)

Scan_2022-01-06-100720871.pdf

I have a potential client that sent over the ownership percentages below, so we're trying to determine if there is a controlled group.  Since they are adult children, is it accurate that Company 3 is the only one that wouldn't be part of a controlled group (since the son owns 50% or less of the company).  Company 4's ownership would be attributed to the parents, and therefore part of the controlled group, since the ownership gets attributed to the parents since he owns over 50% of the company.

Thanks!!

I know participant statements must get a blurb if the PS is allocated using a permitted disparity formula (integrated with SS).

What if the formula is grouping method and subject to testing?  The contribution COULD be allocated using permitted disparity.  Is that same disclosure needed on the statements in that case?

I understand that a safe harbor contribution can be made to plan other than the plan where the 401(k) salary deferral was made.  Is a money purchase plan considered an eligible plan to receive a safe harbor contribution?  I guess I am getting hung up on the pension aspect and minimum funding standard of a money purchase plan.  

Happened to walk by my old DC-2 study guide and saw those words flip by and wondered if I remembered what it meant.

Luckily yes.

Anyone got any favorite no-longer-rules they miss?  415(e) perhaps?

Employee hired 10/3/2016.  Term’d 3/1/19. Plan effective 1/1/20.   Rehired 3/29/21.  Service requirement is 1,000 in 12 months. 

Is she eligible to enter immediately upon rehire date? (i.e. allowed to defer and receive safe harbor non-elective contributions).  Plan does not apply one year hold out rule or break in service rule. 

I know that if the plan had already been in effect (and if she met the age/service requirement prior to her term date) she would be eligible to enter immediately.  The effective date of the plan is throwing me off.  (She term’d before the plan was put in place.)  Although the plan document says that all service is counted.  So I think she would be eligible immediately??

Plan being amended to change corporate trustee.  Would you do an SMM or no?

I always assumed that W-4P was used for RMDs.

I just became aware of the existence of W-4R.

W-4P is for periodic distribs from a plan and the -4R is for non-periodic payments.

Are RMDs considered periodic from DC plans?  Most of the participants' RMDs that I work with are pretty much on an ad hoc basis:  they take them at various times during the year.  I have one lady who takes quarterly payments totaling her RMD for the year, but most take just one payment at the time it suits them.

So, should we be using W-4P or -4R?

Hi

I believe the answer is no issues but always would like to confirm:

Common factors:

Company A has a 401k/PS plan

Joe and Mary are married and have no minor children at this time

Mary owns 100% Company B and has no business relationship with Company A/no affiliation

Scenario 1

Joe is an officer of Company A (no ownership but CFO and making over threshold)

Joe's wife Mary also an employee of Company A - for all purposes, a rank&file employee

Company A provides ER contributions to both - Joe is at 415(c) dollar limit

Company B - no employees other than Mary - also provides ER monies to Mary

No issues as well as combined 415(c) limits for Mary, correct?

Scenario 2

Now Joe owns 49% of Company A. Other 51% is owned by unrelated party.

Mary is still an employee but now HCE due to attribution

No issues as well as combined 415(c) limits for Mary, correct?

Scenario 3

Same as Scenario 2 except Joe now is also employed by Company B

Company B pays Joe 305k of salary and wants to provide Joe maximum PS - in addition to Mary

So, Joe can get maximum limits in both companies separately, correct?

What am I not asking here?

Thank you

A dental office consisting of two dentists and about 5-6 employees.

Currently there is one profit sharing plan and all the money is pooled.

Each dentist wants to take his portion of the pooled account and open up a new plan (not account, but plan)  as well as creating a new plan (not account, but plan) with a pooled account for the participants.

Does not make any sense to me, keep the existing plan and amend to allow for individuals to direct their own investments; but the dentists do not want to do that.

Is this discriminatory??

May a 55 year old participant  earns 200,000 (sole participant)

May his 2021 contribution be

$20,500 deferal

    6, 500 catchup

    6,000  3% safe harbor

Total  $33,000  for 2021

Is the 33,000 allowed

I am advising a TPA firm that unfortunately had an employee who helped backdate a plan amendment for a plan customer. This means that the plan client and TPA missed a plan amendment deadline but backdated the signature date to be within the deadline. This happened fairly recently. The question is how to correct this. My opinion is to reach out to the plan customer and draft a new plan amendment which rescinds the backdated plan amendment. After this is accomplished I will determine through EPCRS what additional steps need to be taken. Any thoughts on this as to whether rescinding the backdated plan amendment is the right first step here and then what additional steps need to be taken, other than using EPCRS?