FT Retire

Is there a hard rule that states plan sponsors with both a Defined Benefit and a Defined Contribution plan must be tested together if each plan passes nondiscrimination testing on its own? And if there is no hard rule, what is the exception?

Actually correction on #3. Lost earnings are based on the originally missed deferral and SHMAT amounts

Based on what I'm reading from the IRS website, missed deferral and SHMAT contributions over 2 years old have to do the following: 1. Deposit 50% of missed deferral + 100% of missed SHMAT contributions 2. Missed deferral is deposited into QNEC source, missed SHMAT is deposited into QMAC source 3. Lost earnings are based on the missed deposit going into QNEC and QMAC sources 4. Prepare 5330

Actually, just realized something. Plan can't be safe harbor match for 2022. Any safe harbor match contributions deposited into the plan should be re-characterized as standard employer match contributions for the 2022 year and since the plan only has HCEs (Owners + Children), the plan is in compliance.

Yes, the company has a monthly payroll and the 401(k) contributions did not begin until December 2022

A brand new plan for the 2022 plan year has a safe harbor match provision. The plan document states that safe harbor contributions are determined at the end of the plan year. However, there was only 1 payroll in 2022 that was in effect. Plan sponsor provided safe harbor match for that one payroll. Is the plan sponsor required to true-up the safe harbor match for the entire year and if their original intention was to fund it on a per payroll basis, can this be corrected under SCP?

Just want to get some input on the following situation: A plan has been terminated and assets have been liquidated as of 12/31/2022. I worked on the discrimination testing for the plan and it turns out the plan fails discrimination testing. I have recharacterized the affected participant's excess contributions as catch-up and it turns out the affected participant will need a refund distribution of less than $20. When the affected participant withdrew his funds, it was a cash distribution so it makes things a little easier. With that said, which are the best options: 1. Have the asset platform create an additional 1099-R to account for the excess contributions? 2. Leave it alone since the affected contributions will already be taxed since he took out a cash distribution Would like to know your thoughts on this.

Just to make sure, have there been any updates from the IRS regarding the RMD life expectancy tables? I'm well aware the RMD age increased to 73, but I'm wondering if we use the same expectancy tables as we did for 2022.

An employee stopped working for a company for a certain period of time, kept on payroll, but did not officially terminate from the company. Would you consider his termination date the day he/she stopped working for them or the date they are no longer on payroll? I'm thinking the latter, but would like to know your thoughts on this.

See the attached Case of the Week: Required Minimum Distributions and More Than 5% Owners | National Association of Plan Advisors (napa-net.org)

Very important to keep people updated about this even to this day. Some accountants/advisors still don't know the correct answer to this. There is an article from NAPA that outlines it all pretty well Case of the Week: Required Minimum Distributions and More Than 5% Owners | National Association of Plan Advisors (napa-net.org)

Unfortunately, it would not qualify as an acceptable hardship as the affected participant does not live in the area. Possibly different story if the participant lives in an RV or some sort of home on wheels assuming it's acceptable by the IRS

What type of calculations do you normally use for RMD calculations for Cash Balance and/or Defined Benefit Plans? I am aware that one option is a lump sum option in which a calculated monthly benefit from last year's valuation report * 12 months = current year RMD. Just wondering what has worked for you and if the method you use helps reduce the amount of taxes paid for the affected participant taking the RMD.

They elected to make a 2021 deferral as it was part of the original tax return, just never made

Just curious, if a partner(s) accidentally forgot to make a 401(k) contribution to the plan for 2021 via their Schedule C or K-1 income, can they still make it for 2021 even though it's no longer deductible on the business tax return for the 2021 year?

I will like to know if profit sharing and pension contributions to a plan are tax deductible or not through the state of New Jersey for a New Jersey employer. There are some confusing reports about this.